The 2010 jobs outlook

KeithHennessey.com Blog ^ | 8/27/09 | Keith Hennessey

[PhxRising]

I want to continue to focus on the new economic projections from OMB and CBO. Here is some basic background:

- The unemployment rate in July was 9.4%. - Most economists consider “full employment” to be in the 4.5% – 5.5% range. - There are now about 154 m people in the workforce, so each tenth of a percentage point on the unemployment rate is about 150,000 people. - This means July’s 9.4% unemployment rate translates into about 14.5 m people who want work but don’t have it. - Rule of thumb: Because the labor force grows over time, the U.S. economy needs to create about 100K – 150K net new jobs each month for the unemployment rate to stay constant. For the unemployment rate to decline you need to exceed that range. - The U.S. economy lost 247,000 jobs in July.

There seems to be a disconnect between the President’s language, which is raising expectations that things will get better in the near future, and his Administration’s economic projections.

If these projections are realized I imagine they will affect significantly the 2010 election. If the unemployment rate is in the 9.5% – 10% range on Election Day, and if it is declining as slowly as the Administration projects, there could be a big effect in the voting booth.

[PhxRising]

These is a disconnect between what President Obama is saying and what the President's Office of Management and Budget regarding unemployment.

Originally, OMB said that the CBO was being too pessimistic regarding the economy. But now that the OMB has had months to study the economic data, they have concluded that the CBO was right and that unemployment is going above 10%.

So much for any economic stimuls from the stimulus bill.

[givemELL]

Part-time employees and employees, unemployed, who have STOPPED looking for a job are not included in the figures, and, a couple of recent articles have thus estimated REAL unemployment ralisitically closer to about 16%. So, if one multiplies 1.5 million unemployed as 1% of the total referred to in the above piece, one comes up with a conceptual 24 million unemployed in possible actuality. IF so, even that is going to go higher.

[Recovering_Democrat]