Ten Reasons Why November's Jobs Report Is Dismal
Whether broadcast or online, all around the mainstream media today, there's a bacchanalia in progress over today's jobs numbers.
146,000 new jobs!
America was right to reelect Obama!
And yet, all it would take is a media with a shred of intellectual honesty and curiosity to report the truth about today's numbers. A deep dive combined with a little historical context is something you would expect our media to participate in. But because that kind of reporting would betray Obama's economic record as a failed one, it's never-ever done, and never will be.
Thankfully, though, we have New Media, and all around the inter-web-nets today, the truth about this month's report card on Obama's job creation record is being reported.
But first, a little background…
For my list to make contextual sense, it's important to understand exactly what the Labor Force Participation Rate (LFP) is. Essentially, this number measures the percentage of the civilian working-age population who are currently employed and those who are unemployed and actively seeking work. These are the people who are considered participants in our labor force.
Not included in the LFP are those of working age who retire, are in school or prison, have voluntarily stayed home to raise kids, or who have been discouraged and have given up the search for work after a long period of unemployment. The discouraged want and are willing to work but have lost hope, given up their job search, and subsequently dropped out of the labor force.
Quite remarkably, discouraged workers are not included among the unemployed. In other words, if everyone currently counted as unemployed suddenly became discouraged, the unemployment rate would drop to zero. Wouldn’t Obama and the media just love that.
Some leaving the LFP do so for legitimate reasons: a planned retirement, enlistment in the military, school, a new baby. But too many are no longer counted among the LFP because our current job situation is so dismal, they've simply given up. Some, like my wife, have been forced to retire early -- which means lesser benefits.
We know discouragement is a large part of the problem because pre-recession CBO predictions about what the LFP would look like today were much higher than what it is today. We also know this because some discouraged workers are included in what's known as the U-6 unemployment number; which takes into account the long-term unemployed who want full time work but have either given up looking or who have had to settle for part-time work. Today the U-6 unemployment rate is a whopping 14.4%.
Today's LFP rate of 63.6% is a thirty-year low.
With all of this in mind… Here's a round-up of the top ten reasons today's jobs report is awful news, not good news.
1. In October, the LFP was 63.8%. This month it dropped to 63.6%. This means a whopping 542,000 people dropped out of the workforce in just one month and explains almost entirely why the unemployment rate edged down to 7.7%.
2. According to AEI's Jim Pethokoukis, if the LFP was the same in November as it was in October (meaning those 542,000 had not dropped out), the unemployment rate today would be back over 8%. If the LFP was the same last month as it was exactly one year ago, today's unemployment rate would be 8.3%. If the LFP was the same last month as it was when Obama took office, the unemployment rate today would be 10.7%.
3. Last year the American economy averaged 153,000 jobs per month. This year we're averaging 151,000. We're going the wrong way. By comparison, during the best job creation year of the 1990s, the American economy averaged 321,000 jobs per month.
4. Anywhere from 125,000 to 135,000 new jobs are required simply to keep up with the number of people who enter the labor force due to population growth. Because of this…
5. At the present level of job growth, it will take another 13 years just to reach pre-recession employment levels.
6. 73% of the jobs created over the last five months have been government jobs.
7. Most of November's job gains (53,000) came from the service/retail sector. Construction lost 20,000 jobs, wiping out (and then some) a 15,000 gain in October. Manufacturing lost 7,000. 14,600 jobs came from the film business -- a onetime and temporary anomaly.
8. According to Gallup, November saw the biggest decline since 2010 in the percentage of those aged 18 and older and employed full time. A drop from 45.7% to 43.7%.
9. The Establishment Survey (of businesses) show the economy created 146,000 jobs in November. The Population Survey (of people) shows we lost 122,000. This discrepancy could come from the fact that it's not just businesses that create jobs. Many people are self-employed. Businesses might have created 146,000 jobs last month, but out among the people, 122,000 jobs were lost.
10. With a much smaller population to work with, the average monthly number of new jobs created by the Reagan Recovery as compared to what we saw today and all throughout the so-called Obama Recovery, tells the entire story.
What's happening to our economy is no laughing matter. But what's happening to our culture at the hands of the media is even worse. The media's desperate desire to protect Obama is creating a New and Accepted Normal. Worse still, meager job growth, a sinking LFP (which means fewer taxpayers), and an explosion is government jobs is the new standard of success.
We've been through Great Recessions before. Our "recovery" didn’t have to be like this, and anyone old enough to remember the economy Ronald Reagan inherited and the one he left us with, will tell you that.
To protect a failed president, we're being lied to and swindled by a media that's certainly old enough to know better.
Note: Jim Pethokoukis' indispensible reporting made this article possible. His work is not only linked here, but it's where I found most of the links, as well. You can bookmark his site here.
Follow John Nolte on Twitter @NolteNC