Obamanomics achieves unemployment stagnation
The December unemployment numbers from the Bureau of Labor Statistics are out, and there’s not much to say. Obamanomics has achieved employment stagnation. Nothing really changed much from November. The official U-3 rate remained stuck at 7.8 percent. (Actually, it rose very slightly, and the November rate was revised upward to 7.8 percent from the originally-announced 7.7 percent.)
All the usual features of Obama unemployment reports were present: 155,000 jobs were created, but that’s barely enough to keep up with population growth. The size of the workforce declined slightly, with some workers returning while others made their exit… and unfortunately, many of the returning workers couldn’t find jobs. The true unemployment rate, the U-6 metric that includes long-term unemployed and under-employed persons, remained stuck at 14.4 percent. Hourly earnings were stagnant, growing at the same rate as inflation. Long-term unemployment remained “essentially unchanged at 4.8 million, or 39.1 percent of the jobless,” according to CNN Money.
This is all pretty grim, but in this economy, it really does qualify as “good” news. CNN Money actually described the flat hourly earnings figure as “one bright spot in the report,” which means their reporters are either utterly clueless about inflation, or they’ve completely accepted Obama’s New Normal and lowered their expectations accordingly.
The crew at ZeroHedge distrusts the BLS numbers, noting significant deviations from other sources of employment data, and asks with a conspiratorial wink, “Who else is surprised that the rate is now rising with Obama reelected, and when a lower unemployment rate means an earlier end to QE4EVA?” The latter is a reference to the monetary policy of quantitative easing, which would supposedly be terminated once unemployment reaches certain levels.
Jim Pethokoukis of the American Enterprise Institute notes that if you take the long view, the past two years paint a portrait of complete paralysis:
The increase in total nonfarm payroll employment was only a smidgen better than the average 2012 employment growth of 153,000 jobs per month. And that was exactly the same as the average monthly gain for 2011. And at that pace, the US won’t return to pre-Great Recession employment levels until after 2025, according to the Jobs Gap calculator from the Hamilton Project.
Indeed, if the labor force participation rate last month, 63.6%, were the same as in December 2011, 64.0%, the “official” or U-3 unemployment rate today would be 8.4%, only a bit better than the December 2011 rate of 8.5%.
(Emphasis in the original.) The most disturbing thing about this jobs report is the rough times ahead. A few bad quarters are in the offing, the American middle class just lost $125 billion in disposable income to higher taxes, and even the mediocre December jobs report was inflated by a surge in temporary hiring related to recovery from Super Storm Sandy. Holiday hiring is also over, but it wasn’t that great to begin with, so the effect isn’t too steep. And while apprehension about the “fiscal cliff” crisis may have alleviated, one of its important factors – the automatic “sequestration” spending cuts from the Budget Control Act of 2011 – remains in play, while the debt ceiling once again looms. Actually, looking at the job numbers for the past two quarters, it’s hard to discern any significant effect from fiscal-cliff jitters; it was all just the usual gloom and malaise.
Watching the media desperately try to spin the December jobs report as modestly good news for President Obama is amazing. If we were entering the second term of a Republican president with these numbers, the networks would all be running black-and-white footage of Depression-era bread lines, and asking why the President refused to admit that his plans for addressing unemployment had been failing for years.