Unemployment Analysis

In the aftermath of the unemployment report Friday, there has been a lot of spin.  The headline rate drop of .4%, with no corresponding increase in non farm payrolls stumped a lot of people.  One person that I thought hit the nail on the head immediately was Diane Swonk on CNBC.  She said people had begun working for themselves and were not counted in the non-farm payroll number. No hesitation and everyone else missed it.  Kudos to her!  I thought that analysis was really good, and this article in the LA Times confirms it.

“The new numbers reveal that 14 million Americans are self-employed, up from the 9 million that the old data indicated worked for themselves. Many workers find themselves making their own jobs once they become frustrated with employers’ reticence to hire.”

Another article pointed out that people over 50 are having trouble finding a job, so they are turning to self employment to earn income.  It would be great if government would tailor policy to help encourage more entrepreneurship.  Virtually none of the tax laws, and certainly a lot of the other government apparatus that are in place are headwinds to starting a business.

Someday, maybe we will get it right.

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