Obama says unemployment rate now 8.9%. Gallup says it’s 10.3%
CNBC: Employers in February hired at the fastest pace in almost a year and the unemployment rate fell to 8.9 percent—a nearly two-year low.
The economy added 192,000 jobs last month, with factories, professional and business services, education and health care among those expanding employment. Retailers, however, trimmed jobs. State and local government, wrestling with budget shortfalls, slashed 30,000 jobs, the most since November.
The government’s report Friday bolstered hopes that employers will shift into a more aggressively hiring mode and allow the economic recovery to get on firmer footing.
Here’s what Gallup reported yesterday . . .
GALLUP: Unemployment, as measured by Gallup without seasonal adjustment, hit 10.3% in February — up from 9.8% at the end of January. The U.S. unemployment rate is now essentially the same as the 10.4% at the end of February 2010.
The percentage of part-time workers who want full-time work worsened considerably in February, increasing to 9.6% of the workforce from 9.1% at the end of January. A larger percentage of the U.S. workforce is working part time and wanting full-time work now than was the case a year ago (9.3%).
So when you add the unemployment rate to the underemployment rate you get a 19.9 percent U6 unemployment rate, which is Great Depression levels.
DIGGING DEEPER INTO THE DATA: Job openings down 30%; layoffs at pre-recession levels
INVESTORS BUSINESS DAILY: Twenty months after the worst recession in
decades, job creation remains anemic, weighing on economic growth and making it even harder for the long-term jobless to find work.
Don’t blame layoffs. They spiked in 2009 but have returned to pre-slump levels, according to Labor Department data. But job openings remain 30% below their level when the downturn hit in December 2007. Gross hiring is down by 843,000 jobs.
CNBC’s Rick Santelli Explains Why the Official Unemployment Rate is a Phony Number
It’s because the “work force participation rate” has dropped to a 27-year low.
RICK SANTELLI-CNBC: The official size of the U.S. labor force is shrinking.
The Bureau of Labor Statistics publishes the “Labor Force Participation Rate” each month, along with a litany of other metrics that are used to give us the headline jobs number and the unemployment rate.
The government’s definition of the labor force is all individuals 16 years of age and older, who are employed or seeking employment. It does not include students; retirees; anyone with unreported income, or “discouraged” workers.
The participation rate is the comparison of the “labor force,” those looking for work or employed, and everyone else. That ratio is currently 64.2 percent seasonally adjusted, and 63.9 percent non-seasonally adjusted, the same level as last month. Both of those percentages are currently running at 27-year lows, meaning the percentage of Americans not working or even trying to join the work force is at a near three-decade high.
The last time the participation rate was above 66 percent — the 10-year average — was in August 2008.
It is imperative that we continue to monitor this relationship in order to determine if an improving unemployment rate means that American workers are finding jobs, or have just given up looking.
This chart of “Persons Not In The Labor Market Who Want a Job Now” shows what Rick Santelli is talking about:
SOURCE: Zero Hedge >>>
This chart shows the number of people who are not in the labor market, but who want a job. If these people were counted, the unemployment rate would now be 12.8 percent.
The figures from this chart are taken from the Bureau of Labor Statistics which can be found here.
This Bureau of Labor Statistics chart shows that the people who are not in the labor market, but who want a job, has risen from 6,108,000 in January 2010 to 6,643,000 in January 2011.
So in the past year, 535,000 Americans have dropped out of the labor market who want a job.
These people are no longer counted in the official unemployment number because they have stopped looking for work.
That’s why this drop in the official unemployment rate from 8.9 percent to 9.0 percent does not even begin to reflect reality. The truth is that the economy is in worse shape today than it was a year ago.
Remember, the economy needs to add 150,000 new jobs each month just to keep up with the monthly increase in U.S. population. You almost can’t not have a growing economy when the population is increasing at this rate. So pointing to anemic GDP growth doesn’t cut it either.
Adding just 36,000 new jobs in January (compared to 65,000 jobs added in tiny Canada) means we are continuing to fall farther behind what’s needed.
Here’s CNBC’s Rick Santelli a few weeks ago slamming CNBC Panelists for looking at Jobs Report with rose-colored glasses . . .
You’ll probably not veer too far off the road by paying attention to what Rick Santelli has to say.
Facebook comments:
Connect With Ben!
