According to the Department of Labor, the unemployment rate fell one-tenth of 1 percent, from 8.3 to 8.2, for the end of March 2012, as a net 120,000 new jobs were created.
Help me understand: How did the unemployment rate “drop”?
According to that very same Department of Labor, a net of 170,000 additional people join the workforce every month as the population grows and as students graduate. That is a net of 170,000 more than those who retire from the workforce.
So, how did the unemployment rate drop from 8.3 to 8.2 percent when more people (net) entered the workforce than the number of net new jobs created?
The Department of Labor says that fewer people are looking for jobs – they gave up looking – so there are fewer people available to work when it calculates the unemployment rate.
Let’s look at this another way. According to the Labor Department, 131 million people are working. Some are part-time, and many are underemployed. But if we work backwards from their 8.2 percent unemployment rate, that means the government believes that there are 143 million people available for work. At the end of 2008, there were145 million people available for work, with134 million employed (according to the Departmentof Labor). The unemployment rate was 7.6 percent.
So, what happened to 2 million people since December 2008? And what happened to the net of 170,000 people who entered the workforce each month (2.5 million total since December, 2008)? Where are those 4.5 million workers? What happened to them? There should be 147.5 million available for work, not the 143 million the Department of Labor is using. And the real unemployment rate should be 11.2 percent with an underemployment, part-time and unemployment rate that is really about 23 percent. Almost one out of every 4 people is underemployed, unemployed, or only working part time.
So how could this difference in the unemployment rate be possible? How could the bureaucrats decrease the number of people available for work by 4.5 million people in calculating the unemployment rate?
The Department of Labor reports to the president. Is the president conning America again … this time through his Department of Labor? Add this to the long list of deceptions perpetrated by Obama through the government agencies that report to him – e.g., Department of Justice (Holder), Department of Homeland Security (Napolitano), Treasury Department (Geithner), EPA (Jackson), Department of Energy (Chu) – just for a start.
And for those who think the economy is doing better because the stock market is improving … not so. As I stated a couple of years ago, the stock market is increasing in value because:
- low interest rates drive up the price of stocks;
- more available money (printing it) creates more money to buy stocks, which increases stock prices.; and
- other competitive investments (like real estate) are unattractive, so there is more money for stocks.
If the economy stays as it is right now, the stock market will crater when the U.S. stops printing money, increases interest rates, or has an improved real estate market.
The Obama administration is deceiving America again. The economy is no better. If we only use the same number of available people for work as there were at the end of 2008 (145 million), then the unemployment rate right now is more like 9.1 percent … and Obama promised to keep it under 8 percent. We citizens and taxpayers assumed he meant 8 percent at the same number of available workers plus the additional people entering the workforce. He inherited an unemployment rate of 7.6 percent and turned it into 11.2 percent. That is almost a 50 percent increase.
The programs of the Obama administration failed. And why? Because they focus on financial solutions and legislation, rather than helping free enterprise flourish. Obama’s programs do not motivate the wealth creators in America; instead, his programs redistribute wealth. And wealth redistribution does not create anything; it just moves the money around like moving the deck chairs on the Titanic.
The government needs to get out of the way. It needs to cut regulations, cut taxes, cut restrictions on private enterprise and be a consumer of products rather than an investor in crony-owned companies like Solyndra, so the wealth creators can do their thing and create more wealth opportunity and more jobs for everyone in our economy.
Obama will never do this because he does not believe in free enterprise – he believes in a government centered society where decisions are made by an elite ruling class. Therefore, the U.S. economy will stay stuck as long as Obama is in the White House.