Terrible August Jobs Report Shows the Recovery in Tatters
President Obama's case for reelection rests on the idea that while the recovery may be sluggish, we are headed in the right direction. The Obamacrats said that over and over at the Democratic National Convention.
But the August jobs report, out today from the Labor Department, suggests otherwise. First, the basics (via Reuters):
Nonfarm payrolls increased only 96,000 last month, the Labor Department said on Friday. While the unemployment rate dropped to 8.1 percent from 8.3 percent in July, it was largely due to Americans giving up the search for work.
-- – If the labor force participation rate was the same as when Obama took office in January 2009,the unemployment rate would be 11.2%.
-- Since the start of the year, job growth has averaged 139,000 per month vs. an average monthly gain of 153,000 in 2011. Growth is decelerating.
-- -- The broader U-6 unemployment rate, which includes part-time workers who want full-time work, is at 14.7%.
-- Average hourly earnings were unchanged, and up just 1.7% over the past year,matching the slowest pace on record.
I think this analysis from JPMorgan about sums it up:
The more comprehensive employment-to-population ratio ticked down to 58.3%; this measure is a mere 0.1% above its cycle trough, indicating that once one takes account of population growth there has been essentially no progress in repairing the labor market after the recent downturn. In fact, if you go through the details it’s hard to find any redeeming aspects to this jobs report. In terms of the broader economy, today’s numbers should check any enthusiasm that the economy was gaining momentum toward the end of the summer. Instead, the economy appears to remain stuck in the mud.
And that does this mean for the presidential election? Nothing good for President Obama. As analyst Dan Clifton of Strategas Research notes:
The historical relationship between non-farm payroll growth and the pct of vote received in a reelection campaign is very strong. This relationship suggests the President needs to reach 1.1 pct growth to reach the magic 50 pct threshold. After today’s report, the relationship suggests 340k jobs would need to be created next month. The current trajectory suggests the President will receive 49 pct of the two party vote.
But maybe it all doesn't matter. Maybe Americans have accepted that this is the New Normal and agree with Bill Clinton that four years isn't enough time to turn things around. But right now it doesn't look like things have turned around much at all.
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Comments:
Jun '10
Re: Terrible August Jobs Report Shows the Recovery in Tatters
What Democrats don't understand is, the very first business asset that entrepreneurs need is optimism. Kill that off, with taxes, fees, and over-regulation, and you've killed economic growth. It's not all about money. It's about expecting to be rewarded, eventually, for your hard work. People have to see a light at the end of the tunnel. The light they see now is another train coming.
Jul '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
I think the labor force participation rate is perhaps the most damning figure set of all. The only other two data points I would like to see graphed with it are: 1) birth rate (specifically those turning 18 over the period) and 2) Retirement rate. I have a hunch that most of the labor force drop IS NOT due to retirement.
Jun '12
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Good point, but I also think a stable economic environment is just as important, if not more important.
With the Obamacrats making up the rules as they go along, there's a lot of uncertainty in the business world right now, so they're hunkering down. Get this gang -- yes, I said gang, as in a Chicago gangster gang -- out of office and things should rebound nicely as business owners come out from under their desks and start taking risks again.
Apr '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
How is this being reported on the morning shows? Yahoo reported it fairly, putting the jobs added number in the headline and called it a major blow to Obama in the first paragraph. But I have no idea how other media reported it as I am work and can't watch...
Rasmussen and Gallup(job approval) are showing Obama getting a bounce this week. If this is reported right, this may cut into it...
Apr '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Took a few minutes away from the home office to watch some of the news channels. Heard a few dems and here's the narrative I'm beginning to hear:
-This data is positive because the rate came down and this is now 30 straight months of positive job growth
-Now is not the time to give up on middle class with Romney who would only help millionaires/billionaires
-Dems have great jods ideas, but the house GOP is blocking everything
-How dare Romney bring this up and politicize the issue
Heaven help us if this country gives Obama 4 more years. Actually, I would almost like to see him win (in some alternate universe where I could immediately snap back to this universe with a victorious Romney) and see who they blame when things still aren't better in 2-3 more years!!
Aug '12
Re: Terrible August Jobs Report Shows the Recovery in Tatters
I am wondering the same thing. Most college graduates entered the work force from April-June, although I imagine a large number took the summer off and are now looking for full time work. I would also imagine most baby-boomers are probably not retiring as they have to continue working in order to make up their retirement savings they lost when the bubble burst.
