While Democrats might crow about Friday’s unemployment number dipping to 8.1%, economists have been looking at all the numbers and find distressing news.
Just 96,000 jobs were added, but the labor participation rate among men is the lowest that it has been since 1948, when records began. For young people it’s more like 16.7% and for women, they’ve had the biggest drop in labor participation at 57.6%. The only time it’s been lower was 1991.
June’s number was revised downward 19,000 to put that month’s new jobs creation at only 45,000. Meanwhile, food stamp usage added 173,612. That means that four times as many people got government help as went out and got a job. Terrible!
Some good summaries require attention:
Jim Lacamp, Macroportfolio advisor, was on Your World with Neil Cavuto and said,
“These numbers were awful, when you break down these numbers not only was the number itself bad, but most of the number was fabricated. This is the birth/death model that they use to assume that a number of business got started. 83,000 of the 96,000 jobs they say that we got were from the birth/death model. So there’s statistical engineering.
“Not only that, they revised the jobs numbers down the previous two months. So this recovery is just not there. Furthermore when you look at what jobs made up the jobs growth for the month, you’re looking at restaurant and bar jobs. Those are about the lowest paid jobs you can go out and get. So we’re not seeing recovery at all. A lot of people say the housing market is recovering, but what about the construction jobs? We’re not seeing them.
“This, unfortunately puts us very close to what we call stall speed in the economy and stall speed has always led to recession.
“It might be the 30th month of jobs growth but you have to grow a lot more than this to bring down the unemployment rate.
“Manufacturing really led this recovery. Corporate profits were also a bright spot. Now we’re seeing corporate profits across the board that are going to be down year over year for the next two quarters. That’s the worst number we’ve seen since the recovery began and if corporate profits aren’t there and manufacturing is slowing down, what do you think’s going to happen at the top when they don’t even know what the rules are because of the fiscal cliff? It all ties in together to paint a very negative picture.”
Paul Conway on The Willis Report cast doubt about the validity of the jobs numbers:
“I actually think at this point it’s gotten pretty absurd; not only the weekly numbers for the jobless claims, but for the monthly unemployment numbers. I think that Congress ought to have some oversight on this and take a hard look at it because it’s been month after month after month of revisions. I think it’s over 60 weeks of revisions on the weekly alone.
“We get into this monthly number and the reason that it’s so very important is because of Wall St. and because of those who are actually following this it actually impacts the economy. So for that number to be less than reliable, less integrity in it than it appears to have, I think is cause for Congress to take a hard look at it and ask questions of the Labor Secretary.”
John Lonski of Moody’s added: “It’s (the economy) better relative to what? The worse recession since the Great Depression? We still have a reduction in jobs since Obama took office and worst yet we have 4.7 million fewer jobs than we did back in January of 2008. Consumer confidence numbers that are very low make it very clear that this economic recovery is the worst, limpest business cycle since the 1930s.”
Mort Zuckerman in the Wall St. Journal writes:
“The alarming numbers proliferate the deeper you look: 40.7% of the people counted as unemployed have been out of work for 27 weeks or more—that’s 5.2 million “long-term” unemployed. Fewer Americans are at work today than in April 2000, even though the population since then has grown by 31 million.
“The key indicator of our employment health, in all the statistics, is what the government calls U-6. This is the number who have applied for work in the past six months and includes people who are involuntary part-time workers—government-speak for those individuals whose jobs have been cut back to two or three days a week.
“They are working part-time only because they’ve been unable to find full-time work. This involuntary army of what’s called “underutilized labor” has been hovering for months at about 15% of the workforce. Include the eight million who have simply given up looking, and the real unemployment rate is closer to 19%.
“And even many of those who have jobs are hurting, because annual wage increases have dropped to an average of 1.6%, the lowest in the past 30 years. Adjusting for inflation, wages are contracting.
“Many young couples decide that they can’t afford to start a family, and as a consequence the birthrate has just hit a 25-year low of 1.87%. Nor are young workers’ prospects very good. Layoff announcements have risen from year-ago levels and hiring plans have dropped sharply. People are not going to swallow talk of recovery until hiring is occurring at a pace to bring at least 300,000 more hires per month than the economy has been averaging for the past two years.
“Furthermore, the jobs that are available are mostly not good ones. More than 40% of the new private-sector jobs are in low-paying categories such as health care, leisure activities, bars and restaurants.
“We are experiencing, in effect, a modern-day depression.”