If The Labor Force Was The Same Size As When Obama Took Office Unemployment Would Be 10.7%
Only in Obama’s economy could a 7.6% unemployment rate in the September before an election be called a positive sign.
Yes the U-3 unemployment rate number is down under 8%, and President Obama and his apologists are going to crow about that because that’s the number the American public is most familiar with. Because that’s the number the media focuses on, but for a lot of reasons the September jobs report wasn’t a good one for America.
“If the labor force participation rate was the same as when President Obama took office, the unemployment rate would be 10.7%,” writes Jim Pethokoukis. “If the participation rate had just stayed steady since the start of the year, the unemployment rate would be 8.4% vs. 8.3%.”
More, via Pethokoukis, from RDQ Economics:
Such a rapid decline in the unemployment rate would be consistent with 4%–5% real economic growth historically but much of the decline is accounted for by people dropping out of the labor force (over the last year the employment-population ratio has risen to only 58.7% from 58.4%). We believe part of the drop in the unemployment rate over the last two months is a statistical quirk (the household data show an increase in employment of 873,000 in September, which is completely implausible and likely a result of sampling volatility). Moreover, declining labor force participation over the last year (resulting in 1.1 million people disappearing from the labor force) accounts for much of the rest of the decline.
Keep in mind that our labor pool is shrinking in the context of our overall population getting larger. That’s why, in order to just maintain an unemployment rate, the national economy must add hundreds of thousands of jobs each month. If those jobs aren’t created, and the population gets larger, we go backwards on the unemployment rate. Excerpt for the quirk in the unemployment rate which doesn’t count Americans who have given up looking for jobs.
And there are a lot of those people in Obama’s economy.
Here’s the employment to population ratio, showing how many people have jobs in the context of overall population. As you can see, it fell off a cliff under President Obama and hasn’t yet recovered:
Meanwhile, here’s the “hell chart” from the original pitch for Obama’s stimulus spending program. The Obama administration projected unemployment both with and without the stimulus spending. The red dots are what the unemployment rate has actually been.
That is a picture of failed policy.Tags: Barack Obama, Economy, jobs