The Numbers Are Good, But They Need To Be Better

The American economy is slowly improving. It is not racing along, but it is improving. Investor’s Business Daily recently posted an editorial explaining that although we have a 4.1 percent unemployment rate, we are not yet at full employment. As the article explains, there are other numbers that need to be considered when looking at the economy.

The editorial reports:

But look at the numbers more closely and you see that we are far from full employment.

First, the 0.1 percentage point decline in the unemployment rate in October was almost entirely the result of the fact that 968,000 dropped out of the labor force that month.

That’s right, for every new job created, nearly four people left the labor force.

The broader measure of unemployed — which combines those actively searching for a job with those working part time but want to work full time or are “marginally attached” to the labor force — show the jobless rate to be 7.9%.

And the IBD-TIPP poll shows that there’s likely even more slack than that. The October survey — which asks those polled whether they or anyone in their household is looking for work — shows that the share of job seekers is currently above 10%. This number, by the way, has consistently tracked higher than either of the BLS’s two measures.

Here’s another way to look at it. Back in December 2000, the unemployment rate was 3.9%. But that month, the labor force participation rate — the share of the population that’s either working or looking for a job — was 67%.

The current rate: 62.7%.

If the labor force participation rate were the same today as it was in 2000, the official unemployment rate would be more like 10%.

The 10% unemployment rate would be better than what the actual rate has been in recent years, but obviously, it is not good.

The editorial concludes:

There is clearly still a need for pro-growth policies to get millions of workers sitting on the sidelines back to work.

Those pro-growth policies need to begin with the passage of President Trump’s tax proposal followed by a complete repeal of ObamaCare. If the Republicans in Congress want to be re-elected, they need to do both. It is time to put away the fear of a political outsider succeeding as President and begin to work together to move the country forward.

An article on

An article on the website of the JFK Library includes the following paragraph:

The president finally decided that only a bold domestic program, including tax cuts, would restore his political momentum. Declaring that the absence of recession is not tantamount to economic growth, the president proposed in 1963 to cut income taxes from a range of 20-91% to 14-65% He also proposed a cut in the corporate tax rate from 52% to 47%. Ironically, economic growth expanded in 1963, and Republicans and conservative Democrats in Congress insisted that reducing taxes without corresponding spending cuts was unacceptable. Kennedy disagreed, arguing that “a rising tide lifts all boats” and that strong economic growth would not continue without lower taxes.

I wonder if John Kennedy would be welcome in today’s Democratic party.

 

Good News On The Job Front

The Labor Department’s Bureau of Labor Statistics released its jobs numbers for June this morning. CNS News posted the numbers.

This is the Labor Force Participation Rate chart taken from the Bureau of Labor Statistics:

As you can see, the Labor Force Participation Rate is fairly steady and moving upward.

Meanwhile, the article at CNS News reports:

The U.S. economy added 220,000 jobs in June, the best showing since February and well above analysts’ expectations of 174,000.

The Labor Department’s Bureau of Labor Statistics also said the number of employed Americans — which set records in February, March and April — set another record in June, at 153,168,000 employed.

And the number of Americans not in the labor force — after four straight monthly gains – dropped a bit to 94,813,000.

There is still a lot that needs to be done to put Americans back to work, but we are moving in the right direction. Cutting back on federal regulations should help stimulate the economy, but that impact of cutting those regulations may not be immediately felt.

The article further reports:

Over the past 3 months, job gains have averaged 194,000 per month.

In a June 29, 2017 update, the Congressional Budget Office said it expects the U.S. labor market to tighten in the next two years, as greater demand for workers will push the unemployment rate down and the labor force participation rate up.

The projected demand for workers will encourage more people to participate in the labor force, temporarily offsetting the projected decline in participation arising from such factors as the ongoing retirement of baby boomers.

CBO projects that the unemployment rate will remain around 4.3 percent by the end of 2017 and then drop further to 4.2 percent in early 2018.

