July’s Job Numbers

Poor jobs numbers from July continue to reflect a slow-moving economy.

 

The first quarter’s economic contraction has been revised a final time. A previous revision showed that the economy contracted 2.9%. The latest revision, released this week by the US Department of Commerce, says that first-quarter GDP declined at a 2.1% rate, which though revised modestly upward, is no cause for celebration. Preliminary estimates of second-quarter GDP growth is estimated to be around four percent, based on the strength of consumer and business spending. That gives many economists and investors hope that the economy will continue to grow near this pace for the remainder of the year.

 

As is the case, the GDP will be revised in the coming months and time will tell to what extent this revision will be up or down.

 

As for job additions, private firm ADP reports the economy added 218,000 jobs in July, down from 288,000 the previous month. Many of these jobs were created in the retail industry.  Today, the Bureau of Labor Statistics reported that 209,000 jobs were added to the economy. Almost eight million part-time jobs now account for over 18% of the jobs in economy, according to the BLS.[3]

 

The unemployment rate remains steady at 6.2%, while the U-6 unemployment rate- the rate that includes all of the underemployed and discouraged workers that is often considered the true unemployment rate by financial experts- is 12.2%. The unemployment rate for blacks increased to 11.4%, up from 10.4% in June, while black teenage unemployment increased to 34.9%. The unemployment rate for Latinos, a demographic superficially growing in importance, saw their unemployment rate remain steady at 7.8%.

 

The workforce participation rate saw a very modest gain to 62.9%.

 

Again, the job gains, the initial estimates of second-quarter GDP growth, and the dropping of the national unemployment rate may give few people confidence-particularly those in the media, the Obama administration and its defenders- but over 11.5 million people remain unemployed, while 92-plus million are out of the workforce completely.

 

There are other economic indicators that signify the depths to which the economy has stalled.

 

For example, according to a study reported by the New York Times, the median household worth is $56, 335. That’s down thirty-six percent from where it was in 2003, when the median household worth was $87,992.[4]

 

Families are making less as a result of wage stagnation but they’re also spending more because the costs of goods services continue to increase.[5] The effects of inflation are similar to taxes, especially when wages are unable to keep pace with inflation.[6]

 

With stagnant wages not keeping up with inflation, it may be of little wonder that homeownership has decreased to its lowest level in almost twenty years.[7] The Commerce Department notes that only 64.7% of homes are owner-occupied. This number is projected to continue its decline.[8]  Why? One reason is that many would-be, first-time homebuyers are unable to find jobs with requisite salaries that would allow them to purchase a home. Tighter lending restrictions by banks, and decreased wages of those who have jobs also make it difficult for people to purchase homes.

 

Additionally, more and more Millenials find themselves still living with their parents[9] because there aren’t enough full-time jobs being created to keep pace with demand. Therefore, millions of people are forced to delay the process of buying homes.

 

Those who do own homes aren’t faring any better. According to real estate firm Zillow, roughly thirty-seven percent of mortgage holders owe more than their homes are worth.[10]

 

Furthermore, more than a third of all Americans have some form of debt in collections.[11] As most are aware, collections negatively affect credit scores, which in turn results in higher interest rates, costing consumers more money when and if they’re granted additional loans and other lines of credit. This is another sign that millions of people are still struggling to gain a sense of economic stability, which is another strain on the economy.

 

With the continuing economic paralysis, millions of Americans unable or are pessimistic about finding work, which leads some observers to believe the actual unemployment rate is closer to 18%;[12] wage stagnation and increasing inflation, homeownership decreasing, the president has decided that he’s now- NOW- going to focus on the economy. Obama intends to attach his presidential legacy to the “growing” economy.

 

I thought his legacy was Obamacare?

 

Regardless, I’m sure this economic “focus” won’t commence until after the president’s two-week vacation at a lavish $12-million dollar estate belonging to- of course!, a Democrat donor- in Martha’s Vineyard.[13] Not bad for the one-percenter, I mean leader of the party who claims to be for the poor and against income inequality.

 

Not bad at all.

 

To his credit, the president needs a vacation. After all, it’s extremely hard work verbally condemning and issuing empty threats to Vladimir Putin; antagonizing the Israelis as they fight Hamas terrorists; ignoring Iran’s pursuit of nuclear weapons; minimizing the atrocities and refusing to recognize the pure evil of- and committed by- the junior varsity ISIS team in Iraq.

 

It’s hard work not taking responsibility for encouraging tens of thousands of disease-carrying immigrants from Central America to come here illegally. And it’s especially hard work going to high-priced fundraisers in New York and Los Angeles, particularly while the world burns.

 

Anemic Economic Recovery, Year Six

The bad news from the Veterans Affairs scandal, the tepid commencement speech at West Point- which was coldly received, and the extremely questionable decision to trade five high-level terrorists from Gitmo for “missing” soldier Bowe Bergdahl, in addition to several other presidential missteps has been a distraction from the ongoing bad news regarding the economy. But it won’t change the reality that a country dependent on liberal policies for wealth creation and economic growth, won’t create wealth and won’t grow.

