The election year unemployment game

 

 

 

 

 

 

 

The New York Times tells us the unemployment problem is going away, and the economy is on the rebound (THANKS to BarryO):

The United States added 200,000 jobs last month, the Labor Department said Friday, a robust number that came on the heels of a flurry of heartening economic news. Consumer confidence has lifted, factories have stepped up production and small businesses are showing signs of life. The nation’s unemployment rate fell to 8.5 percent, its lowest level in nearly two years.

It was the sixth consecutive month that the economy showed a net gain of more than 100,000 jobs – not enough to restore employment to prerecession levels but enough, perhaps, to cheer President Barack Obama as he enters the election year. […]

So what’s going on here? Is all of BarryO’s spending REALLY turning the economy around?  Conn Carroll, writing in The Washington Examiner,  steers us toward what may be the real story:

The unemployment rate fell again in December, from a revised 8.7% in November to today’s 8.5%. Since September of this year, the unemployment rate has fallen half a point, from 9%, while the U.S. economy has added only 400,000 jobs. But,according to the Federal Reserve, the U.S. economy must add more than 110,000 jobs a month for the unemployment rate just to keep up with population growth. So if job growth is at a point where we should only be treading water, why is the unemployment rate falling so fast?

The answer is that more and more Americans aren’t looking for work. Our unemployment rate is not dropping due to job creation, it is dropping becauseof workforce attrition. Between December and November, 50,000 Americans dropped out of the civilian labor force. That number was even higher between October and November when 120,000 Americans stopped looking for work.

When President Obama was sworn into office, there were 154.2 million people in the United States labor force. Today there are only 153.9 million. If we had the same labor participation rate today that we did when President Obama first took office, our unemployment rate would be 10.9%.

What is driving the continued shrinkage of our labor force? Is it early retirement? Part time work? Nobody knows.

Whatever the reason, our rapidly declining labor force has been a boon to Obama politically. He can take credit for a falling unemployment without actually creating the jobs that previous administrations needed to achieve similar results. Looking ahead, he could conceivably proceed to election day with both unemployment below 8%, and fewer jobs in the U.S. economy then when he was sworn into office.

Rush had an interesting take on the latest unemployment news:

They are celebrating, even this as fraudulent as it is, this 8.5% is fraudulent.  The news is out there something like 200,000 jobs created, surging in December.  However, 42,000 of them are seasonally adjusted couriers and messengers.  In December, a category called couriers and messengers, they’re hired during the holiday season, they’re temps.  Forty-two thousand of them.  They will not be counted in January and February ’cause they’re let go.  But, look, we could nitpick here on the numbers.  That misses the point.  The point here is what we were talking about yesterday.  The truth is not what is important here; it’s what’s being reported.  I could sit here all day and tell you how these jobs numbers are not accurate.  It’s not gonna matter.  The news is Obama’s policies are working.  The news is it’s finally kicking in.  The news is the economy is growing. The news is jobs are being created.

Those of us who have the truth and the facts on our side are seen as nitpickers, just can’t get with the program, don’t want America to do well.  Every bit of this, every bit of this was entirely predicted.  So here we are at 8.5% unemployment and we’re being told we need to celebrate this.  As fraudulent as that number is, it’s party time.  The black unemployment rate’s still 16%.  The number of jobs that have been destroyed in the country is over two million.  The universe of available jobs is way down.  There’s nothing worth celebrating in this, is my point.  And yet we are being told that it’s party time, time to celebrate.  Since when do we celebrate millions of unemployed people, millions on government benefits because they can’t find jobs, and then claim this is progress or claim that this is a recovery?  This is offensive to me.  But it’s where we are today. 

[…]

There is no economic recovery taking place and yet we’re being told that there is and furthermore we’re being told to celebrate it and we’re being told that Obama has made it possible.  Fraud after fraud after fraud after fraud.  Yeah, that’s right, it wasn’t but a few short months ago the black caucus was ticked off.  The Congressional Black Caucasians, they’re all ticked off because there wasn’t significant job creation in their community, and there still isn’t.  Unemployment in the black community is still at 16%. 

