Commentary Magazine


Topic: jobs report

The Jobs Report

The employment picture brightened somewhat in June, with 288,000 new jobs (up from a revised 224,000 in May) and a decline in the unemployment rate to 6.1 percent from 6.3. That’s the lowest unemployment rate since August 2008, on the eve of the financial crisis. We have now had job growth above 200,000 for the last five months, the first time that has happened since the very prosperous years of the late 1990s. The number of long-term unemployed (over 27 weeks) declined by 293,000. Unemployment among African-Americans fell from 11.5 percent to 10.7.

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The employment picture brightened somewhat in June, with 288,000 new jobs (up from a revised 224,000 in May) and a decline in the unemployment rate to 6.1 percent from 6.3. That’s the lowest unemployment rate since August 2008, on the eve of the financial crisis. We have now had job growth above 200,000 for the last five months, the first time that has happened since the very prosperous years of the late 1990s. The number of long-term unemployed (over 27 weeks) declined by 293,000. Unemployment among African-Americans fell from 11.5 percent to 10.7.

But the picture was not all bright. The number of involuntary part-time workers increased by 275,000. Teenage unemployment increased to 21 percent. Among black teenagers it was a horrendous 33.4 percent, up from 31.1 percent in May. One in three black teenagers in the labor force are unemployed. The participation rate stayed steady at 62.8 percent for the third month in a row. But that is down from a year ago, when it was 64 percent and way down from before the recession. So much of the drop in unemployment came from people dropping out of the labor force, not finding jobs.

And many of the new jobs were at the low end of the pay scale. While retail jobs increased by 40,000 and leisure and hospitality 39,000, higher-paying jobs in manufacturing (16,000) and construction (6,000) were far fewer.

So while the news is good, it is not unalloyed good. We’ll know we are finally in a full-fledged recovery when the participation rate begins to climb steadily as discouraged workers see more opportunity and begin looking for jobs. That might send the unemployment rate up at first, but that, paradoxically, would actually be good news.

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The Jobs Report

If the Commerce Department’s first-quarter GDP report that came out on Wednesday was bad news for the administration, the Bureau of Labor Statistics’ jobs report this morning is good news.

The economy added 288,000 new jobs last month and the February and March figures were upped from previous estimates to 222,000 and 203,000 respectively. The 288,000 figure represents the largest number of jobs added in a month since January 2012, and the second biggest since recovery began in June 2009. The statistics for most subgroups moved in the right direction as well. Black unemployment, for instance, fell from 12.4 percent to 11.6 percent.

But the big news is that the unemployment rate fell a whopping four-tenths of a percent to 6.3 percent, the lowest since September 2008, just before the financial crisis struck with full force. Economists had been expecting a drop to 6.6 percent. However, part of that drop can be attributed to a sharp drop in the total labor force, which shrank by 806,000. The labor force participation rate also fell by 0.4 percent to a dismal 62.8 percent. It was 66 percent in September 2008. If it were still at 66 percent the unemployment rate would be far higher than it is.

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If the Commerce Department’s first-quarter GDP report that came out on Wednesday was bad news for the administration, the Bureau of Labor Statistics’ jobs report this morning is good news.

The economy added 288,000 new jobs last month and the February and March figures were upped from previous estimates to 222,000 and 203,000 respectively. The 288,000 figure represents the largest number of jobs added in a month since January 2012, and the second biggest since recovery began in June 2009. The statistics for most subgroups moved in the right direction as well. Black unemployment, for instance, fell from 12.4 percent to 11.6 percent.

But the big news is that the unemployment rate fell a whopping four-tenths of a percent to 6.3 percent, the lowest since September 2008, just before the financial crisis struck with full force. Economists had been expecting a drop to 6.6 percent. However, part of that drop can be attributed to a sharp drop in the total labor force, which shrank by 806,000. The labor force participation rate also fell by 0.4 percent to a dismal 62.8 percent. It was 66 percent in September 2008. If it were still at 66 percent the unemployment rate would be far higher than it is.

If the trend of the last three months continues, one would expect more people to enter the labor force and that could push the unemployment rate back up for a while.

All in all, the Obama White House is happy this morning. Well, at least about the employment statistics if nothing else.

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The Jobs Report

The monthly jobs report is modestly good news for the economy. While the unemployment rate stayed at 6.7 percent, the economy created 192,000 new jobs and the job totals for January and February were upped by a combined 37,000. There was other good news too. Teenage unemployment declined from 21.4 percent to 20.9. But the unemployment rate for black teenagers (which tends to be volatile) rose from 32.4 to 36.1. That might reflect more black teenagers coming into the job market, looking for employment. The participation rate ticked up from 63 to 63.2 percent. But it’s still down from a year ago, when it was at 63.3.