How To Lie With Statistics

Ever wonder where the unemployment numbers come from? Ever wonder why you don’t seem to be moving forward and Washington is telling you how great the economic recovery is? Every wonder why you know a lot of Americans who have been unemployed for a long time and have given up searching for a job when the government keeps telling you that thousands of new jobs are being created every month? Ever wonder why your reality does not seem to agree with the reality you see reported on the news? Well, the world most of us live in is a little different from the world that the people writing the news, reporting the news, and working for the government live in.

This article doesn’t need words–it just needs charts and graphs.

From CNS News, the real unemployment picture:

BLMJobStatisticsThese are the real unemployment numbers–not the ones the Obama Administration is releasing–these numbers take into account the workforce participation rate.

This is the workforce participation rate taken from the Bureau of Labor Statistics:

WorkforceParticipationRateSo why are those in Washington painting such a rosy picture of the economy? They are doing great. Here is a list of the wealthiest counties in America from Wikipedia. The list is from 2012, but I seriously doubt much has changed. Note where they are located:

wealthiestcountiesinAmericaOur representatives no longer represent us. Nor are the bureaucrats in government serving the American people. It is long past time to clean house!

 

Looking Past The Obvious

President Obama has touted the ‘economic recovery‘ as one of his accomplishments. He might want to be a little quieter about that as the latest jobs figures and the numbers behind them indicate a very slow recovery.

Yesterday Investor’s Business Daily posted an article about the jobs numbers just released.

Some highlights from the article:

While last month’s overall gain of 38,000 jobs, including a 25,000 rise in private payrolls, was dragged down temporarily by the labor strike of 35,000 Verizon (VZ) communications workers, the weakness was broad-based. On net, just 51.3% of industries added jobs, the lowest since February 2010, Labor Department data showed.

…One decent bit of news in the employment report is that the trend of firming wages remained intact, as hourly pay rose 0.2% from April and 2.5% from a year ago. That’s consistent with anecdotal reports of companies having to pay more to attract or keep good workers, and many finding qualified workers in short supply.

…The drop in the unemployment rate to 4.7% from 5% in April appears at first to be consistent with a tight labor market. Still, the sudden drop in joblessness, which reflected fewer people in the workforce rather than an increase in employment, should be taken with a grain of salt, given the household survey’s higher margin of error.

…The reality portrayed by the weak jobs report got some confirmation from the Institute for Supply Management’s survey of non-manufacturing industries, with the index slipping to a 28-month low of 52.9 in May from 55.7 in April — well below expectations. The employment gauge fell into negative territory, dropping 3.3 points to 49.7, just below the neutral 50 level.

…Somehow, the retail sector has seemingly defied gravity when it comes to employment, adding 11,400 jobs last month and 323,000 over the past year. The explanation may be that the workweek has shrunk, since aggregate hours of work in the retail industry are down 0.3% over the past three months.

So what is the bottom line? Workforce participation is down, job growth is slow, and the number of hours people are working has gone down. That doesn’t sound like a robust economic recovery to me. It is definitely time for a change of direction. As I have previously stated, I am not a Trump supporter, but I will vote for him because I believe that he may have the business experience to turn this mess around.

When You Look At The Entire Picture, It Does Not Look Really Good

Chances are that someone in the news today is going to celebrate the fact that the unemployment rate has dropped to 4.9 percent (he lowest since February 2008, the Labor Department said on Friday). That sounds really good until you start looking at the entire picture.

Ed Morrissey at Hot Air posted an article today that shows the entire picture. Here are a few inconvenient facts from the article:

Looks like the 2015Q4 GDP results told a broader story than some credited. The Associated Press called the results from today’s Bureau of Labor Statistics reporta sharp deceleration from recent months” (later removing “sharp” from that description), paralleling the sharper deceleration of production. The US economy added only 151,000 jobs, a miss on expectations and barely enough to tread water on population expansion.

