January’s Jobs Numbers

When it comes to the economy there continues to be very little success to celebrate, unless the understanding of success is defined downward. And under President Obama, economic success has indeed been defined downward, at the expense of millions of struggling Americans.

The president, possibly realizing this fact- a mere six years too late, made a significant portion of his uninspiring SOTU address about reviving “middle class economics.” This was nothing more than a continuation of his predictable pattern of recycling campaign rhetoric of wealth redistribution in lieu of actual economic policies that facilitates more job creation and more employed Americans.

The proof Obama’s unserious plan for the economy was his $4 trillion dollar budget that most everyone panned. The President’s budget contained $2 trillion dollars in tax increases with the intention of redistributing some of the revenue to the middle class. It bears repeating- redistribution of wealth isn’t economic growth. Reduced regulation, incentivizing the market that leads to substantial job creation combined with wage increases is what stimulates economic growth.

And of course, job creation still isn’t where it should be. Private payroll firm ADP claims that the private sector created 213,000 jobs last month- far below expectations (shocker), and down from the 252,000 jobs created in December. The Bureau of Labor Statistics says that 257,000 jobs were created, slightly better than the number of jobs created in December. The unemployment rate ticked up slightly 5.7%, while the unemployment rates for blacks fell slightly to 10.3% while and Latinos increased to 6.7%. The U-6 measure shows that the unemployment rate is 11.3%- nearly twice the official rate, which bounced the labor force participation rate back up to 62.9%, which remained in the same two-tenths of a point limbo it’s been since April.  Still, 9 million people remain unemployed, 6.8 million underemployed, and 92+million remain out of the workforce.

For many months, I’ve researched an written about the actual economic conditions that characterize this so-called recovery, which is a contrast to what the Obama administration reports and celebrates. During this time, I’ve noted that that the numbers coming out of the Dept. of Labor, at best, have been “allegedly” falsified in an effort to absolve Obama from his responsibility for- and contribution- to the perpetually weak economy. At worst, the true nature of the economy has been intentionally underreported for ideological and deceptive reasons related to Obama’s 2012 reelection campaign.

The true nature of the economy is the number of people who remain unemployed, the underemployed, the number of Americans who are not in the workforce; the numbers of monthly job creation that’s well below monthly population growth; the number of jobs created during the past several years and how they’ve gone to immigrants both legal and illegal as opposed to native-born Americans. All of these specific economic indicators are what the Obama administration neglects to mention and what his press secretaries in the media actively decide to keep from the country.

This past week, the Chairman and CEO of Gallup, Jim Clifton, penned a commentary that has confirmed common sense and what we’ve been relaying for months. The actual unemployment rate of 5.6% (for December) is baloney as a result of the method in which the government counts those who’re employed and unemployed. For example if one gives up looking for work for four weeks in a row, s/he isn’t counted as unemployed; they’re simply ignored. At the same time, if one works a single hour a week and earns more than $20, s/he isn’t counted as unemployed, but as employed. Those working part time and want or need full time work, they’re counted as “employed”, not unemployed. This is one reason why people refer to the alternative measure that counts unemployment, the U-6 rate, as closer to the actual unemployment rate. As Clifton says himself, “The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.” A lie that benefits Obama and continues to stifle this “recovery.”

In a separate commentary, Clifton also reports that, for the first time in 35 years, more businesses are dying than are created. Since 2008, business creation has fallen below the business failure rate.[5] According to Breitbart, “America has just 6 million businesses with one or more employers– 3.8 million of which have four or fewer employees. In total, these 6 million U.S. companies provide jobs for more than 100 million people in America.” From the report itself, “There are about a million companies with five to nine employees, 600,000 businesses with 10 to 19 employees, and 500,000 companies with 20 to 99 employees. There are 90,000 businesses with 100 to 499 employees. And there are just 18,000 with 500 employees or more, and that figure includes about a thousand companies with 10,000 employees or more. Altogether, that is America, Inc.”
Several other things continue to point to the non-recovery, recovery Obama celebrates:

  • The economy’s growth last quarter was only 2.6 percent, which was well under the 3.2 percent GDP was projected to grow. When the year is averaged out, the economy only grew 2.4%. Many economists are celebrating the best year of economic growth since 2010, which shows how hard they’re trying to find something to celebrate. Again, this is defining success down;
  • The Center for Immigration Studies found that since 2009, the Obama administration has dutifully and quietly gifted over 5 million work permits for “non-immigrant foreigners who arrived as tourists, students, illegal immigrants or other types of migrants…” which according to the Center, is outside the laws and limits set by congressional authority- again, at the expense of American workers. If the number of people already given work permits is added to the number of people included in Obama’s unconstitutional executive action of delayed deportation of illegal immigrants, more than 10 million foreign workers will be added to the economy by the end of this year- further suppressing wages due to the increased pool of labor. When that number is combined with the average yearly flow of immigrants into the country, Obama will have added 18 million non-native Americans to the economy since 2009- which wouldn’t necessarily be an issue if we had a strong economy that wasn’t hamstrung by regulations, poor job creation, and government mandates;
  • Tax revenues hit a record $739,482,000,000 for the first quarter of fiscal year 2015. Yet, the federal government ran a $176,664,000,000 deficit during that time, according to the Monthly Treasury Statement. The White House projects that for the totality of fiscal year 2015, the federal government will take in more than $3.1 trillion in tax revenues, another record. Yet the president is intent on raising taxes;
  • John Deere, and DreamWorks Animation both downsized in the form of layoffs;
  • Homeownership rates are at a 20-year low, according to the Commerce Department, via the Wall Street Journal. According to their estimations, slightly under 64 percent of Americans owned their home at the end of last year. As a result, naturally, prices in the rental market continue to climb;
  • Obamacare continues to do its part to further hamper the economy. A recent Congressional Budget Office report projects the president’s signature legislation will cost the government $1.993 trillion while taking in more than $643 million in new taxes, penalties and fees over the next decade. The net trillion-dollar price tag- which will still leave close to 30 million uninsured (which was one of the reasons Democrats unilaterally passed this)- will average out to a cost of $50,000 per person insured under Obamacare. This in light of Obama’s repeated promise that in passing this impractical bill, he wouldn’t add a dime to our deficits;
  • The Census reports that 20 percent of all children in the country relies on food stamps. Prior to the recession, that number was one in eight.

