The Jobs Jive Report
Team Obama and his cohorts in the liberal mainstream media are spinning the release of today’s jobs report as proof positive that the economy is flying high and headed in the right direction, a few weeks before Election Day and mere days after The One laid a goose egg in his first debate against Mitt Romney.
The BLS numbers show a dip in the unemployment rate to 7.8% with 114,000 jobs added. Appears good on the surface, which is as far as Team BO wants anybody to look. AEI’s James Pethokoukis peels back the layers to reveal the sad reality, what he calls ‘the sickly, stagnant September jobs report.’
Only in an era of depressingly diminished expectations could the September jobs report be called a good one. It really isn’t. Not at all.
1. Yes, the U-3 unemployment rate fell to 7.8%, the first time it has been below 8% since January 2009. But that’s only due to a flood of 582,000 part-time jobs. As the Labor Department noted:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
2. And take-home pay? Over the past 12 months, average hourly earnings have risen by just 1.8 percent. When you take inflation into account, wages are flat to down.
3. The broader U-6 rate — which takes into account part-time workers who want full-time work and lots of discouraged workers who’ve given up looking — stayed unchanged at 14.7%. That’s a better gauge of the true unemployment rate and state of the American labor market.
Pethokoukis also notes that the marginally lower unemployment rate is largely due to a smaller overall workforce, rather than more people actually, you know, finding jobs.
If the labor force participation rate was the same as when President Obama took office, the unemployment rate would be 10.7%. If the participation rate had just stayed steady since the start of the year, the unemployment rate would be 8.4% vs. 8.3%. Where’s the progress? Here is RDQ Economics:
Such a rapid decline in the unemployment rate would be consistent with 4%–5% real economic growth historically but much of the decline is accounted for by people dropping out of the labor force (over the last year the employment-population ratio has risen to only 58.7% from 58.4%). We believe part of the drop in the unemployment rate over the last two months is a statistical quirk (the household data show an increase in employment of 873,000 in September, which is completely implausible and likely a result of sampling volatility). Moreover, declining labor force participation over the last year (resulting in 1.1 million people disappearing from the labor force) accounts for much of the rest of the decline.
The bottom line: “The U.S. labor market remains in a deep depression with virtually no recovery since the official end of the Great Recession. But the Long Recession continues unabated.”
Check out Pethokoukis’ whole piece for more details and some eye-popping charts to lend even more context that go beyond the glimmering narrative being pushed by Team BO and the MSM.
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