…Numerous news services heralded the a drop in U-3 rate of unemployment to 4.9%, but the number of people not in the workforce also rose by 360,000 people from last month (table A-16). That follows an increase of 284,000 the previous month. Those not in the labor force who want a job increased by 461,000, and that follows an increase of 379,000 in the previous month. The latter measure had been falling in 2015, but has reversed itself by 840,000 in two months — both in the 0.7%-growth-rate Q4.

The article concludes:

The sharp reversal on exits from the labor force should be the greatest concern from this report. The 151,000 added jobs pales in comparison to those numbers, and those added jobs only account for population growth anyway. Combined with last quarter’s GDP growth rate, it appears that 2016 is off to a tough start, and may signal a very tough year.

Eight years of President Obama’s economic policies have had consequences. The over regulation, the war on coal, the war on fracking, the decision to stop the Keystone Pipeline, and ObamaCare have all had economic consequences. If Hillary Clinton is elected, we will have more of the same. If a small government Republican is elected, he will be in a position to set the American economy free. It will be interesting to see what happens next.

The July Employment Numbers

This is the chart from the Bureau of Labor Statistics:

BureauofLaborStatisticsJuly2015

So what does this mean? Breitbart.com posted a story about the numbers today.

The article reports:

July’s labor force participation rate however remained the the same as June at 62.6 percent. Before last month the labor force participation rate had not been that low since October 1977, when the participation rate was 62.4 percent.

The BLS reports that the civilian labor force did experience a slight uptick from 157,037,000 in June to 157,106,000 in July after the month of June saw it drop by 432,000.

While the labor participation rate remains at the lowest its been since the late 1970s, the BLS highlighted that the unemployment rate remained at 5.3 percent and nonfarm payroll jobs increased by 215,000.

The labor participation rate is a concern. The unemployment rate does not take the labor participation rate into consideration–it is based only on the number of people actually looking for work that are unemployed. The current labor participation rate is not indicative of a healthy economy.

 

Looking Past The Obvious

Breitbart.com posted an article today about the June jobs report. Most of the mainstream media is trumpeting the fact that 237,000 jobs were created in June. That is good, but what they fail to mention is that the civilian labor force shrank by 432,000.

The article reports:

The labor force participation rate also decreased 0.3 percent from last month to 62.6 percent.

The country has not seen a labor force participation rate that low since October 1977 when the participation rate was 62.4 percent.

The BLS reports that the civilian labor force also shrank by 432,000 in June, from 157,469,000 in May to 157,037,000 in June.

While people dropped out of the workforce the BLS (Bureau of Labor Statistics) highlighted that the unemployment rate declined to 5.3 percent and payroll jobs increased by 223,000.

The number of people who dropped out of the labor force was higher than the number of jobs created. That is not a good thing.

Cutting The Apron Strings

Unfortunately the federal government has developed apron strings that could hold up the George Washington Bridge. The federal government is always willing to fund things they want you to do (not mentioning that the money comes from the states to begin with) and often expects you pay back the loan or accept unfunded mandates as a result of the money given. The extension of unemployment benefits the federal government offered the states a while back was a classic example of this. States were encouraged to extend unemployment benefits for as much as two years. The federal government would pick up the tab. Unfortunately the money had to be paid back to the federal government. The way to do that was by increasing the unemployment taxes businesses pay. This, of course, cut down on the money businesses had to expand and hire people.

ABC11.com has the story of what has happened in the State of North Carolina:

At a news conference, McCrory thanked Republican leaders in the North Carolina House and Senate for coming up with reforms to help retire the debt.

“Let me give you a little history,” McCrory told a crowd of lawmakers and government higher-ups. “In February 2009, North Carolina started borrowing from the federal government to extend unemployment insurance benefits.”

The governor went on to sum up how the state found itself saddled with nearly $3 billion in debt and why paying it off matters. For starters, because each year the state didn’t pay off the debt, North Carolina businesses would end up paying incrementally more in taxes.