 

Like ours.

 

According to the National Bureau of Economic Research, we are now into the sixth year of a supposed economic recovery. But the economy resembles anything but recovered.

 

The jobless rate remained at 6.3% in May. ADP says that 179k private sector jobs were added in May, compared to 217,000 jobs the BLS says were created, which was down from April. May was yet another month in which job creation didn’t keep up with population growth.

 

“Economic recovery.”

 

The labor force participation rate also remained unchanged at 62.8%, the third time the participation rate has been this low during the Obama presidency. If the current labor force participation rate was the same as it was at the start of this recovery in June 2009, (65.7%), the unemployment rate would be above 10%.

 

The number of “unemployed” people tallies 9.5 million people. The average length of unemployment is 34.5 weeks (almost six months). Thirty-five percent of unemployed people have been jobless for 27+ weeks. A third of the jobs created are in the low wage sector. The 2.1% wage increase doesn’t offset inflation. We just recovered all of the jobs lost prior to the recession (’07), but we’ve added an additional 10-plus million people to the labor force.  And over 92 million people aren’t in the labor force, 11.5 million more than when Obama took office.

 

“Economic Recovery.”

 

As it pertains to Hispanics and blacks, their jobless numbers were 7.7% and 11.5%, respectively. Black unemployment has a history of being roughly twice the national rate. Unfortunately, the black employment rate hasn’t “rallied” nearly as quickly as it has for the country overall. The reason- blacks have continued to diligently look for work longer than the national prospecting average, which means they’re counted as being part of the labor force for a longer period of time. The extended duration of prospecting is partially responsible for the perpetually a high unemployment rate including, the disparity between the black/white unemployment rates.

 

“Economic Recovery.”

 

This stellar job picture is in addition to news that the GDP’s first quarter growth was downgraded from .1% to -1%. This means the economy contracted last quarter. This is the second such economic contraction in three years, the other being the first quarter of 2011 was when the economy “grew” at -1.3%. Earlier this month when addressing the current economic contraction before the Joint Economic Committee, Fed Chairwoman Janet Yellen told lawmakers that she viewed the contraction as a “pause” in growth.” Pause in growth. A ‘pause’ would be zero growth; -1% isn’t a pause. Only a progressive can walk backwards while claiming s/he is moving forward.

 

In addition to the economic contraction, the Wall Street Journal reported that worker productivity also plunged 3.2% in the first quarter.  Economists continue to blame the ‘harsh winter’ for the drop in worker productivity and the contraction of the GDP, but drops like these, are due to much more than the weather.

 

“Economic Recovery.”

 

The sixth year of President Obama’s prosaic economic recovery also sees stagnant wages (2.1% increase over the last twelve months) and increased school loan debt, which now totals over a trillion dollars. People having increased debt are partially responsible for the low volume of mortgage applications. Many of those who can’t afford to purchase homes are the often-cited Millenials. With increasing school debt, less-than-perfect credit, tougher qualifications for lending approval- combined with the inability to find work, Millenials are being prevented from participating and contributing to the economy. That’s why a third of Millenials are currently living with their parents.  The present situation affecting Millenials doesn’t inspire much optimism for the future of our economy.

 

But it’s not just Millenials who are having a rough go at finding work. According to the Labor Department’s own statistics, more than 10 million men aren’t in the labor force- which means they’re not working nor looking for work. This is a record high. Additionally, there are 3 million men who’re counted as in the labor force but who aren’t employed: these are men would work if they could find a job. That’s 13 million men negatively affected by the recovery who would otherwise be participating and contributing to the economy. “War on women?”

 

Nope. “Economic Recovery.”

 

To give more insight into how bad the national apathy is regarding our current economic picture, a recent poll showed that 47% of unemployed people have completely given up the hope of finding a job. In another poll, 60% said that their version of the American Dream was unachievable.

 

And if you think that Obama may do something advantageous for the country to spur the economic engine, if only for optics, forget it. Obama’s new, congressionally circumventing EPA regulations that claim to reduce carbon emissions over the next fifteen years, will actually reduce the presence of the coal industry. It will also wipe out over 200,000 jobs, cost the economy upwards of $50 billion dollars a year and, increase electricity rates- that fulfills Obama’s promise that “electricity rates would necessarily skyrocket.”

 

This isn’t an “economic recovery” by any stretch of the progressive’s imagination.

 

The past six years have demonstrated a clear, unadulterated truth. From the moment Obama sat down in the Oval Office-, the economy wasn’t a priority of his domestic agenda. Instead, Obama eagerly sought to implement as much of his expensive ideology as he could. From the “stimulus bill,” to “investing in ‘green energy,’” to increasing taxes and nurturing class warfare; to increasing entitlements and government dependency, to his financial reform bill, to adding endless pages of EPA regulations, etc., the president never intended to resurrect the economy.

 

Don’t expect him to start now.