The Real Jobs Report: March 2013
Its that time of the month again. The BLS Friday released its eagerly anticipated jobs report summarizing last month’s job activity.
It was schizophrenic ugly.
After a good February report there were only +88,000 jobs created last month. That is less than population growth, yet the unemployment rate pleasantly dropped from 7.7% to 7.6%.
That, though, is very bad!
The only way it can happen is if people drop out of the workforce. Sure enough, the labor participation rate dropped two ticks to 63.3%, its lowest since May of 1979!
It’s a nasty trend still lingering from 2008’s Great Recession. Its this month’s real news.
Bad News in Perspective
Investor’s Business Daily on Friday plotted the “true” unemployment rate vs. the “official” unemployment rate together on the same chart.
Both come from BLS monthly jobs report data.
The “official” unemployment rate of 7.6% includes just the people in the workforce who are actively seeking employment.
The “true” unemployment rate of 11.1% includes all working-age Americans who used to be in the workforce, but gave up and stopped looking for work.
The “true” unemployment rate ticked up last month.
What sticks out like a sore thumb is that the “official” rate has nicely declined since 2010, but the “true” rate has remained steady. That means that all the hyped decline in the “official” unemployment rate since 2010 came from people dropping out of the workforce.
That is not good at all.
Under President Obama, the labor participation rate has declined from 65.7% to 63.3%, lowest since 1979. If that rate had not declined there would be 3.7 million more Americans working today and the unemployment rate would still be the very same 7.6%!
3.7 million American workers have given up looking for work. That washes over a civilian working age population growth of 10.2 million in the same time frame.
That is the sobering message in this month’s jobs report.
Investor’s Business Daily is right. The “true” unemployment rate is 11.1%.
Alan Krueger, President Oblama’s Chairman of the Council of Economic Advisers, summarized his description of last month’s economy with his usual “While more work remains to be done… the U.S. economy is continuing to recover from the worst downturn since the Great Depression”.
You’d think he’d tire of repeating that same trite 4-year old mantra.
Krueger, this Administration and Congress are clueless what is wrong with the economy and how to fix it. Instead, they argue over gay marriage, immigration and gun control.
They still believe ARRA largely fixed the economy and refuse to think otherwise. That prevents them from designing serious solutions for a serious problem.
Unless that attitude changes, the economy won’t get better until there is a new occupant in the White House.