Commentary Magazine


Topic: economy

The Jobs Numbers

The Obama “recovery” continues in the latest jobs report. The economy added 169,000 jobs last month, but jobs for June and July were revised downwards by 72,000. The unemployment rate fell by a notch to 7.3 percent. But that was only because 310,000 people left the labor force. The participation rate (the percentage of working-age people in the labor force) dropped to 63.2 percent, the lowest since August of 1978.

Underemployment, people with part-time jobs who want full-time ones, continues to be a major problem, with 40 percent of part-time workers unable to find full-time employment.

Read More

The Obama “recovery” continues in the latest jobs report. The economy added 169,000 jobs last month, but jobs for June and July were revised downwards by 72,000. The unemployment rate fell by a notch to 7.3 percent. But that was only because 310,000 people left the labor force. The participation rate (the percentage of working-age people in the labor force) dropped to 63.2 percent, the lowest since August of 1978.

Underemployment, people with part-time jobs who want full-time ones, continues to be a major problem, with 40 percent of part-time workers unable to find full-time employment.

And most of the jobs created so far this year (848,000—a dismal number in itself) have been part-time jobs. The percentage of those jobs that were part-time was either 96 percent, 63 percent, or 59 percent, depending on how you interpret the Bureau of Labor Statistics data. If you would like to induce a headache, you can follow the arguments among professional economists for which number is correct here. But, regardless, even the lowest number, 59 percent, is dreadful. Prosperity is not built on part-time jobs.

How many of these part-time jobs are due to current economic conditions and how many are due to the impending implementation of Obamacare is anyone’s guess.

Read Less

Wanted: A Republican Governing Agenda

The New York Times reports on a study issued yesterday by two former Census Bureau officials. The study shows that although median annual household income rose to $52,100 in June, from its recent low of $50,700 in August 2011, it remained $2,400 lower—a 4.4 percent decline—than in June 2009, when the recession ended.

According to the Times:

Since the end of the recession … household income has declined for all but a few population groups. Some of the largest percentage declines occurred for groups whose income was already well below the median, like African-Americans, Southerners, people who did not attend college, and households headed by people under age 25.

“Groups with low incomes tended to have steeper declines in income,” said Gordon W. Green Jr., who wrote the report with John F. Coder, a colleague at Sentier Research, which specializes in analyzing household economic data.

Households headed by people ages 65 to 74 were the only group in the study that experienced a statistically significant increase in post-recession income, helped perhaps by the decision of some older workers to remain in the work force or re-enter it.

There are several things to make of these findings, the first of which is that we’ve seen a decline in median income in the aftermath of a recession. During a recovery. That’s a fairly remarkable (and discouraging) development.

Read More

The New York Times reports on a study issued yesterday by two former Census Bureau officials. The study shows that although median annual household income rose to $52,100 in June, from its recent low of $50,700 in August 2011, it remained $2,400 lower—a 4.4 percent decline—than in June 2009, when the recession ended.

According to the Times:

Since the end of the recession … household income has declined for all but a few population groups. Some of the largest percentage declines occurred for groups whose income was already well below the median, like African-Americans, Southerners, people who did not attend college, and households headed by people under age 25.

“Groups with low incomes tended to have steeper declines in income,” said Gordon W. Green Jr., who wrote the report with John F. Coder, a colleague at Sentier Research, which specializes in analyzing household economic data.

Households headed by people ages 65 to 74 were the only group in the study that experienced a statistically significant increase in post-recession income, helped perhaps by the decision of some older workers to remain in the work force or re-enter it.

There are several things to make of these findings, the first of which is that we’ve seen a decline in median income in the aftermath of a recession. During a recovery. That’s a fairly remarkable (and discouraging) development.

As for President Obama’s response to all this, a recent editorial by the Wall Street Journal gets it quite right: “For four and a half years, Mr. Obama has focused his policies on reducing inequality rather than increasing growth. The predictable result has been more inequality and less growth… The core problem has been Mr. Obama’s focus on spreading the wealth rather than creating it.”

Mr. Obama, then, is not only not up to confronting the problems of this era; he is exacerbating them. But even those of us who are critics of the president should admit that the problems afflicting the American economy–including (but not exclusive to) wage stagnation among the middle class, less social mobility among the lower class, and increased inequality–predate the Obama presidency. They are complex and defy simplistic partisan explanations.

Depending on which trend we’re talking about, they are rooted in deep cultural shifts (including a weakening marriage culture), globalization and advances in technology (which have moved us toward an economy that favors skilled over unskilled labor), a decline in workforce participation rates, rising health care costs, educational mediocrity (and downright awful education for the underclass), the structure of our entitlement programs (our transfer payments are increasingly regressive and benefit households headed by older adults, who tend to be wealthier than young adults), a byzantine tax code, and slow growth (the post-2008 recession growth rate has been roughly 2 percent).

In the face of America’s deep cultural and structural problems, assembling an agenda–including a comprehensive social-capital agenda that equips Americans, especially poor Americans, with the skills, values and habits that will allow them to succeed in a modern, free society–is a hugely complicated task. It will require a thoroughgoing reform agenda focused on entitlements, education, immigration, our financial system, and our tax code. A lot of good work is being done by policy experts and public intellectuals, by governors, and some members of Congress. (At a later date I’ll lay out what I think would constitute the broad outlines of an agenda, but for starters it might be worth reading thisthis, and this.)

For the most part, however, Republicans and conservatives sound out of touch, their solutions stale, as if they fail to take into account new circumstances. And it is no wonder that Republican policies seem stale; they are very nearly identical to those offered up by the party more than 30 years ago. I’ve argued before that “For Republicans to design an agenda that applies to the conditions of 1980 is as if Ronald Reagan designed his agenda for conditions that existed in the Truman years.” It doesn’t help, of course, that prominent Republicans occupy their time pursuing tactics that are unworkable and qualify as primal screams (e.g., threatening to shut down the government unless the Affordable Care Act is defunded).

The public is in the process of concluding that President Obama and the Democratic Party, the embodiments of reactionary liberalism, are intellectually bankrupt. They are overmatched by events. This affords an opening for Republicans to put forward a positive governing vision. The elements of a conservative reform agenda certainly exist. But for the GOP to win over new hearts and minds will require the party to embrace that agenda more fully than it has; to overcome some old (bad) habits, to put a new frame on events, and to convince the public that they are the party of modernization, reform, and renewal.

It still has some distance to go. 

Read Less

The Jobs Report

The July jobs report came in from the Bureau of Labor Statistics this morning. There were 162,000 jobs created last month and the unemployment rate fell from 7.6 to 7.4 percent. That’s the lowest unemployment rate since December 2008, the month before Barack Obama became president. That will, undoubtedly, be tomorrow’s headline in the Obama media.

