Well, the Democratic Convention began with a Jimmy Carter endorsement of Obama and ended with a Jimmy Carter jobs report.
Here is some Obama magic for you. The unemployment rate ticked down to 8.1%; the broader U6 rate ticked down to 14.7% from 15%. Yet there is not a shred of good news in this report. How so?
- Jobs created: The net increase in nonfarm payroll in August was 96,000, according to the BLS Establishment Survey. For some perspective, the employment-age population grew by 212,000, as reported by the BLS Household Survey. So we are nowhere near keeping up with the population growth, much less recovering the millions of old jobs lost during the recession. Additionally, June jobs growth was revised down from 64,000 to 45,000, and July was revised down from 163,000 to 141,000.
Construction jobs increased by just 1,000, while manufacturing jobs fell by 15,000. 10% of the August gains, 9,000 jobs, came from the resolution of the Con Edison utility strike.
- Size of civilian labor force: So why did the unemployment rate drop? Well, if you shrink the size of the pool, the unemployment rate will actually go down. While a net-96,000 jobs were added in August, the civilian labor force shrunk by 368,000! The Labor Participation Rate is down .2% to 63.5%, lowest participation rate in 31 years. Moreover, the Civilian noninstitutional population grew by 212,000. So when population growth is factored with the shrinking labor force, there are now 581,000 more people not in the Labor Force relative to the previous month. That’s why, according to the Household survey, 119,000 total jobs (including non-payroll) were lost in August.
- “People who aren’t in the labor force but want a job” at the highest level since records began
- According to AEI’s James Pethokoukis, the unemployment rate would be 11.2% if the labor force participation rate was the same as when Obama took office
- Comparison to January 2009-Obama’s inauguration date: The size of the working age population grew over 8.8 million from 234.739 million at the time Obama was sworn in. Due to the lack of job growth to keep up with the population growth, there are 8.419 million more individuals who are not in the labor force then when Obama took office. That is the real casualty of his presidency. The labor-participation rate has shrunk from 65.7% to 63.5%. The employment population ratio has gone down from 60.6% to 58.3%.
Liberal economists will offer loquacious excuses about the aging population shrinking the labor force. Yes, it’s true we have an aging population. However, that is a gradual problem; it doesn’t explain the precipitous drop that has coincidentally coincided with the recession and “recovery.”
And what about women? Here’s the war on women for you. The number of women not in the labor force has increased by over 4.245 million since Obama took office. Their employment-population ratio shrunk from 55.3% to 53.1%. Look who is forcing women back into the kitchen to bake cookies for their husbands.
The problem here is not the recession that Obama complains he inherited. We are no longer losing jobs. The problem is the recovery. Worse than a high unemployment rate, we have an unprecedented number of people permanently giving up on the job market. This is what a centrally-planned Keynesian recovery looks like. This is what a country permanently on decline looks like. At this point during the Reagan recovery (1984), we were creating between 250-400,000 new jobs a month, at a time when the population was much smaller.
No amount of free contraception or abortion on demand can rectify the jobs crisis that Obama has created.