It is natural for politicians to put things in the most
favorable light, and the worse the general situation, the greater the need to
do so. That serves as an appropriate introduction to the White House’s June
economic analysis, which is summarized thusly: “The economy added 287,000 jobs in June, as labor force
participation rose and the broadest measure of labor market slack fell.” As far
as that statement goes, it is true.
That
new jobs number is a decent number – the best jobs figure since October – and
miles ahead of May’s revised number of only 11,000 new jobs. But it is not an
outstanding number, and is only one of several really significant numbers.
Back
in December 2009, six months after the end of the recession and 11 months into
Barack Obama’s first term, economist Paul Krugman said that 300,000 new jobs
each month were necessary to make up the job losses of the recession over the
next five years, so the June figure falls short of that number. In the weak
Obama recovery new job production has only met or exceeded 300,000 six times in
89 months. The last was in November of 2014 at 331,000.
Whether
the 287,000 number holds up after revision we won’t know until August. May’s
preliminary number was revised down by more than two-thirds to a mere 11,000;
therefore August may show a downward revision, an upward revision, or a number
that is pretty close to the preliminary figure.
Other relevant numbers from the Bureau of Labor Statistics
(BLS) data set for June include an increase in the U-3 unemployment rate, the
one President Obama prefers to cite, from 4.7 to 4.9 percent. Despite the
increase, the U-3 rate still looks good because it discounts all those
marginally attached to the labor force that involuntarily work part-time
instead of full-time, or have given up looking for work because they cannot
find a job. Those workers are included in the U-6 rate, which more accurately
represents reality, and stood at 9.6 percent in June, and improved one-tenth of
a percent since May, as some of the previously disaffected workers started
seeking employment again.
Even so, the Labor Force Participation rate was still at the
late-70s level of 62.7 percent. From 66.0 percent in December of 2007 when the
recession began, the trend in the participation rate has been steadily downward
and has been below 63 percent since March of 2014. The labor force is made up
of those age 16 and older that are working, looking for a job, and not in prison or in the
military, and totaled 94,517,000 people last month. That means that 56,228,000
working age Americans are not working, and not in the military or in prison.
In June, 1.8 million persons were marginally attached to the
labor force. These are individuals who wanted to work, were available for work,
and had looked for a job sometime in the prior 12 months, but were not counted
as unemployed because they had not searched for work in the 4 weeks preceding
the survey.
Another 5.8 million individuals prefer full-time employment,
but are working part time because their hours had been cut back or because they
haven’t been able to find a full-time job.
The BLS reported, “Among the major worker groups, the
unemployment rates [U-3] for adult women (4.5 percent) and Whites (4.4 percent)
rose in June. The rates for adult men (4.5 percent), teenagers (16.0 percent),
Blacks (8.6 percent), Asians (3.5 percent), and Hispanics (5.8 percent) showed little or no change.”
The 9.6 percent U-6 rate tells one part of the story, but
the actual harm of the administration’s policies that keep the economy from
cranking up are another story.
“Today’s jobs number can’t hide the ongoing struggles facing
the country’s main jobs producers – small businesses – which are
overwhelmed by over-taxation, over-regulation, and a lack of access to credit,”
said Jobs Creators Network (JCN) president Alfredo Ortiz. “And
it shouldn’t distract us from an underwhelming labor force
participation rate—still the lowest figure since the 1970s.”
National Federation of Independent Business president and
CEO Juanita Duggan commented, “Each month our survey shows that small business
owners are trying to hire qualified workers,” and, “The job openings are there,
but owners are not going to invest in new employment when labor costs are
becoming insurmountable, and the political climate is wildly uncertain.”
All the way back in November of 2010 President Obama was
already claiming a “new normal” for the economy: “What is a danger is that we stay stuck in a new normal
where unemployment rates stay high,” he said on CBS “60 Minutes.”
Today,
with a real unemployment close to 10 percent, Obama may be viewed as a pretty
good prophet. However, rather than seeing the future, he engineered it, and the
term “new normal” is much less a reality than an excuse. As the JCN’s Ortiz
noted, high taxes, rampant and intrusive regulation and limited credit do not a
good recovery make.
America deserves better. November’s election provides the
opportunity to elect as president someone who understands job creation.
Cross-posted from Observations
Cross-posted from Observations
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