But the civilian participation rate and the employment-population ratio both went down and lag behind where they were a year ago. Unemployment among groups such as blacks (12.5 percent) and teenagers (20.3) remains dismal. The unemployment rate among black teenagers is a horrendous 41.6 percent. In other words, more than two in every five teenage blacks who want a job can’t find one.

Read More

The July jobs report came in from the Bureau of Labor Statistics this morning. There were 162,000 jobs created last month and the unemployment rate fell from 7.6 to 7.4 percent. That’s the lowest unemployment rate since December 2008, the month before Barack Obama became president. That will, undoubtedly, be tomorrow’s headline in the Obama media.

But the civilian participation rate and the employment-population ratio both went down and lag behind where they were a year ago. Unemployment among groups such as blacks (12.5 percent) and teenagers (20.3) remains dismal. The unemployment rate among black teenagers is a horrendous 41.6 percent. In other words, more than two in every five teenage blacks who want a job can’t find one.

People working part-time who would rather be working full-time has shrunk in the last year by a grand total of 3,000 people, from 8,104,000 to 8,101,000. This is probably an effect of the mandate in ObamaCare to insure full-time workers if they number over 50, but part-time workers working less than 30 hours a week don’t count.

In the three years and nine months after unemployment hit its peak in the 1981-82 recession, in December 1982, unemployment shrank by 35 percent. Since unemployment peaked in June 2009, it has shrunk by only 26 percent, and if you take the number of people working part-time who would rather be working full-time, it’s much worse than that.

All in all, the Obama nonrecovery proceeds apace.

Read Less

The President’s Economic Speech

White House advisor Dan Pfeiffer billed the president’s speech today at Knox College in Galesburg, Illinois, as a big deal. As he said on the White House website, “I just finished reading the draft of a speech the President plans to deliver on Wednesday, and I want to explain why it’s one worth checking out.”

Well, it didn’t amount to much. To be sure, it is the first of a series of speeches (he’ll be giving another one later today in Missouri) that will deal with the economy, but it contained no new proposals and lot of the same old the-rich-aren’t-paying-their-fair-share rhetoric.

Read More

White House advisor Dan Pfeiffer billed the president’s speech today at Knox College in Galesburg, Illinois, as a big deal. As he said on the White House website, “I just finished reading the draft of a speech the President plans to deliver on Wednesday, and I want to explain why it’s one worth checking out.”

Well, it didn’t amount to much. To be sure, it is the first of a series of speeches (he’ll be giving another one later today in Missouri) that will deal with the economy, but it contained no new proposals and lot of the same old the-rich-aren’t-paying-their-fair-share rhetoric.

As always, it’s everyone’s fault but his. “We’ve seen a sizable group of Republican lawmakers suggest they wouldn’t vote to pay the very bills that Congress rang up–a fiasco that harmed a fragile recovery in 2011, and one we can’t afford to repeat.  Then, rather than reduce our deficits with a scalpel–by cutting programs we don’t need, fixing ones we do, and making government more efficient–this same group has insisted on leaving in place a meat cleaver called the sequester that has cost jobs, harmed growth, hurt our military, and gutted investments in American education and scientific and medical research that we need to make this country a magnet for good jobs.”

The sequester, of course, was an idea that came out of the White House and it was the White House that refused to turn it into a “scalpel,” expecting public pressure to force the Republicans’ hands. That proved a political miscalculation.

The next few speeches might have more substance and perhaps—dare we hope?—some new ideas. But I wouldn’t bet on it.

Read Less

ObamaCare and Unintended Consequences

The Patient Protection and Affordable Care Act, also known as ObamaCare, should be the feather in the cap of the Obama administration. Instead, two years after its passage, the Obama administration is begging professional sports leagues like the NFL and MLB to help promote a signature feature of the law: exchanges. The Health and Human Services Department is leading the outreach to the leagues in an effort to spread the word about how fans could sign up. The Washington Post explains why the demographic is so desirable for HHS: 

A partnership with well-known athletes and sports teams could provide a significant boost as officials ramp up efforts to encourage enrollment among a demographic crucial to the success of the health law — healthy young males.

Millions of people with health problems are expected to jump at the chance to sign up for coverage that will begin Jan. 1; insurers will no longer be allowed to reject them. To offset the cost of those potentially costly customers, officials say, millions of young and healthy people need to enroll in health plans.

Are young people really this gullible? Will they really sign up in droves to pay for the healthcare coverage of their fellow Americans with their own meager paychecks, already stretched thin by student loans and households disproportionately affected by the recession? The Wall Street Journal explains just how losing a proposition buying into healthcare exchanges would be for the average healthy young American:

Read More

The Patient Protection and Affordable Care Act, also known as ObamaCare, should be the feather in the cap of the Obama administration. Instead, two years after its passage, the Obama administration is begging professional sports leagues like the NFL and MLB to help promote a signature feature of the law: exchanges. The Health and Human Services Department is leading the outreach to the leagues in an effort to spread the word about how fans could sign up. The Washington Post explains why the demographic is so desirable for HHS: 

A partnership with well-known athletes and sports teams could provide a significant boost as officials ramp up efforts to encourage enrollment among a demographic crucial to the success of the health law — healthy young males.

Millions of people with health problems are expected to jump at the chance to sign up for coverage that will begin Jan. 1; insurers will no longer be allowed to reject them. To offset the cost of those potentially costly customers, officials say, millions of young and healthy people need to enroll in health plans.

Are young people really this gullible? Will they really sign up in droves to pay for the healthcare coverage of their fellow Americans with their own meager paychecks, already stretched thin by student loans and households disproportionately affected by the recession? The Wall Street Journal explains just how losing a proposition buying into healthcare exchanges would be for the average healthy young American:

Mr. Alito pointed out that young, healthy adults today spend an average of $854 a year on health care. ObamaCare would require them to buy insurance policies expected to cost roughly $5,800. The law, then, isn’t just asking them to pay for “the services that they are going to consume,” he continued. “The mandate is forcing these people to provide a huge subsidy to the insurance companies . . . to subsidize services that will be received by somebody else.”

Since he puts it that way, why would they sign up for ObamaCare, especially since the alleged penalties will be negligible and likely unenforced?

National Review’s Jonah Goldberg explained why, as a demographic, young people were among the most obligated to follow through with the promise of ObamaCare: 

In two consecutive elections, you’ve carried Barack Obama to victory. When he said, “We are the ones we’ve been waiting for,” he basically meant you. You voted for Obama by a margin of 66 percent to 32 percent in 2008, and, despite a horrendous economy for people your age, by nearly that much again in 2012.  