The economy needs at least 250,000 new jobs a month to achieve a steady decline in the unemployment rate and we have had only three months with job creation that robust since the end of 2011. So the recovery remains sluggish.

The administration will undoubtedly be touting the fact that the economy now has more private-sector jobs (116.09 million) than at the former peak in January 2008, when there were 115.98 million private-sector jobs. But don’t look for the administration to take note that since January 2008, governments have shed a total of 535,000 jobs, so the national job total is still well below the pre-recession peak. It won’t make the point either that the civilian labor force is 2 million people larger than it was six years ago, and that the participation rate was then 66.2 percent as opposed to today’s 63.2 percent.

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The monthly jobs report is modestly good news for the economy. While the unemployment rate stayed at 6.7 percent, the economy created 192,000 new jobs and the job totals for January and February were upped by a combined 37,000. There was other good news too. Teenage unemployment declined from 21.4 percent to 20.9. But the unemployment rate for black teenagers (which tends to be volatile) rose from 32.4 to 36.1. That might reflect more black teenagers coming into the job market, looking for employment. The participation rate ticked up from 63 to 63.2 percent. But it’s still down from a year ago, when it was at 63.3.

The economy needs at least 250,000 new jobs a month to achieve a steady decline in the unemployment rate and we have had only three months with job creation that robust since the end of 2011. So the recovery remains sluggish.

The administration will undoubtedly be touting the fact that the economy now has more private-sector jobs (116.09 million) than at the former peak in January 2008, when there were 115.98 million private-sector jobs. But don’t look for the administration to take note that since January 2008, governments have shed a total of 535,000 jobs, so the national job total is still well below the pre-recession peak. It won’t make the point either that the civilian labor force is 2 million people larger than it was six years ago, and that the participation rate was then 66.2 percent as opposed to today’s 63.2 percent.

All in all, the new jobs report displays an economy that is growing but hardly soaring. It’s not yet morning in America, to coin a phrase, but there is, perhaps, a hint of pink in the east.

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The Jobs Report

In January the economy added 113,000 new jobs. That’s better than December’s dismal 75,000 but nowhere near the 200,000 jobs that the economy was adding from August through November last year, nor the number needed to feed robust economic growth. The unemployment rate went down to 6.6 percent from 6.7 percent.

But the labor participation rate ticked up two notches to 63, from 62.8 last month. It’s still below the 63.6 where it was last January.

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In January the economy added 113,000 new jobs. That’s better than December’s dismal 75,000 but nowhere near the 200,000 jobs that the economy was adding from August through November last year, nor the number needed to feed robust economic growth. The unemployment rate went down to 6.6 percent from 6.7 percent.

But the labor participation rate ticked up two notches to 63, from 62.8 last month. It’s still below the 63.6 where it was last January.

Teenage unemployment went up (to 20.7 percent from 20.2 percent) as did black unemployment (from 11.9 to 12.1). Those unemployed for more than 27 weeks decreased by 232,000 to 3.646 million, while those working part time who would rather be working full time dropped from 7.771 million to 7.257 million.

In short, it’s another typical Obama-era jobs report: not disastrous, but a long way from what a jobs report would look like in a healthy, growing economy.

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The Jobs Report

The new jobs report showed much stronger than expected job growth in October, up 203,000 when the forecast had been 120,000. The job growth for September and August were also revised upwards, giving an average for the three months of over 200,000, which is the number economists think is needed to bring unemployment down in the long term (the drop in unemployment in recent months was mostly due to people dropping out of the job market).

The unemployment rate actually ticked up last month, however, to 7.3 percent, but that was due to counting temporarily laid-off federal workers because of the shutdown early in the month.

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The new jobs report showed much stronger than expected job growth in October, up 203,000 when the forecast had been 120,000. The job growth for September and August were also revised upwards, giving an average for the three months of over 200,000, which is the number economists think is needed to bring unemployment down in the long term (the drop in unemployment in recent months was mostly due to people dropping out of the job market).

The unemployment rate actually ticked up last month, however, to 7.3 percent, but that was due to counting temporarily laid-off federal workers because of the shutdown early in the month.

Markets immediately reflected the possibility that the Federal Reserve might now begin to scale back the stimulus. The yield on 10-year treasury bonds rose to 2.72 percent in early trading from last evening’s 2.60 percent. But it will take more than one month’s good news to induce the Fed to move more than slightly.

