Obama’s Real Unemployment Rate Is 14.7%, And A Recession’s On The Way
The Bureau of Labor Statistics (BLS) reported last Friday that 114,000 new jobs were created last month, according to its Establishment Survey of business payrolls that has been emphasized by the Obama Administration. That is pitifully weak, especially for what is supposed to be the fourth year of a recovery (the National Bureau of Economic Research scored the recession as officially over in June, 2009).
As economist John Lott noted at FoxNews.com on October 5, the working age population grew by 206,000 last month. With two-thirds of those working as would be expected during a normal recovery, 138,000 new jobs would have been necessary in September just to keep pace with population growth.
Indeed, the working age population has increased by 8.4 million since President Obama entered office. With the same labor force participation as on Inauguration Day in January, 2009 (which would be closer to a real recovery), that would require 5.5 million new jobs just to keep up with the aforementioned population growth. But a generous reading of the data is that during President Obama’s entire term in office, a grand total of only 787,000 jobs have been created overall on net. And all of that net growth came in the last month. As of August, 2012, the economy was still suffering a net loss of jobs during Obama’s entire Presidency up to that point.
Moreover, the BLS also reported on Friday that the number of full time jobs declined by 216,000 last month, as Lott also noted. The unemployment rate declined to 7.8% only because of a reported surprise September spurt of 873,000 jobs in the separate Household Survey of families across the nation. That reported increase is anomalous for the reasons discussed below.
But even the actually story the BLS is telling is not good. In addition to all of the above, the supposed September increase in Household Survey jobs was mostly in what the BLS calls part time work for economic reasons. The BLS explains, “These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.” That applied to 582,000 of the supposed new jobs reported by the September Household Survey, and a total of 8.6 million Americans last month.
As the Wall Street Journal editorialized last weekend,
“Working part time is certainly preferable to not working at all, but it’s tough to pay the mortgage, energy, medical and grocery bills with a 20-hour-a-week job. The job market has been bad for so long that people are settling for any paycheck they can get. One suspect in this shift to part-time work is the cost of providing health insurance, especially with ObamaCare looming.”
The BLS reported 12.1 million still unemployed in September, another 8.6 million employed part-time for economic reasons, and another 2.5 million marginally attached to the labor force. The latter “were not counted as unemployed because they had not searched for work in the 4 weeks preceding the [September] survey,” even though they “wanted and were available for work,” according to the BLS.
All of these are counted in the U6 unemployment rate as also reported by the BLS. Because the primary change during the month was that 582,000 on net shifted from unemployed to employed part time for economic reasons, this U6 unemployment rate remained unchanged last month at 14.7%. The total suffering this U6 unemployment was 23.2 million.
Moreover, even this doesn’t nearly fully account for the 8.2 million Americans who have given up hope during the Obama term of office, and dropped out of the work force altogether. When you are considered out of the work force, you are no longer counted as unemployed, even though you still do not have a job, and you still want and are available for work.
The U6 unemployment rate counts only 2.5 million of those 8.2 million who have given up hope and dropped out during the Obama years. The ShadowStats website, which counts the long term discouraged workers the government doesn’t count, reports the total rate for the unemployed and underemployed (part time for economic reasons) as 22.8%.
Of the 12.1 million the government does count as unemployed, a record 40.1% are long term unemployed for more than 6 months. Despite the President’s rhetoric on the campaign trail about manufacturing coming back under his policies, manufacturing jobs declined by another 16,000 last month, making a total decline of 38,000 in the last two months.