Big Government Still Thwarting Job Creation
Conn Carroll /
Last Friday the Bureau of Labor and Statistics released its monthly jobs report showing that the U.S. economy shed 85,000 jobs in December, but due to the fact that 661,000 individuals left the labor force, the unemployment rate stayed at 10.0%. The Obama administration again spun the report by stressing that the rate of job loss continues to decline. But as Heritage fellow James Sherk explained last year, it is not job losses but lack of job creation that is driving our double digit unemployment rate.
Unemployment is unlikely to drop significantly until entrepreneurs increase investment in their ventures. However, surveys of business owners show that they do not plan to increase hiring or investment in the near future. But as Sherk and Heritage’s Rea Hederman note in their analysis of the latest jobs report, firms still are not ready to hire:
Chart 2 shows responses from the monthly National Federation of Independent Business (NFIB) survey of small and independent business owners. It shows that business owners have put their expansion plans on hold. Only 16 percent of businesses plan to make capital investments in the next three to six months, just half the rate before the recession. Unsurprisingly, hiring has also stalled. More small business owners now plan to cut jobs than to increase them over the next three months. (more…)