Whenever curmudgeons like yours truly suggested that young people were getting caught up in a fad or that Obama was simply buying votes at the expense of taxpayers, you’d have a fit. You’d insist that millennials are not only informed, but eager to make sacrifices for the greater good.

Well, here’s your chance to prove it: Fork over whatever it costs to buy the best health insurance you can under Obamacare.

Given the average American’s cognitive dissonance when it comes to voting and politicians, it’s unlikely that any young Americans will make the connection between their voting behavior and their subsequent responsibility to their fellow Americans who, by growing margins, find themselves supporting a repeal of the law. Unfortunately for Obama, even with the positive publicity paid for by your tax dollars, it’s unlikely that the bill will become anything but less popular as more provisions slowly come into effect. Already Americans are increasingly worried that the quality of care that their families receive will be negatively impacted by the legislation. Soon, they can start adding another worry about the law and its impact on their family: shorter work hours as another provision of ObamaCare comes into effect. A local paper in Toledo, Ohio describes the impact for an ordinary Ohioan: 

We talked to the owner of the restaurant Shane Beukre.  He said any business with 50 or more employees will have to offer insurance to workers with 30 or more hours a week.  If he does not do that, he gets fined $2,000 per employee. 

Beukre told us he’s cutting some people down to under 30 hours to help with costs to his business and the workers. 

As it is explained in the new law, under ObamaCare, everyone must have insurance.  So, the next step for workers is to get a plan through expanded Medicaid or through state or federal exchanges that will give them options on plans.  If a plan is not offered through their employer, workers could get a subsidy to help with insurance costs. 

It might be cheaper for individual people to have hours cut and pay less for insurance, but [employee Jeff] Vernon said he’ll lose more than $400 a month with fewer hours and paying for health insurance.

“That leaves me $27.50 for two weeks to live off of,” said Vernon.

The story was the same in Indiana, with local congressmen explaining why they planned to support a bill that would raise the threshold for what constitutes a full-time employee from 30-hours to 40. Indiana Congressman Larry Bucshon told a local paper:

“It’s a big problem,” Bucshon said. “I think ultimately you’ll see members of Congress like myself try to address things like the 30- hour definition of a work week.”

He believes it will be a bipartisan effort. “People recognize this is an impending storm,” Bucshon said.

Unless it’s addressed, “We’ll become a nation of part-time employees,” the congressman said. There are many other issues associated with the Affordable Care Act that need to be addressed.

Even long after the bill was passed, we’re still finding out “what is in it” (in the words of Nancy Pelosi). Congress doesn’t have the time to write, debate and pass a bill for every unintended consequence that befalls Americans due to the original 2,700 page law. The mess that is ObamaCare cannot be undone by piecemeal legislation like what Congressman Bucshon has proposed. The only solution is total repeal and a return to the drawing board, before the most damaging effects of ObamaCare become real for struggling Americans.

Read Less

The Right Climate to Torpedo the Economy?

You might think that with a historically weak recovery and, as John Steele Gordon wrote this morning, worries about the Federal Reserve’s actions affecting the stock market, this is a time when President Obama would be focusing like a laser beam on the economy. But you’d be wrong about that. As Ross Douthat noted yesterday in the New York Times, the administration’s second term priorities are at odds with those of the public. Instead of dealing with health care costs and entitlement reform (the issues most Americans consider the highest priorities), the president spent the start of his term hyperventilating about gun control. After switching to immigration reform for a while (something that I think is worth doing but is certainly not as important as cleaning up the mess that ObamaCare is about to create or reforming entitlements), tomorrow he will perform another pivot and unveil a major plan to lessen the effects of climate change in a speech at Georgetown University.

As he said over the weekend in a video released by the White House, it will include far-reaching measures that will introduce new limits on carbon dioxide emissions from power plants among other unspecified ideas that will largely be put into force by executive order rather than legislation. In one fell swoop, Obama will not only gratify his liberal base by pandering to their obsessions, he will also undertake a vast expansion of executive power in which the executive branch will assume near dictatorial proportions under the rubric of regulation. Whatever one may think about the science behind this plan—and there is very little sign that the president is operating on anything but on the basis of his ideological biases—there is no question that any plan that will hamper power production on this scale will have a deleterious impact on the chances that the country can sustain its economic recovery by raising the costs of energy and killing jobs. That he will do so in a manner that ought to set off alarm bells about the separation of powers and will generate a blizzard of lawsuits that could tie up his plan for years only illustrates the poor judgment being exhibited by the president.

Read More

You might think that with a historically weak recovery and, as John Steele Gordon wrote this morning, worries about the Federal Reserve’s actions affecting the stock market, this is a time when President Obama would be focusing like a laser beam on the economy. But you’d be wrong about that. As Ross Douthat noted yesterday in the New York Times, the administration’s second term priorities are at odds with those of the public. Instead of dealing with health care costs and entitlement reform (the issues most Americans consider the highest priorities), the president spent the start of his term hyperventilating about gun control. After switching to immigration reform for a while (something that I think is worth doing but is certainly not as important as cleaning up the mess that ObamaCare is about to create or reforming entitlements), tomorrow he will perform another pivot and unveil a major plan to lessen the effects of climate change in a speech at Georgetown University.

As he said over the weekend in a video released by the White House, it will include far-reaching measures that will introduce new limits on carbon dioxide emissions from power plants among other unspecified ideas that will largely be put into force by executive order rather than legislation. In one fell swoop, Obama will not only gratify his liberal base by pandering to their obsessions, he will also undertake a vast expansion of executive power in which the executive branch will assume near dictatorial proportions under the rubric of regulation. Whatever one may think about the science behind this plan—and there is very little sign that the president is operating on anything but on the basis of his ideological biases—there is no question that any plan that will hamper power production on this scale will have a deleterious impact on the chances that the country can sustain its economic recovery by raising the costs of energy and killing jobs. That he will do so in a manner that ought to set off alarm bells about the separation of powers and will generate a blizzard of lawsuits that could tie up his plan for years only illustrates the poor judgment being exhibited by the president.

Obama signaled that he would prioritize his beliefs about the climate in his second inaugural speech, so no one should be surprised by his decision to gamble his dwindling supply of political capital on an issue that is liable to hurt rather than help the economy. The president will, of course, argue that his green plan is good for the economy in the long run and tout his belief that more regulations will help transform the country and create jobs in industries that provide alternatives to the burning of fossil fuels. But the country has already been down this road in the first term as Obama’s stimulus boondoggle provided cash for Solyndra and other “green” corporations that proved to be cash cows for the president’s major contributors but a disaster to the taxpayers that were fleeced to bolster companies that couldn’t stand on their own.

