Sunday, February 5, 2012

Unemployment Down! Really?

The unemployment figure for January was released this weekend by the Bureau of Labor Statistics. It shows that the unemployment rate has dropped to a new low of 8.3%, with new jobs at about 243,000. President Obama is far from his promised goal, but he is taking bows for a “slow but sure recovery.” Should he really be crowing about this weak recovery? And is it really even a recovery?

First of all, the official figures take little or no account of those who have exhausted their unemployment benefits and have just given up. Even those who have continued to try, hard, to find jobs, but simply got worn out by the efforts and decided to wait awhile before trying again are not in the figures. The report specifically says that “2.8 million persons were marginally attached to the labor force, unchanged from a year earlier. These individuals were not in the labor force, wanted and were available work, and had looked for a job some time in the prior twelve months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey (emphasis added)."

That’s 2,557,000 more people than the claimed job increase, but they don’t count because they don’t have jobs but aren’t unemployed. Only a giant bureaucracy could make that distinction without a difference. I can just picture Joe Schmidlap saying to himself, “It’s time to party. I don’t have a job. I’ve been out of work for two years. There are no jobs available for me. My unemployment benefits have run out. My savings are gone. We’re about to get kicked out of our home, and my wife and kids literally don’t know where we’re going to get our next meal. But thank God, I’m no longer unemployed.”

Now let’s work with that 2,800,000 number a little. Part of the non-farm job “increase” is based on “seasonal adjustments” and “estimates of the expected number of people still unable to find work.” First, the seasonal adjustments are routine, but they don’t take into account that seasonal hiring was itself weak, and this recession has gone on long enough that traditional seasonal adjustments are essentially meaningless. So let’s look at the “expectations.”

If the government office estimated that the number of longterm jobless (we can’t say “unemployed”) would be 3,043,000, but is in fact only the claimed 2,800,000, then the adjusted expectation figure is 243,000 less. By governmental and mystical “expectation-adjustment,” that’s 243,000 jobs created. Now you know why the Obama administration is so adept at using the phrase “created or saved.” When you can’t come up with a real number created, call it saved, and ignore the entire 2,800,000 who have no jobs but aren’t unemployed. In fairness, that's not the only way the government reached that 243,000 figure, but you see how the calculations work. Has your brain frozen yet?

Skipping the phony distinction between “unemployed” and “jobless,” adding the 2,800,000 back into the figures, along with those who were experiencing unemployment even before the big crash, the true unemployment figure is actually somewhere between 16% and 20% of the available work force. If for the sake of argument, the true percentage in January dropped from, say, 18% to 17.5%, that is still totally unacceptable in a great nation like America. And at that rate, it would take decades to get back to a normal unemployment rate.

That is being generous. Take out the seasonal adjustments and “expectations” and it’s hard to believe that even the 243,000 jobs increase is real. At best, the percentage probably remained static, and there might actually have been a significant decrease in employment. What provable net increases there were occurred in the private sector, with the biggest increases in professional and business services, leisure and hospitality (surprisingly), and to a smaller extent, manufacturing.

The government jobs which were supposed to be cut weren’t, so public employment did not change significantly. There are two reasons for that. First, the Prevaricator-in-Chief doesn't want to lose the crucial support of public employees and their unions. Second, a sensible cut in public employment would still be a huge number, thus increasing the unemployment rate substantially.

The biggest losses were in farm employment, with California leading the way. And once again, the old adage is proven to be true: “Figures don’t lie, but liars sure can figure.” Regardless of whether you believe the figures or not, the dismal 8.3% unemployment rate is nothing for Obama to crow about. Americans should find it unacceptable that Obama’s true message is “it could have been worse.”


T-Rav said...

According to Rasmussen, Obama's approval rating among uncommitted voters is currently at....20 percent. So perhaps they are finding it unacceptable.

I also remember reading that Allen West publicly called the Administration out on the numbers, asking how it was that the black population's employment increase could continually be three times that of the overall rate. I don't know for sure about that, but--let's face it, does anyone expect Obama not to manipulate the numbers to suit him?

(Okay, time now for Super Bowl prep.)

AndrewPrice said...

You must be wrong, the MSM is giddy about the great economy. How can that be?

Tennessee Jed said...

I think what is important is that Republicans, specifically the candidates need to pound on this just as you have, Hawk. Rush and others will point this out, but for the average marginally informed number, some will fall for the trick. It is harder for the mainstreams to ignore pressers from Romney, Gingrich, Paul, and Santorum.

B.O.'s people have a philosophy of respond to everything (the opposite of Bush Administration) who just ignored it to their detriment. One can argue that B.O. went too far the other way, and has a bit of the boy crying "wolf," but there should be a sweet spot somewhere in between.

Unknown said...

T-Rav: We need a whole lot more Allen Wests. He outright called it a scam. "The numbers have been cooked." And he also saw the racial jury-rigging going on in the figures. "Is this dramatic supposed decrease in black unemployment a result of job creation or is someone playing around with the census numbers?"

Unknown said...

Andrew: It's a simple formula. As long as they keeping kissing The One's backside, they don't have to worry about unemployment.

Unknown said...

Tennessee: So far, I think the candidates have addressed the issue well. They've managed to avoid sounding like they're hoping for Obama to fail on unemployment, but they're making it clear that 8.3% is totally unacceptable. In 36 months, including two years of a Democratic Congressional majority, the know-nothing president has never gotten unemployment down to the worst figure he predicted at the beginning of his term--8%.

CrisD said...

Thanks for addressing this issue which is particularly painful to us in this house. We believe business' need to have a more certain outlook and they do not need Obamacare!
My guess is that the Democratic operatives will have a field day with this slight downtick in unemplyment statistics but most people know the truth. They know how many mature workers and recent grads are out of work or underemployed. Additionally, everyone knows about people having to sell their houses and what they can get for them and how few people can get the loans anymore or afford the listed price.

It's amazing that yours will one of the few articles telling the truth b/c if it were a Republican way! They would be explaining the misery index etc etc etc

Unknown said...

CrisD: I truly hope your situation clears up soon. I know it will if we get rid of Obama and the Democratic Senate. They savaged Reagan over his unemployment numbers at this point in his first term. The difference is that Reagan said "stay with me, and we will beat this problem." The people believed him, and the economy turned around. Nobody with any sense and understanding of economics can believe the pathological liar in today's White House.

Individualist said...


I think we might want to be careful with our criticism here.

I have a sneaky feeling that if this tactic of calling a jobless individual as not unemplyed does not work that the One's next option would be to let starvation take its course.

Unknown said...

Indi: Thanks for the cautionary warning. Just like Josef Stalin, Obama might let people starve, then the New York Times will dig up Walter Duranty to write paeans of praise to The One for taking such good care of his people.

Notawonk said...

as soon as the fake-out numbers were released, the internets was a'blaze with a virtual: YOU LIE!

now to translate that to the vote.

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