And the jobs report was by no means all good news. The participation rate (the percentage of working-age people in the labor force) continued to decline, now down to 62.8 percent from 63.2 last month. The unemployment rates for teenagers (22.2 percent) and blacks (13.1 percent) remain dismal. The rate for teenagers is likely to go up in the future, as several localities, such as the state of New Jersey, raised their minimum wages in the election on Tuesday. When the teenage (i.e. unskilled) unemployment rate is over 20 percent, increasing the price of unskilled labor is economic lunacy.

The broader measure of unemployment, which includes discouraged job seekers and those involuntarily working part time, increased last month from 13.6 percent to 13.8 percent. It is only when this rate begins to decline substantially month-over-month that we can say we are, finally, on the way up.

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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.

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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.

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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.

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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.

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The Jobs Report

It’s a status quo jobs report this month, with little significant change in the numbers. The good news is the unemployment rate went down by a tick to 7.6 percent from 7.7 percent. The bad news is that the civilian labor force declined as well, by 493,000 people, and the participation rate, the percentage of the adult population in the labor force, declined to 63.1 percent, the lowest number in the 21st century. When President Obama took office, it was 65.7 percent. So the decline in unemployment is almost entirely due to a declining labor force, not a growing job pool. The number of new jobs in March was a mere 88,000, nowhere near enough to reduce unemployment on its own.

What is causing this stagnant job market after so deep a recession? The answer is that the amount of uncertainty in the marketplace is not declining, indeed it is growing, and there is nothing markets hate more than uncertainty. Europe’s deteriorating financial and economic situation is surely not helping, nor is the forthcoming implementation of Obamacare, with a legion of unanswered questions about how it will affect businesses from the Fortune 500 on down. When even two-thirds of Democrats think that Obamacare will either adversely impact them personally or have no effect, there is going to be a strong tendency to wait and see what happens.

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It’s a status quo jobs report this month, with little significant change in the numbers. The good news is the unemployment rate went down by a tick to 7.6 percent from 7.7 percent. The bad news is that the civilian labor force declined as well, by 493,000 people, and the participation rate, the percentage of the adult population in the labor force, declined to 63.1 percent, the lowest number in the 21st century. When President Obama took office, it was 65.7 percent. So the decline in unemployment is almost entirely due to a declining labor force, not a growing job pool. The number of new jobs in March was a mere 88,000, nowhere near enough to reduce unemployment on its own.

What is causing this stagnant job market after so deep a recession? The answer is that the amount of uncertainty in the marketplace is not declining, indeed it is growing, and there is nothing markets hate more than uncertainty. Europe’s deteriorating financial and economic situation is surely not helping, nor is the forthcoming implementation of Obamacare, with a legion of unanswered questions about how it will affect businesses from the Fortune 500 on down. When even two-thirds of Democrats think that Obamacare will either adversely impact them personally or have no effect, there is going to be a strong tendency to wait and see what happens.

If a Republican were in the White House, the mainstream media would be howling in outrage about this continuing terrible job market and demanding action. But since it’s Obama in the White House the MSM will undoubtedly be doing its usual oh-look!-a-squirrel! routine.

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The Jobs Report

The latest jobs report from the Bureau of labor Statistics was released this morning. It has some good news in that the unemployment rate fell two-tenths of a percent to 7.7 percent, and a net of 236,000 jobs were created (there were 246,000 jobs created in the private sector, while government shed 10,000).

Since 236,000 is above the rate of population growth, if it continues–and job growth has averaged 195,000 over the last three months–it would mean a slow, steady improvement. But, ironically, such an improvement might mean a short-term rise in unemployment as more people, encouraged by the number of new jobs, re-enter the labor market. The current unemployment rate is a mere one-tenth of a percent below where it was last September.

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The latest jobs report from the Bureau of labor Statistics was released this morning. It has some good news in that the unemployment rate fell two-tenths of a percent to 7.7 percent, and a net of 236,000 jobs were created (there were 246,000 jobs created in the private sector, while government shed 10,000).

Since 236,000 is above the rate of population growth, if it continues–and job growth has averaged 195,000 over the last three months–it would mean a slow, steady improvement. But, ironically, such an improvement might mean a short-term rise in unemployment as more people, encouraged by the number of new jobs, re-enter the labor market. The current unemployment rate is a mere one-tenth of a percent below where it was last September.

Break the figures down a little, however, and things aren’t quite so rosy. Unemployment among some subgroups, such as teenagers (25.1 percent), blacks (13.8 percent) and young adults 18-29, (12.5 percent), is much higher than the overall number. It’s still a dismal time to be graduating from school and entering the job market for the first time.

The long-term unemployed, which is to say those out of work for 27 weeks or longer, now number 4.8 million, fully 40.1 percent of all unemployed. Part-time workers who wish they could have full-time employment number 8 million.

