From Hyderabad, India: The most interesting of the three pieces of statistics released by the US government on the economy – unemployment rate, inflation and gross domestic product (GDP) growth is the November 2011 unemployment number at 8.6 per cent. It is lower by 0.4 per cent from October.
The nonfarm Establishment Survey, the focus of most economic analyses, does not explain the employment gains.
The unemployment rate comes from the Household Survey which includes agricultural employment. Nonfarm payrolls, however, have only added 120,000 jobs amounting to less than 0.1 per cent of the job growth reported by the Bureau of Labor Statistics (BLS). The jobs added appear to be mostly low wage service jobs.
The remaining more than 0.3 per cent of job gains or about 474,000 jobs came from increase in agricultural production as reflected in particular by the trade surplus in food since 2010 which may have been aided by the Federal Reserve’s Term Asset -Backed Lending Facility (TALF).
Headline inflation appears to have declined because of a slower than expected nonfarm growth rate of the US and global economies even as food production rose, but not quite, to meet the rising demand leading to higher food prices.
Governments around the world may focus in 2012 on meeting higher food demand through the agricultural sector, to prevent a recurrence of potentially destabilizing food price inflation seen in 2007-2008, where most jobs could be created, offsetting energy demand by depressing industrial output to control wages, prices and inflation. The Obama administration would be better off electorally if it can replace at least 3 million lost jobs before the US general election in November 2012.