September jobs report: You should know the drill by now
By: John Hayward
10/3/2014 10:56 AM
The U.S. unemployment rate plunged in April to its lowest level since September 2008 as employers added 288,000 jobs, the most in two years. The figures are a clear sign that the economy is picking up after a brutal...
US Gains 288k Jobs; Jobless Rate Falls To 6.3 Pct.
The September jobs report is essentially the same thing we’ve grown accustomed to in this New Normal of reduced expectations: there was modest job growth, but a lot of it was part-time and temporary work, and more people dropped out of the workforce entirely, perversely bringing the “headline” unemployment rate down. Thus, if you’re looking for good news – say, if you’re an endangered Democrat or the media who love them - you can trumpet that “the nation’s unemployment rate fell below 6% in September for the first time in six years,” as CNN does…
The rate came in at 5.9%, while employers added 248,000 jobs last month.
The unemployment rate fell last month because more people were getting jobs, not because they were dropping out of the labor force as they have at times during the economic recovery. The share of people in the workforce was essentially unchanged.
Jobs growth was strong in professional and business services, particularly in employment services and consulting. The retail and health care sectors, which have been a powerhouse throughout the recovery, also gained. Construction added 16,000 jobs.
… or you can point out that a disturbing amount of this “improvement” is coming from people dropping out of the workforce, as, er, CNN also does…
Friday’s report is the final one before the mid-term elections on Nov. 4. President Obama touted the strength of the economy recovery in a speech in Chicago Thursday, though he noted that most of the gains are going to the wealthy.
The president’s critics, however, say the unemployment rate is declining because people are getting discourage and dropping out of the workforce entirely when they can’t find jobs. The share of Americans participating in the labor force is now at its lowest point since 1978, at 62.7%.
The “drop out” factor has been a problem during the recovery, but the recent decrease in the unemployment rate, which stood at 7.2% a year ago, is due more to Americans landing jobs than giving up. Employers have added 2.6 million people to their payrolls since last September.
Those are three more paragraphs from the same report, folks! The new unemployment report is super awesome news because people are getting jobs instead of dropping out of the workforce – and oh, by the way, the workforce “is now at its lowest point since 1978.” You kids may not remember how prosperous America was in 1978, but take it from your aging correspondent, the economy was all we could talk about back then.
If you’re scratching your head about the seeming contradiction between CNN’s two comments on the size of the workforce, it may help to understand that the first is either a mistake or a deliberate misrepresentation by the network – the workforce did indeed contract again in September 2014. A skeptic might say flat wage growth, a moribund workforce, and the replacement of full-time career positions with part-time work is more important than the success of a dwindling number of “employables” enjoying marginally greater success at finding new jobs within six months of leaving, or losing, their old ones. Such skeptics can be found at ZeroHedge:
While by now everyone should know the answer, for those curious why the US unemployment rate just slid once more to a meager 5.9%, the lowest print since the summer of 2008, the answer is the same one we have shown every month since 2010: the collapse in the labor force participation rate, which in September slid from an already three decade low 62.8% to 62.7% – the lowest in over 36 years, matching the February 1978 lows. And while according to the Household Survey, 232,000 people found jobs, what is more disturbing is that the people not in the labor force, rose to a new record high, increasing by 315,000 to 92.6 million!
(Emphasis in the original.) They even drew some pictures, for the benefit of anyone from CNN still confused about how this “workforce contraction” thing works:
workforce_charts_sep14
Granted, there have been far more delusional efforts by the Obama-media complex to portray job reports in far more flattering lights than they deserve. With an election right around the corner, and job-creation numbers well above the minimal level needed to keep pace with population growth, you won’t hear any of the usual White House boilerplate warnings not to “read too much into any single jobs report.” No, you’ll be heartily encouraged to read too much into the good bits of this one, while ignoring all that gloomy stuff about flat wages and workforce dropouts. James Pethokoukis at AEI sums it up well:
The headline numbers are pretty good. The US economy generated 248,000 net new jobs last month, according to the Labor Department, while July and August added a combined 68,000 more than first thought. And the official unemployment rate fell to 5.9% from 6.1%, hitting the lowest level since July 2008. The jobless number is now just 0.4 percentage points above what the Federal Reserve considers “full employment.”
But many American workers probably aren’t celebrating when they look at their paychecks. Average hourly earnings were flat last month. And as economist Robert Brusca points out, “They are up at a 1.8% annual rate over three months and just a 2.3% annual rate over 12 months. Average hourly earnings are accelerating only slightly more than one year ago when they were going up by 2.2% year-over-year.” Once you subtract inflation, wages are pretty much flat.
After considering input from some other analysts, Pethokoukis concludes:
To me, this data continues to suggest the US economy might be moving further into a automation-driven, “average is over” scenario where the labor market is bifurcated between high-skill, high-wage jobs and low-skill, low-wage jobs — with the latter seeing little wage growth despite GDP growth. And less work — full-time or part-time — in the economy overall.
Which brings me back to some especially amusing political spin in that CNN article: “President Obama touted the strength of the economy recovery in a speech in Chicago Thursday, though he noted that most of the gains are going to the wealthy.” In other words, he wants to selectively take credit for anything remotely positive he can pick out in the economy, and since just about the only good news is coming to people with very high incomes or asset wealth, he simultaneously whines and moans about “inequality.”
Question: why would anyone in the middle class with a lick of common sense want to be caught in this perpetual-motion machine of socialist politics? Obama’s policies are killing you, middle-class taxpayer, but they’re exacerbating the very same class divide his ideology milks for power. He’s created an environment where the rich get richer, while the poor slip out of workforce and tumble into long-term government dependency, and the middle class is weakened so much that they need welfare handouts – such as those court-challenged ObamaCare subsidies – to make ends meet. Then he sells himself as the solution to the very problems he’s created – but of course he’ll need even more money and power to impose those “solutions.”
It’s a fantastic racket, but why are there still any suckers willing to fall for it? Is this anemic “recovery” what you thought you’d be getting when Obama grabbed the better part of a trillion dollars for his “stimulus” plan? (You’re not supposed to remember that he explicitly promised far, far better results.) Was debatably positive job creation, plus continuing workforce decline, worth nearly doubling the national debt over the course of a single presidency? Does anyone seriously think Obama would have won in either 2008 or 2012 if the September 2014 unemployment report slipped through a time warp into the hands of voters?
Not only is this recovery less than America deserves, and less than it’s capable of, but the transition Pethokoukis describes is unsustainable. Those welfare benefits can’t keep rolling forever. They are adding to fiscal pressures that will eventually force the kind of tax increases that will snuff out even this flickering candle of “recovery.” Our economy is not strong enough to withstand any significant external pressure – what do you suppose the trillion dollars of damage from something like the 9/11 attacks would do to this economy? Most of the healthy growth we’ve seen comes from sectors Obama’s ideology despises, notably including the planet-raping energy sector, which he and his party would strangle if they could. A “bifurcated” economy with gloomy lower reaches will dissolve into chaos if Obama writes amnesty orders that dump five or ten million new low-skill workers into it. Not only can we do better than what Obama has managed, we must, because we’re barely treading water in relatively calm seas, and stormy weather will inevitably fall upon us… probably sooner rather than later.
http://humanevents.com/2014/10/03/september-jobs-report-you-should-know-the-drill-by-now/