Obama claimed in his SOTU address that, “the shadow of crisis has passed” and we were going to “turn the page.” It may be a different page but it’s the same tired, old story.

August’s Economic Numbers

Listening to the President’s speech at the Milwaukee Laborfest this past week, he would have the country believe that the economy is booming- or at the very least, strengthening enough to give the country more confidence in his stewardship. Among other things, Obama bragged that his administration has created more than ten million jobs and that the country is stronger because Americans now have “quality, affordable health insurance that [we] can count on.” He also claimed that because of his economic policies, the American economy is stronger now than when he took office back in 2009.

 

But according to Obama, the main reason more people don’t realize how well the economy is doing is because of – the media. Yes, the same media that has defended his poor economic policies and have willingly spun the jobs report month in and month out- regardless of how bad the reports have been- are now at fault for- I guess- not spinning the economic news in his favor, enough.

 

Unfortunately for President Obama, the jobs numbers and other economic indicators paint a much different, less optimistic picture than the one he paints- regardless of television media input.

 

The initial estimate of the second-quarter GDP growth rate of four percent was revised upwards to 4.2%, which is news considering the first quarter contracted 2.1%. Though the second quarter growth is good news, when averaged with the first quarter, the economy has grown slightly above one percent.

 

As for jobs numbers, payroll processor ADP says that 204,000 jobs were added in August. Though down from the previous month’s job additions, August was thought to be the seventh month that private job creation exceeded 200,000. But, the BLS says that there were only 142,000 jobs created last month, far below what many economists expected. In addition, 7.3 million people are stuck in part-time employment and 92 million people aren’t in the labor force.

 

In August, the national unemployment rate ticked down to 6.1%. The U-6 rate, the more accurate indicator of unemployment- which includes discouraged workers, workers marginally attached to the labor force and those working part-time but prefer full-time work- is still 12%.

 

The unemployment rate for blacks is 11.4%, and there are more than twelve million blacks not in the labor force. Black teen unemployment dropped to 32.8%.   The unemployment rate for the politically coveted Latino demographic was 7.5%.

 

The labor force participation rate dropped slightly to 62.8%, once again matching the lowest point seen since 1978.

 

Other economic indicators show:

  • Every month for the last 36 months, at least 45 million Americans have been enrolled on food stamps (Supplemental Nutrition Assistance Program), according to the Department of Agriculture. In May 2014, the last month in which the data is known, more than 46 million people received food stamps;
  • The Bureau of the Fiscal Service’s Monthly Treasury Report, 2013 saw over two trillion dollars in benefits and entitlements paid out by the federal government. Almost seventy percent of this amount was paid out in non-means tested programs, which means program eligibility isn’t tied to income;
  • According to Census data, more than a third of Americans are receiving some form of government assistance.
  • Data recently released by Sentier Research shows that the median household income is more than three percent lower now than it was when the recession was declared over in June 2009, and is almost five percent lower than it was in December, 2007.
  • The Pew Charitable Trust shows that no state in the country could claim employment gains between 2007-2014.
  • The National Retail Federation announced that the retail industry lost almost 18,000 jobs in August;
  • The Congressional Budget Office recently revised an April 2014 report on the potential effects of Obamacare on the economy over the next ten years. Not only does the CBO project a smaller labor force participation rate than pre-recession levels, but expects the labor force participation rate to be further reduced because ACA subsidies are tied to income. After a certain level (400% of the federal poverty level) the higher the income the fewer subsidies available for increasing premiums- a clear incentive not to work.
  • For all of Obama’s income inequality rhetoric that fuels class warfare and resentment, under his leadership “the richest 10 percent were the only income group of Americans that saw their median incomes rise,” according to a Federal Reserve survey.
  • Even AFL-CIO president Richard Trumka has soured on Obama’s economic policies. When a union leader calls out the President of the party it supports, funds, and perverts- in addition to other Democrats- you know it’s bad.

 

With statistics like these it’s no wonder why the majority of Americans– 54%- are disappointed in the job Obama is doing on the economy– and he is “doing a job” on the economy. It’s also no surprise that almost half of Americans- 49%- think the economy is still in recession.

 

But according to Obama, all this bad news is the fault of the media and not his irresponsible economic policies.

 

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.