The unemployment rate fell to 8.6% in November, with the labor market adding 120,000 jobs. Only problem is that, according to CNN:
‘Overall, the labor market still has a long way to go to recover from the financial crisis. Less than a third of all the 8.8 million jobs shed have since been recovered. A whopping 13.3 million people remain unemployed…’
CNN also said that:
‘The public sector cut 20,000 jobs in November, while private employers added 140,000 jobs.0:00 / 3:06 The engineer drop-out problem// … The retail industry alone added about 50,000 jobs, more than half of which were at clothing and accessory stores, while the leisure and hospitality industry added 22,000 jobs, mostly at restaurants.’
So what is really going on here?
First, this dreadful employment picture is totally Obama’s.
Second this so-called cut in public jobs is good news but it truly is a drop in the bucket. There are literally millions more government workers than America needs in bloated workforces at the local, state and federal level, all cultivated by the Democrats. And the taxes to support them are drawing large amount of precious investment capital out of the private economy. Massive cuts are needed in government employment to truly reinvigorate private growth.
Third, look at that figure that says that 72,000 jobs were added in retail and hospitality. This is simply seasonal Christmas hiring. Because the Christmas season this year began on November 1 with many stores offering up Christmas deals and radio stations playing Christmas music the day after halloween.
Wait, however, and you will see the unemployment rate fall again when the January report comes out, because of December Christmas hiring. But you watch the February report. You will see a spike in unemployment in January when all the seasonal jobs disappear.
And consider this: Retail and restaurant jobs are fine, but they are ‘soft’ service jobs. Meanwhile the backbone of the economy is in ‘hard’ manufacturing and energy production where the wealth to buy clothes and eat in restaurants is created. So these 72,000 jobs are ‘soft jobs’ and they are seasonal to boot. This is very weak economic news.
But it gets worse. Look at what CNN conveniently left out of its unemployment report, this from cnbc.com:
‘The (8.6%) rate fell from the previous month's 9.0 percent, a move which in part reflected a drop in those looking for jobs. The participation rate dropped to 64 percent, from 64.2 percent in October, representing 315,000 fewer job-seekers…’
This means that a staggering 315,000 people dropped out of the labor market in one month and are no longer counted as looking for work, while only 120,000 jobs were created. This is dreadful news.
And all told this news means that the media are celebrating an Obama recovery that is non-existent.
It is important to remember that the American economy still has some vestiges of capitalism. And after such a sharp drop in the job market since 2007, we historically have seen a sharp rebound like a V shape. But we have not seen such a rebound. The ball has not bounced.
Yet when unemployment was 4.6% under George Bush in 2006 the Democrats screamed about “tax cuts for the rich”. In other words they had to deflect attention from the good economy because it was Bush’s.
Now these same media and Democrats are crowing that unemployment is down to 8.6%. This is a disastrous number. And it is not even the real rate, friends. There are many millions more unemployed than are reported in 8.6%. The real rate of unemployed/underemployed is 15% to 20%.
And the overall dropout rate is really many millions who have simply given up and are not even counted any more. But the government and media are doing everything they can to make this Obama Depression look better than it is.
Now look at this statistic about Boeing from bloomberg.com:
‘Among companies expanding payrolls is Boeing (BA), the largest U.S. aircraft maker. The Chicago-based company is hiring about 100 machinists a week as it boosts production by about 60 percent over three years to whittle down a backlog that now stretches to nearly 4,000 aircraft.’
Boeing is one of the international manufacturing giants still left here in America, creating great wealth and prestige for its workforce and for the nation. You would think that the Obama administration would be doing everything possible to support Boeing.
Yet Obama’s National Labor Relations Board is seeking to prevent Boeing from moving production of its new Dreamliner 787 aircraft from heavily unionized Washington state, where Boeing has had decades of labor trouble, to South Carolina, which is a ‘right to work’ state where Boeing can better compete internationally by controlling its labor costs.
And the recent decision by the Obama administration to delay a decision about allowing the Keystone oil pipeline project has effectively killed tens of thousands of jobs – maybe permanently - that would be created today in the ‘hard’ wealth-creating sector of the economy.
In another case Obama has shut down any prospect for new natural gas drilling in the Wayne National Forest in economically struggling southeastern Ohio. This would have created more ‘hard’ jobs that would create ancillary jobs in that region like retail and restaurants.
Thus no matter what happens with monthly employment figures the American economy has massive problems that won’t be solved without major reforms. We have a housing crisis, a debt crisis, a jobs crisis, an energy crisis and finally a basic wealth-creation crisis in that manufacturing and energy production cannot withstand the assaults of the Democrats.
Look at our debt. In 2005, under George Bush, our total national wealth (GDP) was $12.64 trillion and debt was 62.8% of GDP or about $8 trillion. This 62.8% is considered the top end of a “manageable” debt/GDP ratio.
Today our debt is $15 trillion or more than 100% of our GDP which is only about $14.8 trillion. So whatever happens with unemployment, our debt crisis is exploding under Obama. This is going to be a permanent drag on the economy to us, our children and our grandchildren.
Thus no matter what happens to unemployment, there are mounting anti-business pressures coming from the Democrats – debt, excessive taxes, regulation and environmentalism, labor agitation, lawsuits, ObamaCare – that never will be solved without major reforms. And every single reform is being blocked every step of the way by Democrats.
Do not be distracted by the unemployment numbers. These days they are less and less relevant. Because the overall economy is much worse off than the media and Democrats want you to know. And without major changes, it will never improve.
Please visit my blog at www.nikitas3.com for more conservative insights.