Worse, the workforce participation rate, the percentage of the working-age population that is actually working, is only 63.5 percent. At the start of the recession it was 66 percent. In other words, millions of people have dropped out of the labor force. If they had not, the unemployment rate would be over 10 percent.

So while things are improving, they are a long way from good. The slowest recovery from recession since the Great Depression continues.

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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.

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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.

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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.

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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.

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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.

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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?

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The Jobs Report—III

The Sunday talk shows are, not surprisingly, spending a lot of time on the fact that the Bureau of Labor Statistics reported on Friday that the unemployment rate fell to 7.8 percent. The Obama talking heads are calling it “the lowest unemployment rate of the Obama presidency.”

Just for the record, that is not strictly accurate. When Obama was inaugurated on January 20, 2009, the latest unemployment figure that the BLS had reported was 7.2 percent for December 2008. When the January unemployment rate came in a few weeks later, it was 7.6 percent. Only in February did the rate go above 7.8 percent, coming in at 8.1.

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The Sunday talk shows are, not surprisingly, spending a lot of time on the fact that the Bureau of Labor Statistics reported on Friday that the unemployment rate fell to 7.8 percent. The Obama talking heads are calling it “the lowest unemployment rate of the Obama presidency.”

Just for the record, that is not strictly accurate. When Obama was inaugurated on January 20, 2009, the latest unemployment figure that the BLS had reported was 7.2 percent for December 2008. When the January unemployment rate came in a few weeks later, it was 7.6 percent. Only in February did the rate go above 7.8 percent, coming in at 8.1.

It continued to rise rapidly, reaching 10.2 percent in October 2009. (Unemployment is a lagging indicator: the recession officially ended in June 2009.) It stayed above 10 percent for three months, and then stayed above 9 percent for the next 21 months (with the exception of March 2011, when it briefly dipped to 8.9 percent). Only in October 2011, did it fall below 9 percent and stay there.

(The Wall Street Journal has a nifty interactive chart for monthly unemployment figures since January 1948. It shows graphically—in both the literal and metaphoric senses of the word—how brutal unemployment has been during the Obama presidency, far worse than any comparable period in the half-century measured by the chart.)

It’s still brutal, for job creation is still very anemic (a mere 114,000 in September). Most of what is making the jobs number decline is an increase in part-time jobs and the exit from the work force of people who are retiring or going on Social Security disability. The baby boom generation, born between 1946 and 1964, is the pig in the work-force python. They are now retiring at the rate of about 3,000 a day. That is helping lower the unemployment number, but not helping the true unemployment situation.

It might be noted, as well, that the next jobs report comes out on November 2, the Friday before the election. That’s the traditional day to drop a bombshell on your opponent because it does not leave him enough time to respond effectively.  Will the next unemployment figure be as bad news for Obama as last Friday’s was good news, a bombshell courtesy of the BLS? Assuming the September number was not manipulated, and I haven’t the slightest evidence (as opposed to hmmm-you-don’t-suppose? thoughts) that it is, it is at least even money that it will bounce back up, undoing the statistical anomaly of the previous month.

That would give the talking heads on Sunday, November 4, something to talk about.

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Here’s Why You Should Be Skeptical About Those Jobs Numbers…

A friend who works as a very very high-level consultant writes:

One of the things my shop does is create forecasting models for clients—major firms like [BIG RETAILER] and [BIG FOOD PRODUCER]—you know, people who have to lay out big money on big decisions. We are a consumer of the data produced by the Bureau of Labor Statistics, in the sense that we use it as raw material in models. For example, we use periodic U-1, U-2, etc as predictors of forward sales.

Now imagine me, telling [BIG RETAILER] to load up several millions in extra inventory in anticipation of a sales spike in three weeks because BLS says 873,000 people got jobs last month. They would laugh me out of the room before canceling our contract.

If you think there was skepticism about these numbers in the press, you should’ve heard it at my office this morning. We are treating September numbers as an aberration, as, I am sure, is anyone who has to make an actual decision off them.

If the people who have to predict what consumer spending patterns will be like this month don’t believe the numbers, with tens of millions of dollars in sales on the line, why should the rest of us?

A friend who works as a very very high-level consultant writes:

One of the things my shop does is create forecasting models for clients—major firms like [BIG RETAILER] and [BIG FOOD PRODUCER]—you know, people who have to lay out big money on big decisions. We are a consumer of the data produced by the Bureau of Labor Statistics, in the sense that we use it as raw material in models. For example, we use periodic U-1, U-2, etc as predictors of forward sales.

Now imagine me, telling [BIG RETAILER] to load up several millions in extra inventory in anticipation of a sales spike in three weeks because BLS says 873,000 people got jobs last month. They would laugh me out of the room before canceling our contract.

