Anytime more than 1/2 million people lose their jobs in a single month, you are looking at bad times, and that's what we saw with this morning's unemployment number (See Full Story). However, the unemployment rate is now at a "relatively" low 6.7 percent as compared to other recessionary times.
Unfortunately, the press is trying to make this number worse than need be by having headlines that state: "Worst Job Losses Since 1974" or "The Highest Loss of Jobs in 34 Years". My problem with those kind of statements is that they are misleading and they paint a more dire picture than the reality.
In 1974, the population of the United States was 213 million people. Today, it is almost 50% higher at a level of over 300 million people. The loss of 1/2 million jobs in 1974 was a bigger thing then. An equivalent loss of jobs today would have to be a loss of near 800,000 jobs to have the same impact on the economy as it did in 1974. That is why most "sane" people use percentages and not actual numbers in making comparisons over such a long period of time. For that reason it is important to also note that in December of 1974, the unemployment rate was 7.2 percent and not hardly the 6.7 percent of today (Click to See 50-year Unemployment Rates per Month).
The most disconcerting number, that is buried within this morning's job's numbers, was the fact that 370,000 people in the service sector (franchises, hospitality, news, consulting, legal, real estate, healthcare, etc) lost jobs. This means that people are not spending money on what they would consider to be non-essential services. This number notably reflects the consumer's fear about our economy. It shows that people are substantially protecting the money that they have. This economy, for decades, has grown on the backs of the service sector. As a country, we have moved away from manufacturing and have moved into services as a majority and broad-based producer of jobs. Now, that mainstay of our low unemployment numbers of recent decades, the service sector, is starting to falter, so we need to worry.
The press has a responsibility to report the facts. However, bad comparisons to 1974 are a distortion and just feeds into the fear that may have caused more job losses than need be. If unchecked, each month of reporting can spiral the job losses out of control. The fog that I am trying to cut through on this issue is the sensationalism of the news that may be contributing to the psychological impact on our economy. This is a time of 24/7 news coverage. Now, more than ever, there is a responsibility to temper reporting. The headlines have to be responsible. Even, saying that "The Unemployment Rate Rises to 6.7%" or "533,000 Lose Jobs" is more reasonable than overstating the 1974 comparison. Just my opinion.