Somewhat unsurprisingly given the intense polarization that exists today, the announcement of the drop in November’s unemployment rate has become a political issue, as both sides of political leadership claim it supports their position in the ongoing fiscal cliff negotiations.
The Bureau of Labor Statistics announced that during November, the unemployment rate fell to 7.7% from 7.9%. The labor force added 146,000 new jobs last month, but the number of unemployed individuals remained at 12 million.
The BLS stops counting individuals as unemployed after 27 consecutive weeks of joblessness. Essentially, this means the unemployment rate fell because the labor force shrunk.
Democratic Senate Majority Leader, Harry Reid, who has been vocal about the need to increase taxes on the wealthiest Americans, stated the number proves the economy is improving, but a tax hike on middle class families could reverse the progress.
“There is no doubt our economy is moving in the right direction. The only question is whether Republicans will jeopardize the progress made so far by forcing a $2,200 tax hike on middle class families,” said Reid in a statement released on Friday.
But Republican Speaker of the House John Boehner believes the economic recovery promised by Democrats is progressing too slowly.
“Any job creation is welcome news, but the jobless rate in this country is still unacceptable. Today marks the 34th consecutive month of unemployment above eight percent,” said Boehner last Friday.
January 1, the so-called fiscal cliff, marks the expiration of the Bush tax cuts. This will trigger a return to the higher income tax rate of the Clinton era. On the same day, automatic spending cuts will also go into affect.
Democrats, led by Reid and President Obama, want to extend the cuts for families making under $250,000, but let them expire for people making above that rate.
Republicans are seeking to extend the tax cuts for all Americans.