If you think there was skepticism about these numbers in the press, you should’ve heard it at my office this morning. We are treating September numbers as an aberration, as, I am sure, is anyone who has to make an actual decision off them.

If the people who have to predict what consumer spending patterns will be like this month don’t believe the numbers, with tens of millions of dollars in sales on the line, why should the rest of us?

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The Jobs Report—II

Something seemed awfully funny about the jobs numbers this morning and it seems I’m not the only one by a long shot who thought so. Ace of Spades for one. RDQ Economics for another. Suitably Flip for a third. The Weekly Standard for a fourth, which reported that Labor Secretary Hilda Solis, on CNBC this morning, was asked flat out if the numbers had been cooked. (Needless to say, she vigorously denied it.)

The problem is that the monthly jobs report is two separate, unintegrated reports: the payroll survey and the household survey. The latter is traditionally more volatile. The payroll survey reported the 114,000 more jobs, the household survey said total employment increased by 873,000. Both can’t be right; 873,000 would be the biggest monthly job growth in decades. Indeed, it was last reached in 1983 as the economy was rebounding sharply from the recession of 1981-82 and growing at an awesome 9.3 percent on an annual basis. The economy is growing at 1.3 percent this year.

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Something seemed awfully funny about the jobs numbers this morning and it seems I’m not the only one by a long shot who thought so. Ace of Spades for one. RDQ Economics for another. Suitably Flip for a third. The Weekly Standard for a fourth, which reported that Labor Secretary Hilda Solis, on CNBC this morning, was asked flat out if the numbers had been cooked. (Needless to say, she vigorously denied it.)

The problem is that the monthly jobs report is two separate, unintegrated reports: the payroll survey and the household survey. The latter is traditionally more volatile. The payroll survey reported the 114,000 more jobs, the household survey said total employment increased by 873,000. Both can’t be right; 873,000 would be the biggest monthly job growth in decades. Indeed, it was last reached in 1983 as the economy was rebounding sharply from the recession of 1981-82 and growing at an awesome 9.3 percent on an annual basis. The economy is growing at 1.3 percent this year.

It was the household survey that yields the unemployment number that dropped .3 percent to 7.8 percent, the lowest of the Obama presidency. Gallup did its own survey and found no change in unemployment, which remained at 8.1 in that survey.

What is unquestionable is that that headline number, 7.8 percent unemployment, is as politically convenient for the administration as it is unlikely to be accurate.

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No, the President Won’t Be Rescued by the Jobs Report

The confusing but mildly promising jobs report today—stats say an anemic 114,000 jobs were created, but the “household survey” says 873,000 more people found work this month than last—has inspired a back-and-forth frenzy since its announcement at 8:30 this morning. The political question it raises is how much good it will do Barack Obama, reeling from his awful debate performance on Wednesday night.

Two answers suggest themselves. First, it can’t hurt, but it probably won’t help; a really bad jobs report in September did little harm, so there’s scant reason to believe an OK one will turn around his suddenly declining fortunes. Second, the political problem for the president is not the tragedy of life for the unemployed, though it is the most painful fact about the lingering economic malaise. The political problem is the condition of the employed.

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The confusing but mildly promising jobs report today—stats say an anemic 114,000 jobs were created, but the “household survey” says 873,000 more people found work this month than last—has inspired a back-and-forth frenzy since its announcement at 8:30 this morning. The political question it raises is how much good it will do Barack Obama, reeling from his awful debate performance on Wednesday night.

Two answers suggest themselves. First, it can’t hurt, but it probably won’t help; a really bad jobs report in September did little harm, so there’s scant reason to believe an OK one will turn around his suddenly declining fortunes. Second, the political problem for the president is not the tragedy of life for the unemployed, though it is the most painful fact about the lingering economic malaise. The political problem is the condition of the employed.

It is the reversal of fortunes and the reversal of expectations that is primarily responsible for the 3/5ths to 2/3rds of Americans who say the country is on the wrong track. Many of those who are well-employed get fewer raises than they did, and are likely working harder because their employers have fewer people on the payroll. The ability of people to move from job to job has been hampered—as has the upward effect of such job changes on their wages. Most important, the 64 percent of American households that own their own homes has seen a 20-40 percent decline in their own wealth, as the home in question is usually their largest investment.

These are the structural obstacles placed in nearly everyone’s path by the painfully slow economy. They are the true cause of the president’s political problems. Jobs reports will only help solve that when they suggest there is a thoroughgoing recovery underway that will break the ice, melt the freeze, and allow the economy to roll once again. We are a long, long way from that.

