Skip to content

Jobs, the Economy and Obama’s Lies

July 7, 2012

I have read several articles about the Obama administration telling us “it’s important not to read to much into the monthly jobs report”. The monthly jobs report is what tells us how many jobs are created each month in the US labor market. His administration has told us this approximately 30 times when these reports have been issued. “As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and employment estimates can be subject to substantial revision,” Alan Krueger, the chairman of the White House Council of Economic Advisers, wrote Friday in response to the news that the unemployment rate is still at a disappointing 8.2 percent.

The figures can be volatile and estimates can be subject to substantial revision, so we should just ignore them for that reason? According to the Obama administration we should. The Bureau of Labor Statistics (BOL) revised Mays job numbers up from 66 thousand to 77 thousand, they also revised Aprils numbers, down though, from 77 thousand to 68 thousand jobs added. The June numbers are better though, we added +80,000 jobs is what the report says, that’s obama’s economic policies for you, we are on fire now in the job market. The figures in that report show a gain of 47,000 jobs in Business and Professional services, however 25,000 of those (over half) are temporary jobs.  Here’s the June report if you wish to read it yourself.

From my understanding we need to add a minimum of 180,000 jobs each month to keep up with new people entering the job market (college grads, immigrants, etc…). That means every month we are creating more unemployed people, even if we don’t lose a single job. And that number of 8.2% unemployment rate is really not accurate as it primarily came from people dropping out of the labor force. The unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The rate is calculated by dividing that number by the total number of people in the labor force. When the unemployed no longer count as part of the labor force, both numbers decline and the unemployment rate falls. Neat trick huh?

Here is a campaign video from Obama in 2004 for US Senate where he slights the Bush administration because unemployment was at 5.6% and we added only 310,000 jobs that month. Apparently he felt those were bad numbers, I guess back then the monthly job report was not so volatile and subject to revision.

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: