Hey, America! Have you heard? The unemployment level in the US has dropped to 7.8%, the lowest rate since Obama took office. Don’t you feel better now? Oh, you don’t? Well, why on earth not? Oh, because you still don’t have a job?
It’s amazing what a few accounting gimmicks can do for you. Yes, it’s true that the U-3 unemployment level has finally fallen to 7.8%, but behind the numbers is the reality that the labor force participation rate is at a 30-year low, meaning that the actual U-3 unemployment would be 10.7% if the same number of people were counted today as were counted when Obama took office.
James Pethokoukis explains:
1. Yes, the U-3 unemployment rate fell to 7.8%, the first time it has been below 8% since January 2009. But that’s only due to a flood of 582,000 part-time jobs. As the Labor Department noted:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
2. And take-home pay? Over the past 12 months, average hourly earnings have risen by just 1.8 percent. When you take inflation into account, wages are flat to down.
3. The broader U-6 rate — which takes into account part-time workers who want full-time work and lots of discouraged workers who’ve given up looking — stayed unchanged at 14.7%. That’s a better gauge of the true unemployment rate and state of the American labor market.
Almost nobody is buying the 7.8% number.
CNBC notes serious inconsistencies in the Bureau of Labor Statistic’s report:
The Bureau of Labor Statistics’ nonfarm payrolls report presented a slew of contradictory data points, with the total employment level soaring despite the low net number.
CNBC economic analyst Rick Santelli smells a rat:
So does MSNBC’s Joe Scarborough. On his show this morning, the whole panel was confused by the numbers:
Here’s the tweet by the former CEO of GE, Jack Welch that started a firestorm on the blogosphere this morning.
Welch later doubled down on his tweet, despite naysayers:
After setting off a minor social media firestorm with a tweet suggesting the Obama administration had manipulated the September jobs report, Jack Welch wants to get one thing straight: He meant it.
“I wasn’t kidding,” the pugnacious former CEO of General Electric said in an interview.
ABC News correspondant Chris Cuomo calls the 7.8% number “bogus”:
Fox Business’s Charles Payne says the numbers don’t add up:
Washington Examiner senior writer Conn Caroll had an interesting take on how the unemployment numbers may have been skewed in the “household survey”:
Charles Schwab chief investment strategist Liz Saunders also voiced caution over the “household survey”:
“You have to be careful, particularly about components of the household numbers that are highly volatile,” said Liz Ann Sonders, chief investment strategist at Charles Schwab in San Francisco. “It’s been our view that we would see a slow but consistent improvement in the jobs picture. I’m not sure this changes that view much at all.”
Last but not least, who do you suppose predicted the events of today as far back as last December? Rush Limbaugh, of course. Listen to the replay of his eerily accurate predictions:
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