Our buddy James Pethokoukis: If the same number of jobs existed in the country today as existed when Obama was inaugurated, the unemployment rate would be 10.9% today, not 8.5%. It’d be 10.9, 11%.

[…]

So 8.5% unemployment, millions of unemployed people, millions of jobs lost, millions of people on government benefits because they can’t find jobs — and this is the progress we have, this is what we have to show for trillions of dollars in deficit spending. Trillions of dollars! The unemployment rate is still higher than when Obama took office. The media is reporting, “The unemployment rate lower than it’s been in three years!” They don’t tell you lower than since Obama was inaugurated, but that’s the truth: $5 trillion in deficit later, we have an 8.5% unemployment rate. That’s it? This is what we’re supposed to party down over? And of course we have to provide the perspective here because few others will.

So we’ve got $6 trillion in new deficits. We ignore the millions who have dropped out of the workforce, we ignore all those who are holding part time rather than full-time jobs, and the best Obama can come with — the best the Democrats can come up with, the best the media can come up with — is 8.5%, and we’re supposed to celebrate today. How much have these jobs cost? Morning news reports this is a good picture. There are six million fewer jobs today than there were in 2008, folks! There are six million fewer jobs available in this country than there were three years ago. The unemployment rate is 15.2% when you include those who have dropped out and those who want full-time jobs but have to take part-time jobs. That’s the latest figure. So the Obama plan: Shrink the workforce, expand the welfare state, and then claim economic progress. [..]

The D.C.-based American Enterprise Institute also questions the official unemployment numbers:

According to official figures released by the U.S. government, unemployment rates in the country are hovering around 8.6 percent. However, the American Enterprise Institute (AEI) suggests that a better measure of the real jobless rate -the U-6 – stands at 15.6 percent.

The AEI’s rate includes those individuals who would like a job and have been looking for employment for the last twelve months and not just the last four weeks. The agency believes therefore the number of Americans hurt by the bad economy is almost twice what the official number would suggest.

According to the AEI, the official rate excludes workers who have decided to drop out of the labor market altogether, either because they are discouraged or for other reasons. This rate also ignores workers who settle for part-time work because they are unable to find a full-time job.

Aparna Mathur, an economist with the AEI, and researcher Matt Jensen, have found that currently more than 5.7 million Americans, or 43 percent of all unemployed, have been in that state for more than 27 weeks. […]

So, let’s hold off on popping those celebratory champagne corks …

2 thoughts on “The election year unemployment game

  1. I agree, and it is so interesting that now we have a viable contender against Obama, the unemployment rates is suddenly dropping. Bull, because I am one of the unemployed with a Masters degree and still cannot get work. It is politics at work, as usual. We are not stupid people, and although I always vote as part of the Democratic process, they will lie through their teeth until elected. I will not vote for Obama again, and am an independent voter, so I hope someone has better to offer than he does. Not blaming him because he has to deal with both parties that “twist” facts, figures, and whatever else they do to line their pockets and make the government machinery churn around and around with no results. In my opinion, the Presidency has become a joke, and all are made fun of on late night talk shows, SNL, and other venues. But, I will continue to vote, and feel I am doing my duty as an American.

  2. The answer is that more and more Americans aren’t looking for work. Our unemployment rate is not dropping due to job creation, it is dropping becauseof workforce attrition. Between December and November, 50,000 Americans dropped out of the civilian labor force. That number was even higher between October and November when 120,000 Americans stopped looking for work.

    I agree. As more and more American’s are dropping out of the work force, the rate will continue to decline. I suspect that folks are dropping out for a number of reasons:

    1. They really can’t find work
    2. They have found informal work and are collecting money under the table and the benefits have run out.
    3. Families are readjusting their priorities and may have found that spending less time at work is a good thing.

    But yes, we are not adding jobs. And that is bad.

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