Posted on 02/06/2012 8:01:57 AM PST by SeekAndFind
The January jobs report is out and it seems pretty strong, at least superficially. The unemployment rate fell to 8.3 percent from 8.5 percent, the lowest rate since February 2009. And the economy added 243,000 jobs, the most since April 2011.
But does anyone believe an "official" unemployment rate of 8.3 percent really gives an accurate picture of the U.S. labor market? Even though the unemployment rate fell, so did the labor force participation rate (as more Americans became discouraged and gave up looking for work). Here’s what that means:
1. If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7 percent then vs. 63.7 percent today—the U-3 unemployment rate would be 11.0 percent.
2. But let’s not go all the way back to January 2009. In January 2011, the unemployment rate was 9.1 percent with a participation rate of 64.2 percent. If that were the participation rate today, the unemployment rate would be 8.9 percent, instead of 8.3 percent. As an analysis from Hamilton Place Strategies concludes, “Most of the shift of the past year is due not to the improvement in the labor market, but the continued drop in participation in the labor force.”
3. Now, to be fair, some of the decline in the participation rate is aging Baby Boomers dropping out of the labor force. But taking that into account still doesn’t get us very far, as HPS notes:
Demographic projections expect that participation rate to be at 65.3 percent. If that full participation rate is the goal, our economy is “missing” 3.8 million workers, up from the 3.4 million we noted in the white paper. The unemployment rate in that context has not budged at 10.4 percent.
4. Then there’s the broader, U-6 measure of unemployment which includes the discouraged plus part-timers who wish they had full time work. That unemployment rate is still a sky-high 15.1 percent.
5. If the participation rate does level off at its current rate, according to HPS, the economy would need to generate 231,000 jobs per month to get below 8 percent unemployment by Election Day. If the participation rate continues its downward slide, however, that number would be much lower—perhaps as low as 131,000 jobs a month (see below chart). But such a decline wouldn’t necessarily be good news.
Why is that? Because the unemployment rate would be falling because the economy remained weak with not many jobs created. That also means weak income growth, which is even more influential on presidential election results than the unemployment rate. If people don’t sense their own economic situation improving very much, it won’t matter what some distorted statistic from a government agency says about the economy. Or what Obama says, either.
One of the most accurate election forecasting models doesn’t even look at the unemployment rate. It looks at per person GDP growth, which correlates with income growth. If you plug a 2 percent GDP forecast for 2012 into the model of Yale’s Ray Fair, the algorithm predicts a close election, but still an Obama defeat with the incumbent president getting just 47.8 percent of the two-party vote.
Bottom line: The unemployment rate is dropping because economic growth continues to be so anemic that nearly 4 million Americans have quit looking for work and have been disappeared by the Labor Department. This still isn’t much of a recovery.
The “8.3%” is propaganda worthy of Goebbels. The regime must be so proud. The question is: will the sheeple fall for it, or will they beleive their own eyes?
MSM dons dlinders for the next nine months.
I’ll stick wit the U-6 for the real unemployment number.
Excellent find and post. First Article that addresses the retirement of the baby boomers in context of declining work force. I am surprised that the unemployment rate with this adjustment is 10.4%!
I think that number IS accurate, and just fine. It's the 1.2 Million leaving the work force that I don't buy. I think a good chunk of that 1.2 million that in theory left the workforce, actually are indeed working!
Then the question becomes, what job are they working at...
It could be, for example, a newly created Chicargo-like underground job. Or, it could very well be the job of getting off the couch, trunching all the way to and back from the mailbox with this months check. Alternatively, the job could be doing odds and ends, such as waiting for the EBT card to fill up, and then the job of driving around using it.
8.3%....as phony as “Obamas’ Stash.”
For me, this false reporting of the unemployment numbers makes me mentally take a next step on those stepping stones that lead to the 1776 solution.
What the press are doing in falsely reporting these numbers is thwarting the natural, non-violent political process that allows for a change in direction without resorting to revolution.
“Those who make peaceful revolution impossible will make violent revolution inevitable.” John F. Kennedy
“... will the sheeple fall for it, or will they beleive their own eyes? ...”
They’ll believe it unless they, themselves, are unemployed. The old saying: “A recession is when your neighbor loses his job, a depression is when you lose your job” rings true.
And even those that are unemployed may vote Obama because they are convinced Republicans are evil, and will cut unemployment benefits.
It’s difficult to underestimate the intelligence of the American public.
The conclusion is wrong; Obama will probably win re-election and rather handily. That fix is already in. The long term unemployed will vote for him as will the HUDites and welfare recipients. They’ll be bussed to the polling places and their votes will be double counted if necessary to insure victory.
workforce numbers
LLS
Some facts about the economy that show the real trend:
http://globaleconomicanalysis.blogspot.com/2012/02/huge-plunge-in-petroleum-and-gasoline.html
Simple to understand. If the work force is only one person and that one person has a job, then employment is 100% and unemployment is 0%. On the other hand, if the work force is 1,000 and only one person has a job, then employment is 0.1% and unemployment is 99.9%. In both cases, there were the same number of people employed.
“The conclusion is wrong; Obama will probably win re-election and rather handily. “
I don’t think so, even allowing for the built-in 3-5% fraud advantage that the Democrats traditionally generate.
Being “employed” doesn’t automatically make you smiley and happy. Many people are trapped in a underpaying job with no future and/or live where they do because they can’t reasonably sell their house. You don’t see under the waterline where the duck feet are paddling like mad.
Here is a link to the real unemployment and not the B.S. from Washington.
Just look to the right of the screen under U.S. Population. Follow it down.
It has official Unemployed 13,004,423.
Actual Unemployed 23,181,698
The U.S. work force is close to 141 million.
The real unemployment (u6) is around 21% more or less. The fluff B.S. from Washington (u4 under the old numbers/not Obama’s cooked books) is almost 11%.
See http://www.usdebtclock.org/
Look on the right side, follow it down and run the numbers.
New unemployment claims sank to a three-year low last week.
The number of Americans filing new jobless claims fell by 19,000 to 366,000 for the week ending Dec. 10, according to the Department of Labor. The figure is the lowest the country has seen since May 2008.
The number brings the four-week average of weekly unemployment applications to 387,750, a decline of 6,500 from the previous week and the lowest four-week figure since July 2008.
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