Malaise continues: unemployment rate “declines” as workforce collapses
The November unemployment numbers have been released by the Bureau of Labor Statistics, and there really isn’t any news to report: it’s the same old story from Barack Obama’s “New Normal.” Anemic job creation barely kept up with population growth, but an astonishing number of people gave up looking for work entirely, causing the official unemployment rate to dip slightly. Meanwhile, full-time high-wage jobs vanished, to be replaced by “burger flipper” work, and government hiring replaced private sector job growth.
And, of course, the media tried presenting all this as good news. Notably, President Obama decided today would be a good day to avoid public appearances.
The hard numbers: the official, heavily massaged U-3 unemployment rate dropped from 7.9 percent to 7.7 percent. 146,000 jobs were created, which is far better than the apocalyptic expectations of only 77k jobs. This is the full extent of almost all media reporting on the jobs report, so everything you read from here on down is the stuff they’re not telling you.
146k new jobs is barely enough to keep up with population growth; it’s stagnancy, not “recovery.” The dip in the unemployment rate came entirely from an incredible 540,000 people abandoning the workforce completely, in a single month. That’s right: over half a million people gave up looking for work. That means they don’t “count” in the U-3 unemployment any more, so it went down. A slightly higher percentage of a much smaller workforce had jobs. The media is trying to celebrate this.
As Jim Pethokoukis of the American Enterprise Institute points out, if Barack Obama still had George Bush’s workforce, the current unemployment rate would be 10.7 percent. And if he had just managed to hang on to the workforce from one year ago, it would be 8.3 percent. The pace of job creation was actually a little slower in 2012 than in 2011. That’s how much of an effect the collapsing workforce has on these “official” unemployment numbers.
Another big factor in the alleged “drop” in the unemployment rate is that negative adjustments totaling 49k jobs were made to September and October. In other words, those months were considerably worse than we were led to believe, and retroactivley adjusting them makes November look a little better.
It might seem odd for job growth to be flat during the holiday season, which usually brings plenty of seasonal retail hires. As a matter of fact, retail hiring was pretty strong, with 53k new jobs created. Another 23k jobs were added in the “hospitality and leisure” sector. But jobs were lost from better-paying and full-time sectors, such as construction and manufacturing.
And government added 35k more jobs to its payrolls in November, bringing new government hires up to 544k since July, according to CNS News. Long-term, high-wage, private sector jobs are simply evaporating under Barack Obama’s policies, while Part-Time America blossoms. The effect is so profound that if Obama were a Republican, it would have been combined with the collapsing workforce to become the dominant media narrative of the past four years.
Another interesting point is that one reason expectations for November were so low concerned the widely accepted media narrative that Obama’s last lousy jobs report was due to Hurricane Sandy. Those effects were far less profound than anticipated.
The degree to which workforce collapse has been factored out of unemployment reporting has become completely absurd. There’s a graphic flying around the Internet that makes this point in a dramatic way:
The creation of all sorts of obscure “sub-classes” of unemployment and under-employment makes comparisons between present trends and historical data – or between the United States and other countries – extremely difficult, and hides both the true extent of the problem, and Washington’s culpability in exacerbating it. So do the lavish welfare and unemployment benefits of the new milennium. The lower extremities of the body politic have been heavily numbed up; we just don’t feel these staggering unemployment rates the way earlier generations would have. The long-term unemployed are not starving and desperate. There are no Hoovervilles. The disaffected are more likely to turn to government for comfort and subsistence, rather than angrily blaming it for creating a moribund economy through taxation and hyper-regulation.
And things are about to get a lot worse. Contrary to President Obama’s rhetoric about an economy preparing to take off (after just four years parked on the tarmac!) we’re looking at a few very bad quarters ahead. Gallup just released a poll showing that “U.S. small business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession.”
And wny not? They’ve been demonized, targeted for tax increases, and terrified by ObamaCare. The robust recovery needed after the last recession never happened, and there will be a huge price to pay as the next recession settles in. A defensive crouch of stagnant job growth, with more people falling out of the active job market, makes sense… and is absolutely the last thing America needs right now.