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Obama’s Teflon Coating Will Be Tested

It is telling that our expectations are so low these days that the latest dismal jobs report issued by the U.S. Labor Department is being viewed with some relief. It noted that the economy had added 114,000 jobs in September. That is, we are told, not so bad because that is around the figure most economists projected, even though it is below the total that is generally considered the number needed to account for normal population growth. The drop in the unemployment rate to the lowest point in the Obama presidency should not deceive us, because it is clear that many people have simply given up looking for work during what is the worst economic recovery since the Great Depression. Though President Obama may choose to highlight the 24th straight month with job growth since the end of the recession he inherited from his predecessor, with 12.1 million Americans still unemployed, a drop in the number of manufacturing jobs and temporary employment, we may be closer to the next Great Recession than to genuine recovery.

This is hardly the sort of situation that would normally bode well for the re-election of any incumbent president. Yet since President Obama’s poll numbers went up rather than down after an even worse report last month, it would be foolish to assume these discoursing numbers will hurt him. Earlier this week, I referred to Obama as the real Teflon president, since neither the recent revelation about his past use of racial incitement nor the security screw up in Libya (and the subsequent lies about it from the White House) or even a bad economy seemed to be enough to dent his standing in the polls. Yet all it takes to burst a balloon is one sharp jab. After the president’s awful performance in the debate with Mitt Romney on Wednesday, it could be that Americans will start to view the president’s litany of disasters with less equanimity than before.

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It is telling that our expectations are so low these days that the latest dismal jobs report issued by the U.S. Labor Department is being viewed with some relief. It noted that the economy had added 114,000 jobs in September. That is, we are told, not so bad because that is around the figure most economists projected, even though it is below the total that is generally considered the number needed to account for normal population growth. The drop in the unemployment rate to the lowest point in the Obama presidency should not deceive us, because it is clear that many people have simply given up looking for work during what is the worst economic recovery since the Great Depression. Though President Obama may choose to highlight the 24th straight month with job growth since the end of the recession he inherited from his predecessor, with 12.1 million Americans still unemployed, a drop in the number of manufacturing jobs and temporary employment, we may be closer to the next Great Recession than to genuine recovery.

This is hardly the sort of situation that would normally bode well for the re-election of any incumbent president. Yet since President Obama’s poll numbers went up rather than down after an even worse report last month, it would be foolish to assume these discoursing numbers will hurt him. Earlier this week, I referred to Obama as the real Teflon president, since neither the recent revelation about his past use of racial incitement nor the security screw up in Libya (and the subsequent lies about it from the White House) or even a bad economy seemed to be enough to dent his standing in the polls. Yet all it takes to burst a balloon is one sharp jab. After the president’s awful performance in the debate with Mitt Romney on Wednesday, it could be that Americans will start to view the president’s litany of disasters with less equanimity than before.

One bad debate will not alter the fact that the president still appears to be able to defy the laws of political gravity. It has long been apparent that his historic status as the first African-American president and the adulation that he has received from much of the public as well as an adoring press means that the rules that constrain other politicians do not apply to him.

But the debate told us a great deal about the president. It wasn’t just that he was off his game that night, but that the contemptuous manner with which he approached the ritual of asking the people to re-elect him revealed a side of his character that some Americans had not previously noticed. He behaved as if the whole exercise was beneath his dignity and that he didn’t need to bother presenting a reasonable defense of his policies and actions. The fact that his challenger showed himself to be far more able than he had been given credit for also altered the nature of the contest.

What we will discover in the coming days and weeks is if the debate turns out to be the sharp jab that will finally start to let some of the air out of the president’s hot air balloon. If Americans begin to think a bit differently about the man they elevated to the White House in the expectation that his hope and change mantra would transform the nation, then it is possible that many of the flaws that have been either forgiven or ignored will start to impact his standing in the polls. It may be that nothing will ever really scrape the Teflon coating off of the president, in which case he will be re-elected no matter what happens to the economy–including the growing prospect of a new recession in his second term that will be difficult to blame on George W Bush. But it could also be that what happened this week is the start of a process during which the rules of political gravity will start to bring the messiah of 2008 back to earth.

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Bounce Means Uphill Battle for Romney

The Romney campaign made public a memo from their pollster intended to buck up the spirits of activists discouraged by the release of polls over the weekend that show President Obama emerging from his convention with a bounce in his ratings. Neil Newhouse, the campaign’s pollster tells them to “not get too worked up” about the latest numbers and dismisses the reaction to the conventions as a “sugar high” that changed nothing. He may be right about the bounce, as it is more than likely that the few points gained by the Democrats in the past few days will soon evaporate and that we will be looking at a statistical tossup within the week, if not sooner. But any Republican lulled by Newhouse’s “State of the Race” into thinking that everything’s still coming up roses for Romney may be in for a rude awakening in two months. The Obama bounce is an unexpected blow to the Romney campaign that makes it clear the challenger has an uphill slog until November.

