Steve Davidson:
The U.S. Labor Department released the all-important Employment Situation Report last Thursday afternoon, just before the long Fourth of July holiday weekend.
Given the timing, the report almost went unnoticed, except by President Obama, who hastily threw together an afternoon appearance to trumpet the new numbers.
On the surface, things could not look better. 288,000 new nonfarm jobs were created in June and the unemployment rate dropped two tenths to 6.1 percent, over a one percentage point drop just since last October, now to its lowest level since September 2008.
However, things aren’t always how they appear to be.
275,000 new part-time jobs
275,000 of the 288,000 net new jobs created last month were part-time taken “for economic reasons”, according to Labor Department Report A-8.
In June, there was a net gain of just 13,000 full-time nonfarm jobs.
In his 7-minute speech, President Obama apparently celebrated the loss of 275,000 full-time jobs in favor of 275,000 part-time jobs taken for economic reasons by desperate Americans.
We’ve now seen the fastest job growth in the United States in the first half of the year since 1999 (applause)… We’ve seen the quickest drop in unemployment in 30 years… 10 million jobs created over the course of the last 52 months
-President Obama, 1776, 7/3/2014The Administration has viewed job creation through rose-colored glasses for so many years it is incapable of facing reality. Reality is that seven million jobs were permanently lost in the Great Recession, never to return. Reality is that many of the new jobs are low paying or part-time. Reality is that millions of discouraged Americans have simply dropped out of the workforce entirely.
Is the unemployment rate losing its meaning?
The unemployment rate isn’t what it used to. For proof, compare it to the last time the unemployment rate was 6.1 percent: September 2008.
September 2008 is special. It’s the last month of a booming economy. By month’s end the housing bubble burst, Lehman-Brothers filed for bankruptcy, stocks plummeted and the world’s economy teetered precariously on the brink of total financial collapse.
Important differences show up when comparing before the Great Recession to today. Those differences highlight how the unemployment rate has become less relevant.
Population growth
The first thing to pull from the A-1 population survey this month is that the working age population of the United States. It’s grown by 13.5 million since September 2008 and is 5.4 percent higher today.
Aspects of the economy that should grow should be at least 5.4 percent higher today.
But the civilian labor force has grown only 0.7 percent. If labor force growth matched population growth then there should be 7.3 million more workers in the labor force today than there are.
The vanished workers plummeted the labor force participation rate from 66 percent to 62.8 percent. The last time it was this low was March, 1978 – over 36 years ago!
The total number of Americans employed has grown by only a 0.8 percent. If the number of employed Americans matched population growth then there should be 6.8 million more Americans employed today than there are right now to match 2008′s 6.1 percent unemployment rate.
Where did all the workers go?
Labor force shrinkage
Perhaps the most revealing statistic from the A-1 population survey this month is the increase in Americans not in the labor force. That number, since September 2008, has leaped by 12.3 million, up a disturbing 13.4 percent!
Millions of workers have simply vanished from the labor force. Poof! Gone. Labor force dropouts since 2008 have made today’s unemployment rate a shadowy remnant of its former self.
When looking deeper at hours worked and wages earned (LEU0252881600), the lucky ones that still have full-time jobs are putting in longer hours for less weekly take-home pay than in September 2008, after adjusting for inflation. Women have fared far between than men in this recession.
Looking good on paper appears to be all Obama cares about anymore.
Shucks, if EVERYBODY quit looking Obama would have licked the unemployment issue altogether!
(People who quit looking are no longer counted as unemployed.)
One thing the article missed (although it’s a great article!) is how the end of unemployment payment extensions has impacted Americans getting back to work.
Question:
Who could have guessed that, as long as Obama was subsidizing not working for 99 weeks, people would hold off finding new jobs for 99 weeks?
Answer:
All us ”racists” who warned about it all along, that’s who!
The debate over extension of unemployment benefits is over and the conservatives were right.
Example:
These six months, which Obama heralds as the largest — the fastest growth in jobs since 1999, have coincided with the six months of which we have no longer extended emergency unemployment, long-term unemployment insurance. Remember at the end of last year, the furious debate the Democrats [had], the president saying if you end this, the sky is going to fall, people are going to go starving, it’s going to increase unemployment? It’s had precisely the opposite effect.
If the labor force participation is 62.8%, that means that 37.2% of those eligible for the labor force are jobless. That means less than 2/3 of Americans have jobs. (Actually it’s worse than that because the BLS figures includes those unemployed yet still registered in each state’s unemployment system, and union workers on strike as being in “the labor force”. The monthly numbers are disingenuous also, because they assume only one job per worker, and do not differentiate between full-time, part-time and temporary or seasonal jobs. Those progressives who keep claiming that these Americans don’t want to work, have never seen the sheer numbers of applicants for what few jobs an employer is trying to fill.
The unemployment rate and cost of living index have, of course, been nothing but propaganda for decades.
0Muslim’s administration has only made it more so then in the past.
The Bureau of Labor Statistics released the unemployment rate for September 2014 today: 5.9%. That’s the lowest monthly unemployment figure since July 2008.
From a CNN article dated May 23, 2012:
If my arithmetic is accurate, Mitt Romney was promising that his economic policies would accomplish what Obama’s have already done by the end of 2016.
Republicans didn’t seem to believe the number was irrelevant two years ago.
@Greg: You must not have read the article or understood what it said as usual!
What do you think I’m misunderstanding?
Romney said his economic policies could bring the unemployment rate down to 6 percent by the end of his first term. That would have been December, 2016.
Instead, we’ve had the Obama administration, and the unemployment rate has dropped to 5.9 percent as of last month.
That’s pretty straightforward. The article was linked as a source for the Mitt Romney quote.
Apparently the BLS monthly unemployment numbers are accurate and significant to republicans when they’re politically useful to them, but immediately become inaccurate and irrelevant when they aren’t. Republicans—who set the nation up for an economic train wreck when last in power—predicted total economic disaster on Obama’s watch. Instead, the U.S. economy has risen from the wreckage and continues to recover. The unemployment level has declined even more rapidly than Romney claimed it would under his own leadership.
@Greg: How about using the real numbers instead of forcing people out of the workforce who can not get a job!