Apr '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Silver lining: I got to see Ed Morrissey's disconsolate Stormtrooper on the subway again this morning.
Edited on September 7, 2012 at 6:43pmNov '10
Re: Terrible August Jobs Report Shows the Recovery in Tatters
This sounds like a campaign commercial waiting to be made. "400,000 people giving up altogether is the right direction?"
Apr '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Umbra Fractus
This sounds like a campaign commercial waiting to be made. "400,000 people giving up altogether is the right direction?" · 1 minute ago
Forward.
Jul '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Chris L
I am wondering the same thing.
Umbra Fractus
This sounds like a campaign commercial waiting to be made.
wmartin
Forward. · 6 minutes ago
I agree with all of you. I'm trying to find reliable data that I asked for above. BLS and SS are not very good about this. Does anyone have any idea where to look for 1)Retirement rate info and 2) reliable population data? For some unknown reason I don't quite trust the census data on this last point...
Jun '12
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Umbra Fractus
This sounds like a campaign commercial waiting to be made. "400,000 people giving up altogether is the right direction?" · 1 hour ago
I just thought of a better one: "Obama. Lowering the unemployment rate by making people give up looking for work."
Mar '11
Re: Terrible August Jobs Report Shows the Recovery in Tatters
FYI, Jim, I'm using your Ricochet podcast as bait to get someone to join. He likes your blog and twitter feed, so I hit him with the "wait'll you hear his podcast" pitch.
Aug '10
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Most of us know that POTUS doesn't create jobs. However, he can drive the unemployment rate down by getting people to drop out of the work force. How does he do that? Simple - beef up the "safety net" to entice people to quit looking for work.
This report is a strong indication that this is exactly what Obama is trying to do. It meets his short term goal of driving down the unemployment rate and his long term goal of making more people dependent on government. Why else would he make ads begging people to go on foodstamps? Why else would he gut the work rules for welfare?
I don't think that Obama is smart enough to come up with this strategy on his own - he has plenty of Marxists around to help him - but he is willing and eager to implement it to stay in power. He believes that enough voters will only look at the top line number which will help him get reelected.
Edited on September 7, 2012 at 9:19pmMay '10
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Is it normal to expect Mitt Romney to not be able to maximize this dreary news? Is it him or is it me? I'm one of his most enthusiastic supporters (since 2007!). He keeps surprassing expectations, but I keep getting worried.
Actually, I guess it's not Romney, but my dismal appraisal on the voters. They elected SCOAMF when it was painfully obvious he could only fail, so I guess that's the real culprit.
When does the Romney Death Star go operational? Make it so!
Edited on September 8, 2012 at 3:30pmSep '10
Re: Terrible August Jobs Report Shows the Recovery in Tatters
It would be very wise to use the U6 numbers, and use that as a cudgel. People know the number is being manipulated or a joke. So use the larger number so that when we want to show our success later on, we will be able to use larger numbers. When you say the U6 number people think that sounds more fitting of their social circles.
It's 14.7%, remember the democrats used the U6 number to hammer bush on the economy. Let them live up to their own rules. Alinsky them back.
May '10
Re: Terrible August Jobs Report Shows the Recovery in Tatters
Systemic unemployment at European model levels (I.E. brave new world reality).
16 Trillion in current debt + 100ish Trillion in unfunded liabilities, funded by a 15 Trillion economy AT THE FEDERAL LEVEL ALONE. Thus default is guaranteed, the only question is what form it will take.
Fed creating money from whims in order to keep the USA from rapidly becoming Greece through interest rate explosion on debt paper.
The one viable escape hatch we have, cheaper (versus global competition) and abundant energy, being actively and effectively road blocked by the current administration.
Any budgets submitted by the administration have been so absurd they fail to gain one vote from the President's own party. Democrat convention focussed on abortion, contraception "rights," and other non-economy or growth issues.
It has been a long time since I lived in the states, and I don't get back that often. I simply do not understand how any sentient human being with grade school math could possibly contemplate voting for a continuance of this disaster - guaranteeing an increase in velocity of the fiscal tsunami that is going to hit us.
Unemployment is just one number among many that illustrates the current insanity.