By Douglas V. Gibbs
We were told a year ago by economists that it would take a net total of about 3 million jobs being created last year in order to lower the unemployment rate by 1 percentage point for 2010. It would take 150,000 new jobs a month just to keep the unemployment rate at the same level. Last month only 36,000 new jobs were created, and we are being told that the unemployment rate has dropped yet again, now all the way down to 9%. Yet, January was disappointing because economists were expecting at least 145,000 new jobs.
One must ask that if 300,000 new jobs are needed per month for the entire year to drop the unemployment rate, and 150,000 new jobs a month are needed in order to keep the unemployment rate from rising, how is it that the rate has been working its way downward, now settling at 9%, with numbers like we saw in January of only 36,000 jobs created?
Since the liberal left has declared that the recession ended nineteen months ago, job growth has never even come close to the numbers needed to lower the unemployment rate, much less keep it from rising. Yet, during that time period, we are being told that somehow the unemployment rate has dropped from nearly 10% to 9%.
Could it have anything to do with the fact that we are beginning to enter the presidential election campaign season?
No presidential incumbent, except for Franklin Delano Roosevelt (because people believed his propaganda that the New Deal was working), has ever been reelected with an unemployment rate above 8%. The Democrats know this, so they will lie, cheat and propagandize to do whatever they can to get the rate below that mark, thinking that will give Barack Obama a second term.
But if the rate isn't truly dropping, how is it?
The drop to 9% unemployment couldn't be due to the creation of new jobs, for that number is rather anemic. So, we have to look deeper into the bag of tricks the progressive liberal Democrats have been dipping into.
The Democrats have subtracted 2.2 million available jobs from existence. 2.2 million people in the last reporting period have stopped looking for work. This draws into the debate the U6 unemployment rate. The U6 takes into account everybody out of work for whatever reason. The U3, which is the standard government reported unemployment rate, does not.
The U3 says the rate is 9%, and it consists of people currently on the unemployment rolls. In other words, people that are filling out the forms and are on record to be actively looking for work. The 9% U3 number does not count those who have given up looking for work, small business owners that have gone out of business and are not working, those whose unemployment benefits have expired, or those that are underemployed. The U6, however, does count all of those additional unemployed. The U6 is actually over 17% before seasonal adjustment.
The leftists are trying to convince us that they are jumping up and down in excitement and that the rate has dropped even though the job creation numbers are nothing near where they need to be for that to happen. The have dropped 2.2 million people off of the rolls from those looking for work to make that happen. Creative mathematics, I suppose. They simply subtracted over two million jobs from the reality of jobs available throughout the country. Reducing the overall number of total jobs has reduced the percentage of overall unemployment, or at least the way you calculate it for the U3 category. But the U6 number continues to be the real number, and it went up over 17%.
So last year they needed three million jobs created to lower the unemployment rate a full point, and we've only had 133,000 jobs, yet the rate has dropped .8% during that time period. They also told us we would need 5% GDP growth to lower unemployment a full percentage point, and that also hasn't transpired. Yet, we are being told that the unemployment rate has gone down more in the last two months than in the last fifty-three years.
The propaganda does not match the math, or their estimates. The liberal Democrats are lying to try to make it look like the results of what Obama has been doing is not nearly as bad as what the reality of the whole thing is. They are trying to convince you that all of the Keynesian insanity is paying off, when in reality everything is steadily worsening.
According to the Zero Hedge website: "At 64.2%, the labor force participation rate ... is now at a fresh 26-year low, the lowest since March 1984..."
With such low numbers of people employed, how can the rate be going down?
There are more people entering the workforce than the number of jobs created, and there are plenty of people not on the unemployment rolls that are not working as well - but they are not being counted.
The labor force has decreased in size, according to the leftists. 86.2 million people are not in the work force. 2.2 million in one year have simply stopped looking for work. On paper this makes it look like there are 2.2 million fewer jobs. And boom, they have their 9.0% unemployment rate.
There were 215,000 fewer jobs added in 2010 than previously reported after the seasonal adjustment, and the labor market needs at least 300,000 job gains each month to make a difference in the unemployment rate. There is no legitimate way to move the unemployment rate down to 9% without created liberally created manipulation. None of it adds up, but they expect you to believe it does because they said so.
We gained 36,000 jobs in January, and we are supposed to believe that a measly increase of 36,000 jobs made the unemployment rate go down almost a half a point, and .8% in two months.
How is it that the number of unemployed persons decreased by 600,000 while the labor force was unchanged? It's not even mathematically possible.
-- Political Pistachio Conservative News and Commentary
Formula shows why it's so hard to cut jobless rate, Economic formula shows why it will be so hard to lower the unemployment rate - Associated Press, Yahoo Finance
Unemployment rate down to 9% with only 36,000 new jobs created? 10 reason why it can’t! - American Conservative Daily
Labor Force Participation Plunges To Fresh 26 Year Low - Zero Hedge
January jobs report disappoints - CNN Money
Table A-15. Alternative measures of labor underutilization - Bureau of Labor Statistics
July 2009: U6 Unemployment Rate 15.9% - Numbers Don't Lie - Right Side News
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