Romney entered the conventions trailing the president, and even if the Obama bounce dissipates quickly, he will likely remain behind. Failing to gain ground over the last two weeks is troubling. But even more troubling is the fact that the president managed to pad his small lead even after the release of another terrible jobs report on Friday. Those numbers added considerable weight to Romney’s arguments that the president had run the economy into the ditch from which he cannot extract it. But if more Americans are swayed by a week of liberal rhetoric and the oratory of Bill Clinton to stick with the Democrats than are influenced by the collapse of the jobs market, then exactly how is Romney going to get to 50 percent plus one in 58 days?

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The Romney campaign made public a memo from their pollster intended to buck up the spirits of activists discouraged by the release of polls over the weekend that show President Obama emerging from his convention with a bounce in his ratings. Neil Newhouse, the campaign’s pollster tells them to “not get too worked up” about the latest numbers and dismisses the reaction to the conventions as a “sugar high” that changed nothing. He may be right about the bounce, as it is more than likely that the few points gained by the Democrats in the past few days will soon evaporate and that we will be looking at a statistical tossup within the week, if not sooner. But any Republican lulled by Newhouse’s “State of the Race” into thinking that everything’s still coming up roses for Romney may be in for a rude awakening in two months. The Obama bounce is an unexpected blow to the Romney campaign that makes it clear the challenger has an uphill slog until November.

Romney entered the conventions trailing the president, and even if the Obama bounce dissipates quickly, he will likely remain behind. Failing to gain ground over the last two weeks is troubling. But even more troubling is the fact that the president managed to pad his small lead even after the release of another terrible jobs report on Friday. Those numbers added considerable weight to Romney’s arguments that the president had run the economy into the ditch from which he cannot extract it. But if more Americans are swayed by a week of liberal rhetoric and the oratory of Bill Clinton to stick with the Democrats than are influenced by the collapse of the jobs market, then exactly how is Romney going to get to 50 percent plus one in 58 days?

Newhouse believes Romney’s advantage on the economy is decisive and that history and a powerful campaign machine are on his side. His argument is that simply by remaining within the margin of error along with a cash advantage and “a winning message on the economy” means Romney will be the next president. His prediction may turn out to be right; a lot can happen in eight weeks and a clear win in the debates would change the dynamic of the race. But the thing that should be scaring Republicans is their seeming inability to convert the bad economy into a clear advantage in the polls.

The Friday jobs numbers should have negated any advantage the Democrats derived from their weeklong infomercial in Charlotte. But if even the latest Rasmussen tracking poll out today (which averages three days of result) is showing Obama up by five points after being tied only a week ago, that illustrates that the Democrats’ arguments that the problems we are experiencing are not the president’s fault are being accepted by voters. Rasmussen’s analysis, like Newhouse’s memo, argues that the economy is still the key issue. Yet the results seem to be telling us that opinion about the economy is influenced more ideology and partisan preferences than it is by the objective proof of Obama’s failure. If, despite the passage of four years, they are prepared to accept the claims of Democrats that blame for the state of the country should be placed on George W. Bush instead of the incumbent, then Obama is in a stronger position that Newhouse is willing to admit.

Optimistic Democrats quoted in an analysis published yesterday by Politico claim there are simply not enough undecided voters out there, and that this means Romney will have to win the support of an unrealistically large proportion of this group in order to prevail. That may not be entirely true, but the data from the surveys of the key swing states seem to show that Romney is trailing in most of them. Something is going to have to happen in the coming weeks for Romney turn a string of close loses into wins.

If all the Democrats have done in the past few weeks is to hold their slim advantage, that is no small achievement. The longer Obama stays in front, the harder it will be for Romney to overtake him even if his edge is within the margin of error. The GOP candidate still needs to alter the dynamic of the race in order to make up that small, crucial gap with the Democrat. That is still quite possible. No one, not even the president is immune to unforeseen developments overseas or concerning the economy. But if the sort of bad economic news we got last week isn’t enough to shake wavering voters into backing Romney, then it’s difficult to imagine what will.

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Re: The Jobs Numbers

The White House spins today’s grim August jobs report (which John Steele Gordon details below), calling it “further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression”:

While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007. To create more jobs in particularly hard-hit sectors, President Obama continues to support the elements of the American Jobs Act that have not yet passed, including further investment in infrastructure to rebuild our Nation’s ports, roads and highways, and assistance to State and local governments to prevent layoffs and to enable them to rehire hundreds of thousands of teachers and first responders. To build on the progress of the last few years, President Obama has also proposed an extension of middle class tax cuts that would prevent the typical middle class family from facing a $2,200 tax increase next year.

