Skip to comments.Friday's Unemployment: "Good" Only By "New Normal" Standards
Posted on 01/07/2013 6:55:16 AM PST by SeekAndFind
The publication of Friday's "Employment Situation" report from the Bureau of Labor Statistics (BLS) gives us our first opportunity to take stock of the first four years of Barack Obama's presidency. This is because the jobs numbers are the first of the major economic data series to be reported after the end of a period.
The jobs numbers are especially illuminating, because the impacts of changes in government policies show up first and fastest in total employment. By way of illustration, total employment peaked in November 2007, but it took until December 2008 for the National Bureau of Economic Research to declare that a recession had begun in December 2007.
Total employment is also the most sensitive indicator of the state of the economy. During the most recent recession, real GDP declined by 4.6% from its peak in 2Q2008 to its trough in 2Q2009. However, the peak-to-trough fall in total employment caused by this recession was 5.9%. And, while 4Q2012 real GDP will probably come in at 3.1% above its previous peak, total employment in December was still 2.2% below its earlier high.
There were 3.3 million fewer Americans working last month than there were back in November 2007, which was more than five years ago. In the interim, America's working age population grew by 11.4 million.
So, how were the December employment numbers? Terrible. December was an awful month, capping a horrendous first Obama term in office. The current jobs situation could only be seen "good", or even "OK", by someone drunk on Obama's "new normal".
December, America's working-age population went up 176,000. On the margin, only 15.9% of these people found jobs. For Obama's first term as a whole, our adult population increased by 9.3 million, and (incrementally) not one of these new potential workers found a job.
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COMPARING THE JOB SITUATION BETWEEN THE OBAMA, BUSH AND CLINTON ADMINISTRATIONS, WE HAVE:
During the last month of Bush 43’s second term (when the mortgage crisis was at its PEAK), the unemployment rate was 7.3%. In December 2012, adjusted to the same labor force participation rate (65.8%), the unemployment rate was 10.9%
The reason that last month’s “headline” unemployment number was reported at 7.8% was because of an unprecedented exodus from the labor force under Obama. During the past four years, labor force participation declined from 65.8% to 63.6%. This represents 5.3 million Americans giving up on looking for work.
The “SGS Alternate” unemployment rate published by Shadow Government Statistics is the broadest measure of unemployment/underemployment. Over the past four years, this increased from 17.6% to 23.0%, bringing it to its all-time high. When Bill Clinton left office, the SGS Alternate unemployment rate was 10.5%.
Speaking of Bill Clinton, the reason that he is held in such high esteem today is that he guided the nation to effective full employment (an employment-to-population ratio of 64.7%, achieved in April 2000). If full employment is the goal, the U.S. moved 5.9 million jobs farther away from it during the past four years.
Saul Alinski ( Rules for Radicals ) refers to the middle class as the enemy. The middle class has the numbers, the votes, and the political cash. In order to eliminate them as a threat, they had to be absorbed by the lower class in order to use them politically, and the only way to do that was impoverish them, too.