…McCrory said this year alone, with the debt paid off, North Carolina businesses would save $280 million in penalties.
Obviously there are those who are objecting to the cuts made in unemployment benefits and the length of time they can be collected. On July 1, 2013, extended unemployment benefits ended.
The chart below is from the Bureau of Labor Statistics:
 NCLaborStatsHeading
LaborStatisticsNorthCarolinaThere are two lessons here–first of all,there is no such thing as free money from the government and second of all, when you subsidize a behavior, it increases, when you take away the benefit, it decreases.
Congratulations to the Governor and Legislature of North Carolina.

Lying With Statistics

Yesterday The Federalist posted an article about the latest unemployment numbers from the Department of Labor. There was rejoicing that the unemployment rate had dropped to 5.5 percent. You might want to hold off on that rejoicing for a bit.

The article includes a chart showing what the unemployment number actually is when you add in the labor force dropouts:

Unemployment Rate With Labor Force Dropouts March 2015

As you can see, the actual unemployment rate is closer to 10 percent. So, if you know anyone who is unemployed and can’t understand why it is so hard to find a job, show them the real numbers. It might make them feel better.

The article explains:

This decline (the decline in the labor force participation rate) has significant effects on the official unemployment rate. People who are unemployed and eventually stop looking for work are no longer counted as being part of the labor force, which means they’re no longer counted by U.S. statistical agencies as being unemployed (you can read in detail about the math underlying this dynamic here). The result? An artificially low official unemployment rate.

It is an unfortunate fact of life that you can make statistics say pretty much anything you want them to say.

Looking Behind The Obvious Numbers

The jobs report came out today. John Hinderaker at Power Line posted an article about the numbers reminding us that what we read in the media may not be the whole story.

Some of the facts he points out:

* The number of people aged 16 years and above who are not in the labor force increased by 111,000 this past month. While a somewhat lower increase than in months past, it still outpaces forecasted retirements.

* The number of people taking part-time jobs because they cannot find full-time work increased by 275,000 this past month.

* In fact, the number of people employed full-time (according to the household survey that also counts self-employed) declined by 523,000 while the number of part-time workers increased by 799,000 (which includes those who wanted part-time and those who wanted full-time but could only find part-time). These estimates are seasonally adjusted to account for the normal increase in June part-time work.

* The U-6 unemployment rate (the broadest measure of unemployment) remains virtually unchanged at 12.1 percent. U-6 includes those people who are discouraged, only occasionally trying to find work, and those employed part-time for economic reasons.

The article also reminds us that both incomes and economic growth remain flat. It seems as if the only thing growing in this economy is the Stock Market (which the government is currently propping up).

The Real Unemployment Story Under President Obama

This is a chart of the labor participation rate since 2004:

The chart is from an article posted Friday at Doug Ross @ Journal. As you can see from the chart, the rate was a pretty solid 66 percent for the years 2004 through 2008. It began to drop in 2009 and has continued downward. The current low unemployment rate was obtained by not counting the people who have dropped out of the labor force.  As you can see, there have been a lot of them since 2009. The bottom line here is simple–the economy is not recovering at this time. It is limping along and will be further limited by the President’s war on coal and other environmental decisions.

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About Those Unemployment Numbers

John Crudele at the New York Post has done a number of stories about fraud in the reporting of the unemployment numbers. He posted a story yesterday about the Congressional investigations into this fraud, including an investigation by the House Oversight Committee and Congress’ Joint Economic Committee. He adds that he is also investigating. He is currently waiting for the Commerce Department to comply with a Freedom of Information Act request he has filed for e-mails and text messages between people in the Philadelphia Census office.

The article reports:

At the core of all these investigations is solid evidence that at least one surveyor — a guy named Julius Buckmon, working out of the Philadelphia Census office but polling in Washington, DC — submitted fake household surveys that were used in compiling the Labor Department’s unemployment rate.

Because of the scientific nature of the Labor Department survey, Buckmon’s actions alone would have affected the responses of some 500,000 households.

But as I’ve been reporting, the scam was allegedly much larger than that and included other surveyors (or enumerators as they are called) over many years. And supervisors at least two levels up are said to have known about — and covered up — the scandal.

