2010 January 09 Saturday
The Illusion Of Stable Unemployment

Sounds like the unemployment rate finally stabilized and started down a bit.

The nation's December unemployment rate remained unchanged from November at 10 percent, the federal Bureau of Labor Statistics reported yesterday, a sign that the hoped for turnaround in joblessness had not yet arrived.

Barack Obama thinks this is good news.

"This is the best jobs report that we've seen since 2007," the president said then. "I've got to admit, my chief economist, Christy Romer, she got about four hugs when she handed us the report."

Having a female in the position of chief economist means we have to put up with this nonsense about four hugs from our progressive liberal President. How about some rational thinking instead?

Note again that Barack Obama at least claims this report is good news. Does he believe it? The only reason the unemployment rate didn't rise is because 661,000 people gave up trying to find jobs. People gave up looking faster than people lost jobs. If Obama could only do a better job of demoralizing the unemployed he could get the official unemployment rate heading downward.

The Labor Department announced this morning that 589,000 jobs were lost in December. The official unemployment rate remained at 10.0%, as the civilian labor force also shrank by an even larger number, 661,000.

The jobless rate would have risen to 10.4% without this latest block of people giving up on job searches.

Had the labor force not decreased by 661,000 last month, the jobless rate would have been 10.4 percent, according to economists including David Rosenberg at Gluskin Sheff & Associates in Toronto and Harm Bandholz at UniCredit Research in New York.

All told 1.9 million have given up looking for jobs since May. So the official unemployment rate greatly understates the extent of job loss.

Since May, the labor force has dropped to 153.1 million from nearly 155 million, a 1.2 percent decline. More than 660,000 people exited in December, the most in any single month in 14 years.

Economist Heidi Shierholz says the labor force is effectively missing 3.1 million workers who do not show up in the ranks of the unemployed.

In her analysis of the Bureau of Labor Statistics data, Ms. Shierholz noted that according to federal numbers the labor force has decreased by 810,000 since the recession began in 2007 at a time when, due to population growth, it should have increased by 2.8 million. She said that means there are 3.1 million missing workers who should be in the labor force but are not counted as such. They are a group that, when the economy recovers, also will have to be absorbed into the work force.

The New York Times puts the discouraged no-longer-looking number at an even higher 3.6 million.

Over all, an estimated 3.6 million out-of-work people have been uncounted since the recession began in December 2007. They include people who had not recently looked for work and those who would have entered the work force in normal times, like recent high school and college graduates, but remained on the sidelines as jobs disappeared.

The labor force participation rate has tanked to a 25 year low.

The participation rate, or the share of the population in the labor force, fell to 64.6 percent in December, the lowest level since 1985, from 64.9 percent.

In 1Q 2000 the labor force participation rate was 67.3%. Oh, the good old days.

Share |      By Randall Parker at 2010 January 09 09:16 PM  Economics Labor


Comments
Bob Badour said at January 10, 2010 6:38 AM:
Having a female in the position of chief economist means we get this nonsense about four hugs from our progressive liberal President.

Keep in mind he's a lying bastard who gets off on telling people what he thinks they want to hear. Perhaps they understood the numbers, and they were hugging her because she was crying so hard.

On the bright side, all these people leaving the workforce is a big change. We wanted change, right?

Mercer said at January 10, 2010 6:40 AM:

You neglected one crucial factor: Unemployment is at a twenty five year high and still over 100,000 people a month legally immigrate to the US. Has anyone heard any elected official mention this? If the republicans don't make this an issue before November they are truly the stupid party.

Parvu Sian said at January 10, 2010 7:53 AM:

Mr. Obama is on a mission. Some collateral damage is to be expected. The goal is social justice in a utopian people's world. A lot of americans will suffer. That's okay. America has always been a reactionary country. Change takes pain.

Black Death said at January 11, 2010 4:36 AM:

When Stalin was asked about the dreadful results of forced collectivization in the USSR during the 1930'S (millions of deaths, famine, lots of one-way tickets to the Gulag, etc.), he quoted an old Russian proverb, "You can't chop down a forest without making some wood chips." So the victims of this hideous experiment were referred to (very quietly) as "Stalin's chips." I suppose Obama expects a few chips as he builds his socialist utopia here in the USA.


Post a comment
Comments:
Name (not anon or anonymous):
Email Address:
URL:
Remember info?

      
 
Web parapundit.com
Go Read More Posts On ParaPundit
Site Traffic Info
The contents of this site are copyright