By Bob Beauprez
Tuesday, December 17, 2013
The November jobs report released last Friday by the
Labor Department seemed a breath of holiday good cheer at just the right time.
The White House (in desperate need of anything that resembled "good
news") hailed the report as evidence that "the recovery continues to
gain traction."
"Has the job market finally hit its stride?"
was the rhetorical question that CNN used to lead their coverage of the new
numbers. "Hiring continued at a solid pace in November, and the
unemployment ratefell to a five-year low…for the right reasons," CNN
cheered.
The unemployment rate came in at 7.0 percent and job
creation exceeded modest expectations with growth across most sectors. What's
not to like?
A more careful read of the Labor Department's report,
however, explains that the numbers and ratios were heavily impacted by
"the return to work of federal employees who were furloughed in October
due to the partial government shutdown."
The report also explained that, "Among the major
worker groups, the unemployment rates for adult men (6.7 percent), adult women
(6.2 percent), teenagers (20.8 percent), whites (6.2 percent), blacks (12.5
percent), and Hispanics (8.7 percent) changed little in November," the
report says.
Further, the number of long-term unemployed (27 weeks or
more) that has been particularly worrisome during the stubbornly sluggish
recovery "was essentially unchanged at 4.1 million in November" and
accounted for 37.3 percent of the total number of unemployed, according to the
Labor Department.
The Obama Recovery supposedly started in June 2009 –
fifty-three months ago – making this by far the slowest and weakest recovery in
the modern era. Like most Americans, we've been looking for that time when we
turn the corner, too.
But, before the White House and Obama's cheerleaders can
claim a legitimate victory over the recession, the economy still needs to
return to something close to "normal." Utilizing the Labor Department
data, some simple calculations demonstrate that Obama's "New Normal"
– as the Washington Central Planners like to call it – is still a far cry from
the economy that existed prior to the recession.
The following chart helps do a comparative analysis
utilizing key indicators from the Labor Department's statistics.
Three dates are used for reference:
November, 2007 – the month employment peaked prior to the
recession. Net monthly job loss continued until January 2010.
January, 2009 – Barack Obama sworn in as 44th President.
November, 2013 – the most recent Labor Department
economic report.
Most of the above data is directly from the Bureau of
Labor Statistics including the total population, civilian labor force, participation
rate, total employed, unemployed, and unemployment rate. Following is a brief
explanation of the other calculations:
The Adjusted Labor Force estimates the size of the
workforce if the economy were functioning at "normal" conditions. The
labor force population for the corresponding date is multiplied by a
participation rate of 66.53 percent. (66.53 is the average LPR from January
1990 through December 2008.)
The Labor Force Shortfall is the difference between the
Labor Department's reported size of the workforce and the Adjusted Labor Force
calculation.
The Adjusted Unemployment Rate accounts for the millions
of Americans who are unemployed and have completely left the workforce, but are
not included the Labor Department's methodology. The Labor Force Shortfall is
added to the Labor Department's total unemployed population number. That sum is
then divided into the Adjusted Labor Force.
Jobs Deficit is the difference between the stated BLS
employment total and the adjusted labor force less the unemployment level for a
well-functioning, health economy (we used the CBO's 5.4% baseline).
The adjusted calculations provide an apples-to-apples
comparison and reveal a far less flattering reality than the government's
simplistic unemployment rate that gets the vast majority of media attention.
Specifically, when the recession began in late 2007 the
economy had been humming at a robust clip. Unemployment was low and the LPR was
very near the historic average. Thus, the "jobs deficit" was minimal
(10,000).
By the time Obama took office, the LPR had declined
slightly (65.7 percent) and unemployment had soared with more than 15 million
out of work. The "jobs deficit" hole that Obama inherited was nearly
5.6 million as indicated.
But, over the last five years of minimal job creation,
millions of Americans have abandoned all hope of finding a job and the labor
force has continued to shrink. The percentage of people in the great America
workforce is the smallest since 1978 during the horrific Jimmy Carter "stagflation"
era. Additionally, nearly 11 million Americans are still on the unemployment
rolls.
Bottom-line, contrary to the happy face the White House
and media Obamaphiles put on the recent economic report, times are still pretty
tough. A more accurate unemployment rate that accounts for the frustrated
millions that have given up even trying to find work is close to 12 percent.
Further, a recovery to a normal, healthy, robust economy
is still 10.8 million jobs away – nearly twice the jobs deficit when Obama took
office almost five years ago. Instead of replacing all the jobs lost in the
recession and expanding employment – the very definition of an economic
recovery – the jobs deficit continues to grow during Obama's presidency as
millions leave the workforce and new job creation barely keeps pace with
population growth. Even if new job creation rates were to double, it would take
about 40 months to recover from the jobs deficit hole created over the last
five years.
"We've rescued our economy from catastrophe,"
Obama said in a Rose Garden ceremony announcing the end of the recession in the
summer of 2009. A year later, with the economy still struggling after his $800
Stimulus was supposed to have fixed it, the White House announced 2010 would be
"The Summer of Recovery". But, that didn't materialize either.
Three more opportunities for a Recovery Summer – or
Spring, or Fall, or Winter – have come and gone since then without anything
resembling a return to a healthy economy happening. Instead of economic
policies that instilled confidence and optimism into the market place, the
Administration accumulated deficits double and triple anything in history,
strong-armed passage of the anti-jobs, tax increasing, punitive ObamaCare
legislation, took a giant step toward nationalizing banks with Dodd-Frank, and
promulgated constricting, costly regulations by the tens of thousands of pages.
All of which were job-killing, not job creating actions.
Instead of rescuing our economy from catastrophe and
leading a recovery as he promised, the pain continues. Instead of a real
recovery, we are told this is the "New Normal" – to expect less – to
put our dreams on a diet.
The President demonizes the successful and attacks
capitalism and prosperity as evil. Taking from those who made it and giving to
those who did not – spreading the wealth, or income equality…it's the same
thing – he says is "the defining challenge of our time." He cuts a
nuclear deal with the "death to America" Iranians, and extends his
hand to Raul Castro, the most anti-American Communist in the hemisphere.
And, that's only a partial list of the "confidence
building agenda" of Barack Obama. It is a credit to the resilience of the
American people and this economy that we're not in even worse shape. It
certainly isn't because of leadership from The One.
No comments:
Post a Comment