Sunday, May 6, 2012

Analyzing 2012 Unemployment Numbers

In the last quarter the unemployment rate has gone down:  from 8.2% to 8.1%.  Some are hailing this as a major achievement of the Obama administration.  "His economic policies are working," people are chanting.  Is this true:  are Obama's economic policies working?

Let's investigate the data:

1.  According to most economic experts 4% unemployment is treated as zero unemployment as there have been few times it's been lower (it was about 2% under Calvin Coolidge in the 1920s)

2.  When GWB left office the unemployment rate was bout 5.5%, the highest it was during his tenure

3.  Unemployment rates under Obama rose to as high as 11% and are now down to 8.1%

4.  As of May 2012 over 88 million Americans are not working

5.  115,000 jobs were added in April 2012.  This number has gone down three straight months.  In February 2012 259,000 jobs were created.  In March 154,000 were added.

6.  To put this in perspective, to replace all the jobs lost we would have to create 500,000 jobs a month, or 600,000 or more to gain ground

7.  If you include all the people looking for work plus those actively looking, the "real unemployment #" is 15-20%

8.  What this means is that lost of people have been unemployed so long they quit looking.  Statistics prove this:

9.  The 88 million people who are not working is  record number (it's the highest all time).  According to Tyler Durden, this is the lowest worker participation rate since 1981. (To put this into perspective, there are 311 million people in the U.S.)

10.  The 8.1% unemployment rate does not count people who have left the job market, or who have given up on finding work.  If it did, the "real unemployment #" would be used, which is between 15-20% unemployment.  Actually it's 14.5%, which has been consistent the past few years.

10.  So the reason the unemployment number has gone down is not because the economy has improved, it's not because more jobs were created, it's because a record number of people are no longer looking for work.

11.  To put this in perspective, that's 88 million people who are being paid off by the government, or who are being subsidized.

Obama has set  goal of getting the unemployment rate down to 8% by election time, and it appears the only way it can do this is by making the economy worse and forcing people to give up on looking for work.

The 8.1% unemployment number breaks down this way:

  • Men, 7.5% unemployed.  
  • Women, 7.4% unemployed. 
  • Teenagers, 24.9% unemployment.
  • Whites, 7.4%.
  • Blacks, 13.0%.
  • Hispanics, 10.3%. 
  • Asians, 5.2%.
So it the economy improving slowly but surely like Obama said, or is it getting worse?  Does the lower unemployment # mean more people are working?  Or does it mean more people are giving up and leaving the workforce?  

Stunningly, under Obama the unemployment rate fell while job growth fell. 


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