The administration’s defense of this decision to bypass Congress will be to claim that the legislative branch has failed to act. But there is a reason why both Republicans and Democrats have been reluctant to implement the sort of Christmas tree of regulations that will be presented tomorrow: it is likely to hurt an already skittish economy. The high-minded gloss of idealism and gloom and doom predictions about our future that fuel the president’s climate push will be used by liberals to dismiss objections about the impact on the economy of this project. But Obama and his cheerleaders in the liberal media—who have been urging him to usurp power in this manner to further the global warming agenda for years—the danger that adding on new layers of federal regulations to an industry already sinking under the weight of government rules is real.

It should also be noted that given the anger on Capitol Hill and among the electorate about a trio of scandals that center on abuse of government power, the notion that the president would seek to govern on his own in this manner is curious. One would think the administration would be wary of feeding suspicions about extra-constitutional usurpation of power right now. But, like worries about the economy, concerns about the Constitution are always going to run second to ideology in the Obama White House.

Read Less

The Fed Hints

One major part of the job of the Federal Reserve is to keep the economy on an even keel, not booming too much nor going into recession. (The other major parts are to protect the banking system, and to prevent inflation.) So when the Great Recession hit in 2008, the Fed dropped the Fed Funds rate to near zero, which has the effect of lowering interest rates generally, hopefully stimulating the economy. It also began flooding the street with money through open-market operations, buying federal bonds, thus increasing the cash balances of banks, giving them more money to lend.

That’s the easy part of keeping the economy on an even keel. The tricky bit is when and how abruptly to reverse course. The balance sheet of the Fed has grown enormously in the last few years and at some point the money it has created has to be withdrawn from the economy, again by open-market operations, this time selling federal bonds. If that weren’t done, it’s possible a 1970s inflation could break out. But there is always strong political pressure to keep money cheap.

Read More

One major part of the job of the Federal Reserve is to keep the economy on an even keel, not booming too much nor going into recession. (The other major parts are to protect the banking system, and to prevent inflation.) So when the Great Recession hit in 2008, the Fed dropped the Fed Funds rate to near zero, which has the effect of lowering interest rates generally, hopefully stimulating the economy. It also began flooding the street with money through open-market operations, buying federal bonds, thus increasing the cash balances of banks, giving them more money to lend.

That’s the easy part of keeping the economy on an even keel. The tricky bit is when and how abruptly to reverse course. The balance sheet of the Fed has grown enormously in the last few years and at some point the money it has created has to be withdrawn from the economy, again by open-market operations, this time selling federal bonds. If that weren’t done, it’s possible a 1970s inflation could break out. But there is always strong political pressure to keep money cheap.

The economy has clearly been improving, with corporate profits up and housing prices now rising. Since most families’ net worth is concentrated in their homes, a rising housing market makes people feel richer. And that makes them more likely to go out and buy, pumping up the economy. To be sure, unemployment is stubbornly high, but it’s a lagging indicator, tending to recover more slowly than other economic indicators.

So Ben Bernanke, the chairman of the Federal Reserve, has begun to hint that the Fed’s quantitative easing is drawing to a close. It’s been buying $85 billion worth of federal bonds a month. The markets have been reacting badly to Bernanke’s Delphic pronouncements. The Dow was above 15,300 last Tuesday. Right now it’s below 14,700, a drop of four percent. With the prospect of interest rates rising, bonds have been declining as well.

But these are short-term flutters in the stock market. It is corporate profits that determine the movement of equities. As long as corporate profits are strong and growing, the market will not swoon. Rising interest rates, however, will cause bond prices to decline in proportion.

The Fed has an unenviable job right now. If it acts too slowly, inflation could set in. If it acts too quickly, the economy could be tipped back into recession. And those with a dog in the fight—which is practically every interest group in the country—will be pushing hard to get its way.

Read Less

The Jobs Report

There is little news in this morning’s jobs report from the Bureau of Labor Statistics. There were 175,000 jobs created in May, but the unemployment rate ticked up a notch to 7.6 percent. (The BLS euphemistically called the unemployment rate “essentially unchanged.” I doubt they would have used that phrase had it gone down a notch.)

The number of unemployed, 11.8 million, stayed the same, as did the number of long-term unemployed (over 27 weeks), at 4.4 million. The unemployment rate for teenagers (24.5 percent) and blacks (13.5) remained dismal. The rate for blacks actually went up, from 13.2 percent.

Read More

There is little news in this morning’s jobs report from the Bureau of Labor Statistics. There were 175,000 jobs created in May, but the unemployment rate ticked up a notch to 7.6 percent. (The BLS euphemistically called the unemployment rate “essentially unchanged.” I doubt they would have used that phrase had it gone down a notch.)

The number of unemployed, 11.8 million, stayed the same, as did the number of long-term unemployed (over 27 weeks), at 4.4 million. The unemployment rate for teenagers (24.5 percent) and blacks (13.5) remained dismal. The rate for blacks actually went up, from 13.2 percent.

The statistics also show, starkly, the importance of education, or at least education credentials. For people over 25 with less than a high school diploma, the unemployment rate is 11.1 percent. For those with a high school diploma but no more, it’s 7.4 percent. With some college, it’s 6.5 percent. For those with a college degree, it’s only 3.8 percent.

In all, President Obama continues to preside over the worst economic recovery since the Great Depression. As James Pethokoukis tweeted this morning, the Obama administration promised in January 2009 that, if the stimulus passed, the unemployment rate today would be just above five percent.

Read Less

Housing Makes a Comeback

The housing market, which was the epicenter of the recession that began in 2007, is bouncing back. The Wall Street Journal reports that housing prices in March were up 10.2 percent from a year earlier, the best such figure since 2006, when housing prices began to collapse. Home sales are also up from a year ago, by 9.7 percent, and houses are selling more quickly, according to an earlier Journal story.

This is good news for the economy as a whole, reflected in the fact that the Dow Jones Industrial Average hit a record high yesterday and yields on treasuries rose sharply (which, of course, causes bond prices to fall).

Read More

The housing market, which was the epicenter of the recession that began in 2007, is bouncing back. The Wall Street Journal reports that housing prices in March were up 10.2 percent from a year earlier, the best such figure since 2006, when housing prices began to collapse. Home sales are also up from a year ago, by 9.7 percent, and houses are selling more quickly, according to an earlier Journal story.

This is good news for the economy as a whole, reflected in the fact that the Dow Jones Industrial Average hit a record high yesterday and yields on treasuries rose sharply (which, of course, causes bond prices to fall).

For most families, their home is their biggest investment, so when housing prices are rising they feel richer. And people tend to increase spending when they’re feeling rich. That boosts the economy generally.