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The White House spins today’s grim August jobs report (which John Steele Gordon details below), calling it “further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression”:

While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007. To create more jobs in particularly hard-hit sectors, President Obama continues to support the elements of the American Jobs Act that have not yet passed, including further investment in infrastructure to rebuild our Nation’s ports, roads and highways, and assistance to State and local governments to prevent layoffs and to enable them to rehire hundreds of thousands of teachers and first responders. To build on the progress of the last few years, President Obama has also proposed an extension of middle class tax cuts that would prevent the typical middle class family from facing a $2,200 tax increase next year.

At the AEI blog, James Pethokoukis cites a far less optimistic take from Citigroup:

The unemployment rate dropped to 8.1% from 8.3%, but in this case with declines in both the labor force (-368,000) and the household-survey measure of employment (-119,000). With labor force participation falling back to a new cycle low of 63.5%, the drop in the unemployment rate should not be reported as good news.

Pethokoukis adds:

This was not the employment report either American workers or the Obama campaign were hoping for. A huge miss. It shows the U.S. labor market remains in a deep depression, generating few jobs and little if no income growth.

No amount of spin from the White House or Obama campaign can put a happy face on these numbers. While the unemployment rate dipped from 8.3 percent in July to 8.1 percent, Pethokoukis notes that the unemployment rate would actually be 8.4 percent if workforce participation had remained steady from July. The fact that many unemployed Americans have given up looking for jobs over the past month is obviously a distressing sign, even though it may have made the unemployment rate look modestly better on the surface.

Meanwhile, the Romney campaign jumped on the numbers this morning to contrast them with the positive recovery rhetoric from the Democratic National Convention: “If last night was the party, this morning is the hangover.”

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Jobs and the Election

There’s something for everyone in this morning’s jobs report.

Democrats will point to the reported 163,000 new jobs last month, double June’s dismal 80,000 (which was revised downward today to an even more dismal 64,000).  For the first time in quite awhile this was above economists’ estimates (they were predicting 95,000 new nonfarm jobs).

Republicans will point to the fact that the unemployment rate ticked up to 8.3 percent from 8.2. That’s the worst since February. The unemployment rate has been above 8 percent for 41 straight months now. The broader measure of unemployment, which includes part timers who would rather be working full time, also increased from 14.9 percent to 15 percent, a really bad number.

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There’s something for everyone in this morning’s jobs report.

Democrats will point to the reported 163,000 new jobs last month, double June’s dismal 80,000 (which was revised downward today to an even more dismal 64,000).  For the first time in quite awhile this was above economists’ estimates (they were predicting 95,000 new nonfarm jobs).

Republicans will point to the fact that the unemployment rate ticked up to 8.3 percent from 8.2. That’s the worst since February. The unemployment rate has been above 8 percent for 41 straight months now. The broader measure of unemployment, which includes part timers who would rather be working full time, also increased from 14.9 percent to 15 percent, a really bad number.

It should be pointed out that these numbers are not raw, they are adjusted to be, hopefully, consistent over time. But that, of course, adds a human element to the numbers, for these adjustments are the product of judgments, guesses, estimates, and, perhaps, unconscious prejudice. There are some who have serious questions regarding the adjustments made to this month’s figures.

Even if the economy now continues to create jobs at the rate of 163,000 a month, that’s not nearly enough to bring down the unemployment rate.  Indeed, if things start to pick up, discouraged workers not now counted might begin to search for jobs again and send the unemployment rate up, not down.  It is already half a percentage point above the highest figure any president since Roosevelt has survived to be re-elected.

There will be three more jobs reports before the election (on September 7, October 5, and November 2). That last one will be on the Friday before the election day.  If it’s a really bad one or a really good one, it could make the difference provided the election is still close. The Friday before election day is considered the best day to drop a bombshell, as the opposition has little time to effectively respond. It was on that day in 2000 that the Al Gore campaign released information, which it had known for months, on George W. Bush’s long-ago DUI incident.

And it was on the Friday before the 1992 election that—in one of the most disgraceful acts in the history of American justice—Lawrence Walsh, special prosecutor in the Iran-Contra scandal, re-indicted  former defense secretary Casper Weinberger and directly implicated President Bush in the indictment although that was totally irrelevant to the indictment itself. The indictment was later dismissed on statute-of-limitations grounds (and Bush gave Weinberger a full pardon to prevent any further shenanigans from Walsh). Even Lanny Davis, later special counsel to President Clinton called the action, “bizarre.”

The first President Bush was already toast at that point. But the DUI report in 2000 might well have turned what would have been a close but clear election into the hanging-chads constitutional nightmare that the 2000 election became.

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