September jobs report — no cause for cheer
US labor report Many analysts are challenging the 0.3 percentage point drop in the nation’s September unemployment rate released this morning by US Bureau of Labor Statistics. The BLS announced the unemployment rate dropped to 7.8 percent from 8.1 percent in August. The unemployment rate, which is now below 8 percent for the first time...
US labor report
Many analysts are challenging the 0.3 percentage point drop in the nation’s September unemployment rate released this morning by US Bureau of Labor Statistics. The BLS announced the unemployment rate dropped to 7.8 percent from 8.1 percent in August.
The unemployment rate, which is now below 8 percent for the first time since Obama took office, is being challenged because other key data points to a massive drop in the amount of people actually participating in the labor force.
Labor force participation has been at 30 year lows for the past two months. If participation were at the same levels as when Obama took office in January 2009, there would be 5.1 million more Americans counted as looking for work. If those people were still counted in the labor force today, the US unemployment rate would be 10.7 percent, not 7.8 percent.
The unemployment rate also contrasts sharply with another statistic that has become more relevant since the Great Recession began: the so-called U-6 unemployment number, which accounts for the underemployed and those “discouraged workers.” That rate stands at 14.7 percent and was unchanged from last month.
Committee on Ways and Means: 10 key facts on jobs and unemployment
Data Reflects September 2012 Jobs Report Released October 5, 2012
- 4.1 Million Fewer Jobs than Projected: In January 2009 the Obama Administration forecast there would be 137.6 million jobs in December 2010. Instead there were 130.3 million jobs in December 2010. Even 21 months later in September 2012, there are just 133.5 million jobs – 4.1 million fewer than the Administration’s forecast for late 2010.
- Slower Jobs Recovery than during the Great Depression: This is the only “recovery” since World War II when jobs lost in the recession had not been recovered by this point. In fact, the recent pace of job creation during the “Obama recovery” has been slower than during the Great Depression.
- Less Full Time Work: Since January 2009 the number of full-time employees has fallen by over 600,000 while part-time employment has grown by almost 1.4 million. This means part-time workers account for all of the net employment growth in the Obama years – the opposite of what Democrats predicted when they said their stimulus plan was “likely to move many workers from part-time to full-time work.”
- Manufacturing Jobs Down: Since January 2009 over 600,000 manufacturing jobs have been eliminated, the opposite of the Administration’s projected increase of 408,000 manufacturing jobs due to their trillion-dollar stimulus.
- Ten Times More New Dropouts than New Employees: During the Obama Administration, the number of people not in the labor force has grown by 8.2 million while total employment has grown by less than 800,000. This means that during the Obama years new workforce dropouts have outnumbered new employees by 10 to 1.
- Far Higher Unemployment Rate than Projected: September’s 7.8% unemployment rate remains far above the 5.5% rate the Administration predicted for this month in their January 2009 report on the projected effects of stimulus. Democrats actually predicted unemployment would fall to 7.8% in September 2009 – a full three years ago.
- Real Unemployment Is Almost 11%: If the unemployment rate included the “invisible unemployed” (discouraged workers who dropped out or never joined the workforce), the September 2012 unemployment rate would be 10.9%:
- More Unemployed Now than When Economy Was in “Free-Fall”: In September 2012 there were 12.1 million officially unemployed workers. That’s 39,000 more than when President Obama took office in January 2009 – when the Administration said “we were in economic free-fall.”
- Two Million More Long-term Unemployed: In September 2012 there were 4.8 million long-term unemployed (that is, for over six months) – over two million more than when President Obama took office in January 2009.
- Economic Misery up 80%: The “Obama Misery Index” shows that unemployment and debt have risen by a combined 80% since the start of the Obama Administration.
Illinois is no better
Compared to early 2008, before the crisis began, Illinois has lost nearly 165,000 people from its labor force. If those people, many of whom have become disgruntled and given up searching, were still included in the labor force, Illinois’ unemployment rate would be 11.3 percent, not the current 9.1 percent.
While some of the reduction in the labor force may reflect an increase in the number of retirees, the U-6 number is further evidence of the tragic job environment in Illinois. At the end of the second quarter it stood at 16.5 percent.
Worse still, the number of employed Illinoisans is down by nearly 400,000 since January of 2008. At the pace Illinois is putting on jobs, it will take years to return to pre-recession prosperity.
The current labor release today is nothing to celebrate. The numbers just don’t reflect the reality on Main Street.