What the investigators are looking for is that the unemployment numbers were falsified so that they would drop just before the 2012 election. In fact, the unemployment rate did drop before the election.

This is a chart from trading economics.com:

United States Unemployment Rate

Before you get too excited over the fact that unemployment may be dropping, you need to take a look at the labor force participation rate. When people stop looking for jobs, they are no longer counted as unemployed. Therefore, as the number of people who are working drops, the unemployment rate drops. That is not the way it should be, but it is the way it is. The chart below from the Bureau of Labor Statistics shows what has happened to our labor force participation rate since 2009:

laborparticipationrate2014Regardless of whether or not there is fraud involved, our current unemployment numbers are very misleading. Please follow the link above to the New York Post to hear the rest of the story. There is a smoking gun. Unfortunately, the person in charge at the time is claiming that he never saw it.

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The Numbers Behind The Numbers

The two charts below are from a website called zerohedge.com. They were posted today. The article posted the charts to explain how the unemployment rate has gone from 7.0% to 6.7%. The unemployment situation for Americans have not improved–more Americans have given up and stopped looking for jobs. We are not in an economic recovery.

LaborForceParticipationRate

 

 

 

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If The American Economy Is Recovering Why Do We Need To Extend Unemployment Benefits?

I am not unsympathetic to people who have lost their jobs during the recession. I know that there are a lot of them. I don’t mind paying unemployment benefits to people while they look for jobs. I just don’t understand why unemployment benefits should be paid to people for almost two years. I don’t think that encourages people to look for jobs.

The Wall Street Journal posted an editorial today about the economic impact of extended unemployment benefits. The article reminds us that according to the current unemployment numbers, the unemployment rate is 7 percent–not 10 percent rate as it was when the extension of benefits was originally passed.

The article reports:

This also ignores that states and employers are already paying for this supposed free lunch in the form of higher job-killing payroll taxes under the Federal Unemployment Tax Act, or Futa. At least 24 states have been forced to raise this tax since 2010 and the Labor Department says it will rise again in 13 states to repay $20 billion in loans and interest they owe the feds for helping to finance state-funded benefits. This federal tax is applied to 0.6% of a worker’s first $7,000 of annual wages. The rate rises automatically by 0.3% for every year states fail to repay their unemployment insurance loans from Uncle Sam.

…Economist Martin Feldstein long ago proposed a better plan to create a self-insurance component of unemployment insurance with tax dollars going into an employee trust fund for each worker that could be drawn during a bout of unemployment. Workers could keep whatever money was left over at retirement, which would encourage workers to become re-employed more quickly after losing a job.

Instead the current system provides as much as two years of benefits for not working and raises payroll taxes on employers even as some 20 million Americans are still unemployed, underemployed or discouraged from looking for work. None of this will help the economy create more jobs, which is what the jobless need far more than another government check.

The American taxpayer cannot afford to pay people not to work for extended periods of time. We are in danger of losing our work ethic. There was a time in this country when a person would take any job available rather than take money from the government. Unfortunately, we have come a long way from that time. Unemployment benefits should be paid for a long enough time period to allow a person to find a job. Two years is simply too long to pay a person for not working.

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Looking Behind The Unemployment Numbers

Bloomberg.com posted a story today on the unemployment numbers released today. The unemployment rate has dropped to 8.6 percent from 9 percent. That sounds good until you realize that in order to create that unemployment number, the American labor force had to be reduced considerably.

The article reports:

The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.

“You’d like to see the unemployment rate coming down when people are coming into the job market, not disappearing,” James Glassman, senior economist at JP Morgan Chase & Co. in New York, said in a radio interview on “Bloomberg Surveillance” with Tom Keene.

So 278,000 people got jobs, 315,000 people gave up on finding jobs, and the unemployment rate went down. Somehow I don’t think that is the way you are supposed to lower unemployment. I don’t know if all administrations cook the numbers this way, but obviously this one does. I strongly suggest that whoever the Republican presidential candidate is, we elect him. Maybe then we will get honest numbers.

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