07 Sep 2015 Unemployment News a Hollow Victory – About Those Jobs Numbers for August
When the monthly jobs report from the Obama Administration came out last Friday, there was unwarranted celebration at the White House. Any “good” news truly rings hollow – that’s what Project 21 member Derryck Green thinks.
Case in point, the labor force participation rate – the number of people who are actually working or looking for work – is stuck at a low that has not been seen since the Carter era. And it’s this unsettling factor that is likely driving down the official unemployment rate rather than robust job creation.
The stock market initially cratered in the news of the jobless report. Yet Obama celebrated.
There’s a staggering, underreported crisis affecting the American workforce, and Obama seems to be ignoring it while he twists the report into something he’s using to threaten a veto of any forthcoming budget bill from Congress daring to cut spending.
Black is white. Up is down. Day is night. Hollow victories are being treated as if they are major breakthroughs.
Trying to make some sense of it all is Derryck with his monthly “About Those Jobs Numbers” report for August’s unemployment report:
Based on a recent report from the federal Bureau of Economic Analysis, officials at the U.S. Department of Commerce determined that the second quarter of 2015 saw GDP grow at a rate of 3.7 percent. This is above the initial estimate of 2.3 percent.
It’s a hollow victory for the Obama Administration, which constantly seems to be on the lookout for alleged “good” news it can report about its stewardship of the American economy that the Preisdent promised to fix seven long years ago.
But the celebration should be tempered. When the revised GDP output from the first quarter is taken into consideration, the economy’s growth is only a measly 2.25 percent for the year.
Consider the continuing crisis of American unemployment. Private payroll processor Automatic Data Processing (ADP) estimated the private sector created 190,000 jobs in August, which is above July’s revised number of 177,000 but still below the 210,000 jobs that analysts were expecting.
According to the federal Bureau of Labor Statistics, only 173,000 jobs were created last month.
Despite this poor showing, the unemployment rate nonetheless was reported to have fallen to 5.1 percent. Based on the pallid job creation numbers, it certainly wasn’t due to expanded hiring.
One of the obvious reasons the jobless rate dropped is because people stopped looking for work and are no longer counted among the unemployed. The back-to-school season may also be responsible for the some of the unemployment rate drop.
Though economists sought out by reporters will no doubt cheer what they have perpetually regarded as an economy on the mend, this economy has allegedly been improving for six years while managing to never recover back to pre-recession levels. Other economic indicators, as they usually do, demonstrate the economy is nowhere near recovered despite the spin of the Obama Administration and its allies in the media.
While the official unemployment rate reported in the media and hailed by President Obama and his supporters was at 5.1 percent for August, it is relatively unknown to most that there’s an alternative jobless rate that is more than double that. The U-6 rate, a measure that is considered to be a better indicator of the complete employment situation because is measures those looking for work as well as those who are underemployed and have quit looking for work altogether, is a sky-high 10.3 percent. For a good portion of the Obama presidency, this U-6 rate has doubled the official rate.
This jobless rate is a hollow victory. Obama cannot legitimately claim the employment situation is getting better when one considers the devil in the details.
And, as usual, the demographic groups the President considers to be his base didn’t fare well compared to the general population. Women’s unemployment, for instance, was at 4.7 percent. That sounds good, but this rate is still worse that during the George W. Bush Administration.
In all, more than 94 million Americans were not in the workforce in August, including more than 56 million women. The civilian labor force participation rate of 62.6 percent for the third consecutive month – a 38-year low (that’s October, 1977, to be precise!).
These statistics alone make it certain that the jobless situation is much, much worse than official reports. The month Barack Obama was inaugurated, the labor force participation rate was 65.7 percent and the unemployment rate was 7.8 percent – with roughly 80.5 million people not in the workforce. Now, the number of people not in the workforce has jumped 15 million, and the labor force participation rate is 3.1 percent lower. Yet the unemployment rate is a little more than two percent lower.
It sounds like Common Core math to me.
It’s a hollow victory.
And things aren’t getting better elsewhere in the economy. For example:
- According to consultancy firm Challenger, Gray and Christmas, employers planned to cut 41,186 workers from payrolls in August. This is a 61 percent decline from the 105,696 jobs that were cut in July. Based on their data, this brings the jobs cuts for 2015 to date to 434,554.
- Data from a recent Gallup poll shows more Americans are losing confidence in the economy. According to Gallup, the U.S. Economic Confidence Index “slid three points to -17 after also declining three points the prior week. This is the lowest the index has been since September 2014, and comes as international markets struggle amid volatility in China’s stock market.”
- The U.S. manufacturing sector lost 17,000 jobs last month, the first decline in this sector since 2013. On the same low note, the nation’s service economy added more than 26,000 jobs for bartenders and waiters. So, if those who have given up hope in finding work or those who aren’t working full-time need to cry in their beers over the poor economic situation, there are enough bartenders and waiters to accompany a very large pity party.
- A study conducted by the left-leaning National Employment Law Project noted that take-home pay for American workers was either stagnant or had fallen since the so-called recovery began back in 2009. The greatest declines were among the lowest-paid workers such as those in the home health care, food preparation and retailing sectors. Jobs without great wages is certainly a hollow victory. At least that’s what the left always says, right?
- The Congressional Budget Office (CBO) says that, because of record tax revenue and plateaued spending, the federal deficit and debt were reduced to $426 billion in fiscal year 2015. This marks the lowest deficit of Obama’s reign. At the same time, however, the CBO predicts that by 2018 spending will increase while the economy slows once again, making the debt unsustainable. And Obama is threatening to veto any budget from Congress and shut down the government if lawmakers don’t increase spending.
- Wall Street didn’t react too kindly to the less-than-stellar jobs report. The Dow Jones Industrial Average fell more than 272 points – or 1.7 percent – ending the week at a loss of over three percent, according to the Wall Street Journal. This ends a particularly bad two weeks for the Dow, which dropped significantly during the past two weeks of August as a reported result of China’s weak economic outlook. Hollow.
- The national average for a price of gas is $2.42, the lowest price per gallon for a Labor Day weekend since 2004. AAA predicts the national average for gas to be at or below $2 per gallon at Christmas. OK – so there is some good news!
Despite the reported drop, the fine print shows that the August jobs numbers weren’t good news. And, while more and more Americans find themselves on the outside of the workforce looking in, President Obama seems disconnected from his duty to help manage our nation’s economic recovery. Instead, he’s busy renaming mountains and continuing to push the scam of “climate change.” He’s taking selfies (again), and lying to the world about how great his Iran deal will be (well, great for Iran; read it).
In other words, it seems Obama appears willing to ride out the remaining months of his presidency as an absent leader, taking what amounts to taxpayer-funded vacations and likely securing donations for his presidential library while his administration enacts more economy-killing regulations prolonging the financial suffering of more and more Americans.