Commentary Magazine


Topic: unemployment rate

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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A Very Ugly Jobs Report

I wanted to add to John’s fine summary of today’s jobs report.

It really is a very ugly set of data.

It’s not simply that unemployment has been above 8 percent for a record 39 months, which is bad enough. While news stories report that 115,000 new jobs were added in April, the true picture is much worse. More than 340,000 Americans dropped out of the labor force last month. The total employment level for April fell 169,000. Ezra Klein of the Washington Post, who is hardly a conservative and has been quite sympathetic to President Obama, admits that unemployment “went down for the wrong reason: people dropping out of the labor force.”

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I wanted to add to John’s fine summary of today’s jobs report.

It really is a very ugly set of data.

It’s not simply that unemployment has been above 8 percent for a record 39 months, which is bad enough. While news stories report that 115,000 new jobs were added in April, the true picture is much worse. More than 340,000 Americans dropped out of the labor force last month. The total employment level for April fell 169,000. Ezra Klein of the Washington Post, who is hardly a conservative and has been quite sympathetic to President Obama, admits that unemployment “went down for the wrong reason: people dropping out of the labor force.”

He’s quite right. The labor force participation rate (64.3 percent) reached its lowest level in more than 30 years, while the employment-population ratio (58.4 percent) is lower still.

According to Jim Pethokoukis of the American Enterprise Institute, if labor force participation had stayed the same in April as it was in March, the unemployment rate would have risen by three-tenths of a percent (to 8.4 percent). And if the labor force participation rate today was what it was when Obama took office, the unemployment rate would be roughly 11 percent. The real unemployment rate, including those who are working part-time due to economic reasons, now clocks in at nearly 15 percent (14.5).

“In the weakest recovery since the Great Depression, more than four-fifths of the reduction in unemployment has been accomplished by a dropping adult labor force participation rate — essentially persuading adults they don’t need a job, or the job they could find is not worth having,” according to University of Maryland economist Peter Morici.

Any way you slice it, last month’s jobs report is dispiriting. The unemployment rate, which is already at historically high levels, is being kept artificially low because of growing despair and hopelessness. The will and energy of many Americans is being ground to dust.

We know what Obama sounded like in theory (hope, change, unity, prosperity). Now we know what Obamaism looks like in practice. It isn’t a pretty sight. And I’m afraid the president is affirming the observation of Camus, which is that destruction is an easier, speedier process than reconstruction. But at least let the reconstruction begin.

The prerequisite for that to occur, it seems, is for Obama to be a one-term president.

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Romney Blasts Obama Economy in Ohio

In an open letter to President Obama in the Cleveland Plain Dealer, Mitt Romney doesn’t hold back:

Mr. President, forgive me for being blunt, but when it comes to economic affairs, you’re out of your depth. Unlike you, I am not a career politician. Unlike you, I’ve spent more than two decades working in the private sector, starting new businesses and turning around failing ones. Undoing the damage you’ve done will be a daunting challenge. But I’ve learned a thing or two about how government policies can kill private investment and stifle job creation and I have a plan to get government out of the way.

Mr. President, while campaigning for the presidency nearly four years ago, you declared that you were “absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal.”

Mr. President, the American people are tired of the grandiose promises. And they are even more tired of the paltry results.

Some conservatives are critical of this “Obama’s a nice guy, but out of his element” message that Romney’s been pushing, and they do raise valid issues. But the fact is a lot of the voters Romney’s trying to reach out to do think Obama’s a nice guy, regardless of whether he is or not. If Romney starts attacking Obama as a person, these voters may just tune out.

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In an open letter to President Obama in the Cleveland Plain Dealer, Mitt Romney doesn’t hold back:

Mr. President, forgive me for being blunt, but when it comes to economic affairs, you’re out of your depth. Unlike you, I am not a career politician. Unlike you, I’ve spent more than two decades working in the private sector, starting new businesses and turning around failing ones. Undoing the damage you’ve done will be a daunting challenge. But I’ve learned a thing or two about how government policies can kill private investment and stifle job creation and I have a plan to get government out of the way.

Mr. President, while campaigning for the presidency nearly four years ago, you declared that you were “absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal.”

Mr. President, the American people are tired of the grandiose promises. And they are even more tired of the paltry results.

Some conservatives are critical of this “Obama’s a nice guy, but out of his element” message that Romney’s been pushing, and they do raise valid issues. But the fact is a lot of the voters Romney’s trying to reach out to do think Obama’s a nice guy, regardless of whether he is or not. If Romney starts attacking Obama as a person, these voters may just tune out.

As his column shows, there are ways to forcefully attack the president’s record without getting personal. It was also well timed to combat the spin from the White House over the jobs numbers out today. The unemployment rate dropped slightly last month to 8.1 percent, but as John Steele Gordon wrote earlier today, that’s because Americans are giving up on looking for employment. Jim Pethokoukis calculates that if the workforce participation rate stayed the same as it was when President Obama was elected, the current unemployment rate would be 11.1 percent. The White House is counting on the falling official unemployment rate to reassure the public that its policies are working, but as conservatives have pointed out today, this number alone tells us little about the current health of the economy.

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