But while this is, certainly, good news, the economy is not yet booming by any means. Unemployment remains stubbornly high. The Federal Reserve continues to keep interest rates very low and is still injecting $85 billion a month into the economy by buying federal bonds and mortgaged-backed securities. Only when the Fed begins the very tricky task of paring down its balance sheet and letting interest rates rise back to more normal levels will we be able to say the Great Recession is well and truly over.

Read Less

America’s Still-Weak Economy

Friday’s job report, which showed that 165,000 jobs were created in April and the unemployment rate dropped to 7.5 percent, was greeted by many news outlets as wonderful news. It’s not clear to me why.

I’ll happily concede that the jobs report indicates that the economy is not in immediate danger of lurching into another recession. And it’s true that the stock market is doing very well, with the Dow having crossed 15,000 for the first time. 

Read More

Friday’s job report, which showed that 165,000 jobs were created in April and the unemployment rate dropped to 7.5 percent, was greeted by many news outlets as wonderful news. It’s not clear to me why.

I’ll happily concede that the jobs report indicates that the economy is not in immediate danger of lurching into another recession. And it’s true that the stock market is doing very well, with the Dow having crossed 15,000 for the first time. 

At the same time, we’re now nearly four years after the recession officially ended. Historically, the worse the recession, the better the recovery. But not in the age of Obama. Over the last year we created substantially less than 200,000 jobs a month (173,000). In addition, the number of hours worked in April declined–an indication that we’re seeing a rise in part-time, not full-time, jobs. (This phenomenon may well include the effect of the Affordable Care Act on small businesses.)

Moreover, (a) the civilian workforce participation rate remained at a 34-year low (63.3 percent); (b) last week the U.S. home-ownership rate fell to the lowest in almost 18 years; and (c) growth is anemic. As I mentioned in a previous post, Jeff Cox, a CNBC senior writer, earlier this week wrote, “In terms of actual growth, this is … the worst economy in 83 years. GDP growth is in the midst of its longest sub-3 percent annual growth rate since 1929, the beginning of the Great Depression.”

We are now almost four years after the official end of the recession, and over the last year the economy has grown at less than 2 percent (1.8 percent). In addition, as James Pethokoukis points out, the U.S. lost 8.8 million private sector jobs during the Great Recession. Since the beginning of the jobs recovery, we have gained back 6.8 million, leaving a gap of about 2 million. 

On Friday we received a mediocre jobs report that is indicative of a mediocre economy. What is unfortunate is that this is the best that President Obama can claim after more than four years in office.

Read Less

The Dow at 15,000

The Dow Jones Industrial Average hit 15,000 this morning, the first time it has crossed that benchmark. Even if it backs off and closes below that level, this is a remarkable recovery from its Great Recession low in March 2009, when it hit 6,626. In the last four years the Dow has risen 123 percent.

How do we square such a bull market with the anemic recovery I noted earlier today and the long period of sub-par growth that Pete Wehner referred to? To be sure, the stock market is a leading indicator, recovering sooner than the economy as a whole, whereas unemployment is a lagging indicator. But it takes more than that to explain things.

Read More

The Dow Jones Industrial Average hit 15,000 this morning, the first time it has crossed that benchmark. Even if it backs off and closes below that level, this is a remarkable recovery from its Great Recession low in March 2009, when it hit 6,626. In the last four years the Dow has risen 123 percent.

How do we square such a bull market with the anemic recovery I noted earlier today and the long period of sub-par growth that Pete Wehner referred to? To be sure, the stock market is a leading indicator, recovering sooner than the economy as a whole, whereas unemployment is a lagging indicator. But it takes more than that to explain things.

A major part of the reason, I think, is the fact that there is a lot of cash–corporate, pension fund, and personal–sitting on the sidelines right now. The uncertainties regarding Europe, ObamaCare, Syria, etc., are making companies reluctant to put that capital into expansion.

But the usual places to invest cash, such as treasuries or CD’s, are paying practically nothing right now, with the Fed keeping interest rates at records lows. Even ten-year treasuries are paying a dismal 1.72 percent, treasury bills, which mature in less than a year, far less than that. So the only game in town is the stock market and money has been pouring into Wall Street, sending the markets up and that, of course, becomes self-re-enforcing.

Will it last? That depends on the outcome of the various uncertainties.

Read Less

The Jobs Report

According to the jobs report released this morning, the recovery continues to dawdle along, confirming its status as the worst recovery since the Great Depression.

There were 165,000 jobs created last month, and the unemployment rate dropped another tenth of a percent, to 7.5 percent. That’s down four-tenths of a percent since January. But, again, much of the drop in unemployment has not come about through job growth but through workers dropping out of the labor force. The participation rate, the percentage of the population holding jobs, remained unchanged over last month, at 63.3 percent, but that’s down from 63.6 percent in January. It has been dropping steadily throughout the so-called recovery.

Read More

According to the jobs report released this morning, the recovery continues to dawdle along, confirming its status as the worst recovery since the Great Depression.

There were 165,000 jobs created last month, and the unemployment rate dropped another tenth of a percent, to 7.5 percent. That’s down four-tenths of a percent since January. But, again, much of the drop in unemployment has not come about through job growth but through workers dropping out of the labor force. The participation rate, the percentage of the population holding jobs, remained unchanged over last month, at 63.3 percent, but that’s down from 63.6 percent in January. It has been dropping steadily throughout the so-called recovery.

The jobless rate among teenagers (24.1 percent), blacks (13.2) and Hispanics, (9.0) remains dismal. So does the number of people working part-time for lack of a full-time job, which increased by 278,000 to 7.9 million.

All in all, a status quo report where the status is pretty lousy.

Read Less

Balancing the Budget

I certainly agree with Seth Mandel that the federal budget can never be brought under control without entitlement reform. Entitlements are well over half the budget. And the dates when each program will reach insolvency are all known. Those dates are not that far away, some less than 10 years.

He says there are only two ways to get to a balanced budget. One is a balanced budget amendment to the Constitution that would force the government to spend within its means and the other is for the president and Congress to man up and just live within the government’s means, however inconvenient that will be politically.

Read More

I certainly agree with Seth Mandel that the federal budget can never be brought under control without entitlement reform. Entitlements are well over half the budget. And the dates when each program will reach insolvency are all known. Those dates are not that far away, some less than 10 years.

He says there are only two ways to get to a balanced budget. One is a balanced budget amendment to the Constitution that would force the government to spend within its means and the other is for the president and Congress to man up and just live within the government’s means, however inconvenient that will be politically.

