Today’s Employment Situation
First of all, let’s compare the current situation with employment with what the Obama Adnministration told us would happen if we didn’t pass the stimulus package. As has been obvious for some time now the stimulus is not–as we repeatedly predicted–substantially impacting the employment situation.
Unemployment: Promised v. Actual
Instead, employment has risen by more than 3%.
Now, today’s surprise was not that there were a net 467,000 jobs lost last month, but that the employment rate went up by only 0.1%. The answer to that mystery is found in the employment data from the BLS, which shows that the civilian labor force declined by 358,000 people last month.
The Bureau of labor Statistics uses a neat bit of sleight-of-hand when calculating the unemployment rate. If you are not in the workforce, you aren’t counted as unemployed. You disappear from the numbers.
There are a number of ways to leave the labor force. You can retire. You can become injured or disabled. Or, you can simply become so discouraged that you stop looking for a job.
For the latter category, that means you may still not have enough money to house and clothe your family. and you might still really want to work. But there are no jobs for you, and if you stop actively looking for work, then you drop out of the labor force.
Granted, there’s no other way to really count the labor force, but this does help explain why the employment rate remained much more restrained vis a vis the actual number of net job losses. The number of people not in the labor force increased from 80,371,000 in May to 80,729,000 in June. That nearly equals the number of job losses, so the unemployment rate comes out nearly even.
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Sort of makes one long for the days of “The Worst Economy Since the Great Depression”(TM), as democrats liked to call it when Bush was in office. You know: when unemployment was around a whopping 6%? Along those lines, where is the “Misery Index” that democrats also liked to use to “prove” how bad things were?
The difference in MiniTru coverage between then and now is both striking and nauseating. With unemployment heading for double digits and the debt heading for the Moon, MiniTru does its level best to put a good spin on bad news. “Unemployment is up but the worst may be behind us” seems to be the meme. Not so when Bush was in office, when an 0.1% increase in unemployment was treated as clear, unarguable evidence that economic doomsday was upon us.
Sigh…
Remember the “Mission Accomplished” sign which was twisted in meaning and then harped on constantly by the Left? This graph should become our equivalent, seen in ads and on bumper stickers. It is easy to grasp, and has the benefit, rare, in politics, of also being an accurate depiction.
I am self-employed in the real estate business. My business is dead at the moment. I am effectively unemployed, yet I never show up in the unemployment figures, nor can I get get unemployment benefits. I am in the workforce, but I am also “invisible”. There are millions more like me out there. I think the unemployment figure is way above 10% already. I’m thinking 18-19%.
Actually the package might yet have a stimulative effect because most of the spending has not yet happened. The big problem is that since it is designed (and they did this on purpose) to give most of its stimulus in 2010, By that time we will be reeling from renewed inflation and especially higher energy and commodity prices. So it’s going to be pretty bad any way you shake it.