Unfortunately, neither of those will do it. In the latter case, human nature simply makes it impossible. Politicians, like everyone else, are motivated by self-interest and spending money is more likely to further that self-interest than fiscal restraint. Fiscal restraint is a long-term benefit, benefiting the population in general. Spending is a short-term benefit, usually benefiting a specific group, who will reward the politician with votes and campaign contributions. That means there is always a tide pushing in the direction of more spending. And with every politician’s short-term self-interest in tomorrow’s headline and the next election, that tide will, at least collectively, not be fought. And, of course, log-rolling is how things are done in Congress: You vote for my bridge to nowhere and I’ll vote for your useless airport.

Nor can a balanced budget amendment work as long as those who spend the money (members of Congress and the president) get to decide how to keep the books. As Seth points out, most states have balanced budget requirements in their constitutions and state governments often make end-runs around them in order to spend without having to raise taxes. Just this week, the SEC accused Illinois (to be sure, the poster child of state budgetary malfeasance) of securities fraud in regard to the information it gave investors about the bonds it issued to fund its pension system. State pension funds are often underfunded by the simple expedient of predicting rates of return that are unlikely to be achieved. This allows states to contribute less to those funds in the here and now, while the consequences are only apparent in the long term.

So what to do? If a balanced budget amendment won’t work as long as politicians have the choice of either balancing the budget or cooking the books to make it appear balanced, an amendment making it impossible to cook the books would. Such an amendment (or act of Congress) could set up an independent board, modeled on the Federal Reserve (which keeps the power to print money out of the hands of politicians). This board would have the power to establish the rules by which federal accounting is done, with a mandate to make the federal books honest, transparent, and complete. Corporations can’t make the rules by which they keep their books; why should government have that power? More, it would take over most of the functions of the OMB and the CBO, which are the creatures of the White House and Congress respectively. An independent agency should “score” legislation.

Second, make the president once more a major player in the budget negotiations.  The president is the only person in Washington whose political interests are the same as the interests of the country as a whole. The 535 members of Congress are more concerned with bringing home the bacon to their state or district, with its immediate political benefit to themselves, than in balancing the budget, however much lip service they give the latter.

The Budget Control Act of 1974 was perhaps the most misnamed piece of legislation ever to be signed into law, as it caused the budget to immediately and permanently spin out of control. A major reason is that it made the president a political eunuch in budgetary matters. He prepares a budget (well, the law requires him to, but Obama’s 2014 budget is a month and a half late and counting) but it is always more or less dead on arrival in Congress. And beyond that, his only budgetary weapon is to veto one or more of the 13 appropriations bills that fund the discretionary part of the budget, a very powerful but blunt weapon indeed. (It’s no weapon at all, of course, when there are no appropriations bills, only a continuing resolution to fund the entire discretionary budget, as has been the case in recent years.)

The Budget Control Act removed the president’s power to “impound” funds, i.e. refuse to spend them. Restoring that power or, better yet, giving him a line-item veto that would pass constitutional muster, would give him a powerful tool in budget negotiations (“I’ll give you your bridge to nowhere if you’re with me on entitlement reform”). Further, giving the president the power to limit overall spending, subject to a congressional override, would further strengthen his hand. None of this would be easy to achieve, as the very people who would have to pass the necessary amendments and acts would be the same people whose power would be greatly constrained by them. And, as James Madison explained, “Men love power.” Certainly as long as the economically illiterate and politics-obsessed Washington press corps fails to do its job, not much will happen. At least until the marketplace takes control and sends the cost of federal borrowing up to Greek levels.

Read Less

Obama’s Second Term Troubles Have Begun

In the aftermath of President Obama’s now-obvious-to-all sequester overreach–in which he first predicted the end of the world as we know it, then backed away from those claims once the cuts went into effect, then attempted to inflict maximum pain on the American people, and is now blaming the Secret Service for the stupid and unnecessary decision to shut down White House tours–something is changing.

President Obama’s RealClearPolitics.com approval rating is in the 40s. His disapproval rating exceeds his approval rating in three different polls (Fox, McClatchy/Marist, and Quinnipiac). Congressional Democrats are beginning to grouse. And according to a Washington Post story yesterday, Mr. Obama’s approval rating at this early stage in his second term is among the lowest of any president in the post-World War II era.

Read More

In the aftermath of President Obama’s now-obvious-to-all sequester overreach–in which he first predicted the end of the world as we know it, then backed away from those claims once the cuts went into effect, then attempted to inflict maximum pain on the American people, and is now blaming the Secret Service for the stupid and unnecessary decision to shut down White House tours–something is changing.

President Obama’s RealClearPolitics.com approval rating is in the 40s. His disapproval rating exceeds his approval rating in three different polls (Fox, McClatchy/Marist, and Quinnipiac). Congressional Democrats are beginning to grouse. And according to a Washington Post story yesterday, Mr. Obama’s approval rating at this early stage in his second term is among the lowest of any president in the post-World War II era.

According to the Washington Post-ABC News poll, half of independents express a negative opinion of the president’s performance; just 44 percent approve.
 A majority of Americans give Obama negative marks on handling the economy. And the president has only a four-percentage-point lead over Republicans when it comes to whom the public trusts more to deal with the economy.

This is clearly not where a president who is less than two months into his second term wants to be. But in some respects, it’s not all that surprising. Mr. Obama, while he won his contest with Governor Romney fairly handily, was not a particularly popular president for most of his first term–and the key elements of his agenda are decidedly unpopular.

It hasn’t helped the president that the transition period was characterized by a fractious debate with Republicans over the so-called fiscal cliff, followed by an equally fractious debate with Republicans over sequestration. The public appears to be tiring of these Obama-manufactured crises. And polling indicates that they are tiring as well of tax increases, which is at the heart of Obama’s economic theory, such as it is. So the president’s standing is fairly weak.

That could of course change; public opinion polls are ephemeral and the currents in politics can shift quickly. That said, I believe that one of the most important political facts of Obama’s second term will be the increasing unpopularity of the Affordable Care Act, which is the crowning domestic achievement of the Obama presidency.

It’s never been popular, even when it passed–and it’s gotten less popular over time. Moreover, it’s noxious effects are only now beginning to be felt–and they’ll get worse, not better, as more and more of this monstrously unworkable plan begins to kick in.

My assumption is that by the middle and end of Obama’s second term, reactionary liberalism, having been tried, will have failed. Badly. At that point the public will turn its lonely eyes to Republicans. They need to be ready. My guess is they will be.

Read Less

Obama’s Pivot Away from Jobs

It hasn’t been a good week in economic news. Earlier this week we learned that the GDP contracted. John Steele Gordon wrote at the time: “The GDP shrank in the last quarter of 2012, declining a small 0.1 percent. While that is minimal, it is the first negative quarter since the second quarter of 2009 and a sharp slowdown from the 3.1 percent growth in the third quarter.” Today he wrote about the disappointing jobs numbers, which showed low growth and a slightly higher unemployment rate. 

It’s interesting that this week, in light of all of this economic doom and gloom, that the Obama administration has decided to layoff its long-defunct Jobs Council, which was set to expire this week. Don’t worry about these layoffs, however, as the Council was composed of business and labor leaders–they all have day jobs to fall back on. The Council hasn’t met for over a year and served more as a photo opportunity than an actual working group–while photos were quick to emerge from the meetings, recommendations, reports and accomplishments never quite made it out. One member of the Council, Intel’s CEO Paul Otellini, didn’t exactly have much confidence in the president last year, as he publicly endorsed his Republican opponent Mitt Romney.

Read More

It hasn’t been a good week in economic news. Earlier this week we learned that the GDP contracted. John Steele Gordon wrote at the time: “The GDP shrank in the last quarter of 2012, declining a small 0.1 percent. While that is minimal, it is the first negative quarter since the second quarter of 2009 and a sharp slowdown from the 3.1 percent growth in the third quarter.” Today he wrote about the disappointing jobs numbers, which showed low growth and a slightly higher unemployment rate. 

It’s interesting that this week, in light of all of this economic doom and gloom, that the Obama administration has decided to layoff its long-defunct Jobs Council, which was set to expire this week. Don’t worry about these layoffs, however, as the Council was composed of business and labor leaders–they all have day jobs to fall back on. The Council hasn’t met for over a year and served more as a photo opportunity than an actual working group–while photos were quick to emerge from the meetings, recommendations, reports and accomplishments never quite made it out. One member of the Council, Intel’s CEO Paul Otellini, didn’t exactly have much confidence in the president last year, as he publicly endorsed his Republican opponent Mitt Romney.

James Pethokoukis, a leading economics blogger for AEI, discussed the decision to close the Council yesterday, highlighting several charts that showcase why the mission to improve the employment picture is far from accomplished. As Pethokoukis shows, beyond the GDP and jobs numbers, there are a number of indicators that the economy is stagnating at best. What is inexplicable is why the Obama administration has decided to pivot from the precarious economic situation for millions of Americans to instead focus on immigration and gun control. 

Read Less

The Jobs Report

Well, another month, another mediocre jobs report. The economy added 157,000 jobs in January while the unemployment rate ticked up a notch to 7.9 percent.

Those who have been unemployed long-term remained at a dismal 4.8 million and were 38.1 percent of all unemployed. There were 8 million people working part-time who would rather be working full-time. That number might well go up in the future as companies adjust their workforces to avoid Obamacare mandates requiring health insurance (or a fine) if there are more than 50 full-time employees.

Read More

Well, another month, another mediocre jobs report. The economy added 157,000 jobs in January while the unemployment rate ticked up a notch to 7.9 percent.

Those who have been unemployed long-term remained at a dismal 4.8 million and were 38.1 percent of all unemployed. There were 8 million people working part-time who would rather be working full-time. That number might well go up in the future as companies adjust their workforces to avoid Obamacare mandates requiring health insurance (or a fine) if there are more than 50 full-time employees.

The terrible figures for teenage unemployment (23.4 percent) and black unemployment (13.8 percent) are little changed.

In sum, the economy is continuing the most dismal recovery since the Great Depression and is now virtually at a standstill. The GDP ticked down last month, unemployment ticked up (and if it ticks up one more notch, it will be back to 8 percent, a significant psychological benchmark, especially as it would have been trending upwards since its September level of 7.7 percent).

The Fed has announced that it will continue its easy money policy, buying more than $90 billion of federal bonds and mortgage-backed securities a month, until the unemployment rate hits 6.5 percent. Judging from the last few months, that means for the foreseeable future.

Read Less

Next Recession Belongs to Obama, Not GOP

Democrats spent the 2012 presidential campaign successfully blaming George W. Bush for the country’s sluggish economy. But a week after President Obama’s second inaugural, they are still not taking responsibility for the country’s fiscal health. The White House responded to yesterday’s disturbing news that GDP declined for the first time since 2009 in predictable fashion: they blamed the bad numbers on Republicans. White House spokesman Jay Carney said the dip was the fault of “Congressional Republicans” who have tried to restrain the government’s out-of-control spending. Even though the president got his way in the fiscal cliff negotiations with the GOP, Carney said the threat of sequestration, which would mandate across-the-board spending cuts, is the real culprit for the downturn and that the “brinksmanship” by the House Republicans was victimizing the nation’s economy.

This was thin gruel even from a practiced spin master like Carney. The idea of sequestration, which will have a particularly devastating effect on defense, originated in the White House and not the GOP caucus before it was put into the 2011 deal on the debt ceiling. But while we must give Carney credit for his usual chutzpah, the idea that Republican efforts to face up to chronic fiscal problems via entitlement reforms is to blame is a particularly depressing example of the ideological dead end into which the administration has driven the economy. As John Steele Gordon wrote yesterday, there is no way of knowing yet whether yesterday’s GDP numbers are the harbinger of an Obama recession or merely a statistical anomaly, but the steadfast refusal of the White House to face up to the long-term threats is what could be driving the economy into the ditch.

Read More

Democrats spent the 2012 presidential campaign successfully blaming George W. Bush for the country’s sluggish economy. But a week after President Obama’s second inaugural, they are still not taking responsibility for the country’s fiscal health. The White House responded to yesterday’s disturbing news that GDP declined for the first time since 2009 in predictable fashion: they blamed the bad numbers on Republicans. White House spokesman Jay Carney said the dip was the fault of “Congressional Republicans” who have tried to restrain the government’s out-of-control spending. Even though the president got his way in the fiscal cliff negotiations with the GOP, Carney said the threat of sequestration, which would mandate across-the-board spending cuts, is the real culprit for the downturn and that the “brinksmanship” by the House Republicans was victimizing the nation’s economy.

This was thin gruel even from a practiced spin master like Carney. The idea of sequestration, which will have a particularly devastating effect on defense, originated in the White House and not the GOP caucus before it was put into the 2011 deal on the debt ceiling. But while we must give Carney credit for his usual chutzpah, the idea that Republican efforts to face up to chronic fiscal problems via entitlement reforms is to blame is a particularly depressing example of the ideological dead end into which the administration has driven the economy. As John Steele Gordon wrote yesterday, there is no way of knowing yet whether yesterday’s GDP numbers are the harbinger of an Obama recession or merely a statistical anomaly, but the steadfast refusal of the White House to face up to the long-term threats is what could be driving the economy into the ditch.

What Carney failed to mention is that every business in America is worrying about the implications of the president’s signature legislative achievement. ObamaCare is about to go into effect and the fear that it will drive up health-care costs in a way that could sink even substantial companies is already having a powerful impact on job growth and investment. Add in worries about the mounting federal debt and the government’s spending problems—which, contrary to the assertion of Senator Mary Landrieu, is a grim reality and not the invention of FOX News analysts—as well as Democratic threats to raise taxes and you have the makings of a perfect storm that could well create another Great Recession.

It is true that the uncertainty over the future that is fueled by the standoffs over the debt ceiling hasn’t helped the economy. The president has succeeded in fooling much of the public into believing this is solely the work of Republican obstruction, but now that the House GOP has punted on the debt ceiling, it is going to be difficult for Carney to keep pretending that it is House Speaker John Boehner and the Tea Party, rather than the man in the Oval Office, who has the principal responsibility for what is going on.

If the next growth report shows a negative number, President Obama will find himself presiding over his own recession. He may try to pin it on the GOP, but in his fifth year in the White House, that is a trick that even a master like Jay Carney will have trouble pulling off. The next recession, which may already be starting, is the work of an administration that is prepared to saddle the country with more debt in order to realize their liberal fantasies of expanded government, not the last-ditch efforts of generally powerless Republicans trying to stave off impending disaster.

Read Less

The GDP Takes a Hit

The GDP shrank in the last quarter of 2012, declining a small 0.1 percent. While that is minimal, it is the first negative quarter since the second quarter of 2009 and a sharp slowdown from the 3.1 percent growth in the third quarter. Government spending was down sharply, while businesses cut inventories. Foreign trade was down 5.7 percent. But consumer spending was up 2.2 percent, an increase from the previous quarter. And housing continued its slow recovery.

So what’s going on? Good question. It could just be a blip or it could be the start of a new recession. (The usual definition of a recession is two consecutive quarters of declining GDP, or what economists, with their usual talent for assaulting the English language, call “negative growth.”)

Read More

The GDP shrank in the last quarter of 2012, declining a small 0.1 percent. While that is minimal, it is the first negative quarter since the second quarter of 2009 and a sharp slowdown from the 3.1 percent growth in the third quarter. Government spending was down sharply, while businesses cut inventories. Foreign trade was down 5.7 percent. But consumer spending was up 2.2 percent, an increase from the previous quarter. And housing continued its slow recovery.

So what’s going on? Good question. It could just be a blip or it could be the start of a new recession. (The usual definition of a recession is two consecutive quarters of declining GDP, or what economists, with their usual talent for assaulting the English language, call “negative growth.”)

Certainly the uncertainty about future government policy, the effects of Obamacare, and the ever-mounting national debt, haven’t helped. Neither have even greater economic problems in other parts of the world, especially Europe. India lowered its bank rate yesterday and China is facing rising labor costs and labor unrest. Even Canada, which has been a bit of a golden boy of fiscal responsibility and good economic management in recent years, has seen its big banks taken down a notch in the last few days.

The stock market, meanwhile, has been booming, up nearly 1,500 points on the Dow since mid-November and now only a couple of hundred points off its all-time-high, reached in October 2007. The stock market is almost always a leading indicator, foretelling the future of the economy. That could be the case here, or it could just be a lot of foreign money fleeing to safer quarters from such deeply troubled economies as Spain, Argentina, and even France, whose employment minister the other day publicly described the country as “totally bankrupt.” He walked it back, of course (one can imagine the phone call from François Hollande), but still.

The GDP dip is certainly no cause for panic. It is trends that matter in economics, not one-time statistics. But it is clearly a time for caution.

Read Less

The Jobs Report

The unemployment rate fell to 7.7 percent from 7.9 in October, and 146,000 jobs were added to the economy. But the first number is from the Household Survey data and the second from the Establishment Survey data. As usual in this economy, the two surveys tell different stories.

According to the Household Survey, the number of unemployed remained about the same, at 12 million, and long-term unemployed made up 40.1 percent of total unemployed, both dismal numbers. Equally dismal was the number of underemployed, working part-time jobs but wanting full-time work, at 8.2 million.

Read More

The unemployment rate fell to 7.7 percent from 7.9 in October, and 146,000 jobs were added to the economy. But the first number is from the Household Survey data and the second from the Establishment Survey data. As usual in this economy, the two surveys tell different stories.

According to the Household Survey, the number of unemployed remained about the same, at 12 million, and long-term unemployed made up 40.1 percent of total unemployed, both dismal numbers. Equally dismal was the number of underemployed, working part-time jobs but wanting full-time work, at 8.2 million.

Again the participation rate (the percentage of working-age adults in the labor force) declined, to 63.6 percent, accounting for most of the decline in the unemployment number. The baby boomers retiring at the rate of 10,000 a day is the only thing that is keeping the numbers from being even more dismal than they are.

Read Less

Re: The Jobs Report

As John Steele Gordon noted, the unemployment rate ticked up slightly last month, but it’s still just below 8 percent — a psychological barrier that would have certainly hurt Obama days before the election. Still, it’s important to remember where we were supposed to be at this point, at least according to the Obama administration’s 2009 estimates that were used to sell the stimulus package to the public. Jim Pethokoukis writes

Back in early 2009, White House economists Christina Romer and Jared Bernstein predicted the unemployment rate would be 5.2% in October 2012 if Congress passed the $800 billion stimulus. As the above chart shows, they weren’t even close.

Read More

As John Steele Gordon noted, the unemployment rate ticked up slightly last month, but it’s still just below 8 percent — a psychological barrier that would have certainly hurt Obama days before the election. Still, it’s important to remember where we were supposed to be at this point, at least according to the Obama administration’s 2009 estimates that were used to sell the stimulus package to the public. Jim Pethokoukis writes

Back in early 2009, White House economists Christina Romer and Jared Bernstein predicted the unemployment rate would be 5.2% in October 2012 if Congress passed the $800 billion stimulus. As the above chart shows, they weren’t even close.

Click above for the chart, which, as Pethokoukis notes, isn’t even close. In fact, their estimates of what the unemployment rate would look like without the stimulus is much lower than our current rate. 

According to Fox News, we might be waiting a long time for the numbers the White House predicted:

The October numbers allow President Obama to argue the economy is technically growing under his watch. But they also allow Mitt Romney to argue that the new jobs are not making much of a dent in the unemployment problem. Both campaigns quickly set to work putting their spin on data that, if nothing else, underscores the slow pace of the recovery. 

Former Bureau of Labor Statistics chief Keith Hall told Fox Business Network that at this rate, “we’re still talking nine or 10 years” before the economy gets back to normal.

Remember when Obama said he could get it done in three, otherwise it would be a “one-term proposition”? Now we’re told even if he’s reelected not to expect the economy to bounce back until well after he’s out of office. How’s that for accountability?

Read Less




Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.