BLS Report: Weak Employment Growth - Setback For Labor Market And The Economy

This morning, the Bureau of Labor Statistics, which is part of the Department of Labor (DOL), released the unemployment number for August. While the unemployment dropped to 8.1% from 8.3% in July, the number was very disappointing to say the least. Regardless of what President Obama and V.P. Biden said yesterday at DNC 2012, the job numbers / employment situations are NOT good. Here are a few of the e key phrases from news reports: "Employment Growth Remained Weak," "More People Left The Labor Force," "Definitely A Setback For The Labor Market And The Economy."

 As you read the following consider the fact that the DOL is not independent but is part of the Obama administration and headed by Obama appointees. It would be fair to assume the numbers have been reported in a more favorable light than the data indicates. My dad often reminded me, "Figures don’t lie, but liars figure." Since he was born and raised on the Mississippi River a few miles from where Mark Twain resided, he may have modified Twain's quote: “Figures can’t lie, but liars will figure.”  Regardless, the situation is most likely far worse than reported.

CNBC reports today, “Employment growth remained weak in August, with just 96,000 new positions created but the unemployment rate dropped to 8.1 percent, according to a report that raises the possibility of more Federal Reserve easing. The decline in the jobless rate, from 8.3 percent in July, came primarily because the labor force participation rate fell to 63.5 percent, its worst level in more than 30 years. The civilian labor force contracted by 368,000. . . . [J]ob reports for June and July were revised lower. The June count fell from 64,000 to 45,000, while July's number came in at 141,000 from an originally reported 163,000.”

According to ABC News, “Economists had expected an addition of 125,000 total nonfarm jobs in August, and the unemployment rate to be unchanged at 8.3 percent. The unemployment rate declined in August by two-tenths of a percent because more people left the labor force, suggesting the unemployed are discouraged in their efforts to find jobs. Peter Morici, economist and professor at the University of Maryland's Smith School of Business, said the jobs added were ‘not nearly enough to keep pace with population growth.’ In a newsletter, Morici said the jobs lost in manufacturing and temporary help raise ‘concerns that the recovery is sputtering and a recession is eminent.’”

Bloomberg News adds, “‘This is definitely a setback for the labor market and the economy,’ said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York and former economist for the Fed. ‘This clearly validates Bernanke’s concern. We have Europe, the fiscal cliff, and it is a generally cautious business environment.’ . . . Employers may be reluctant to expand headcounts as they face a global economic slowdown and the so-called fiscal cliff, the $600 billion of tax increases and spending cuts that will take effect automatically at the end of the year unless Congress acts. . . . Factory employment fell by the most in two years, temporary-help companies eliminated positions for the first time in five months and the share of the working-age population in the labor force slumped to the lowest since 1981.”

Importantly, Bloomberg notes, “The unemployment rate, derived from a separate Labor Department survey of households, has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948.”

According to the Associated Press as quoted by other sources: "The report was weak throughout.  In addition to those who’ve given up looking for work, many young Americans are avoiding the job market by remaining in school. All told, the proportion of the population that is either working or looking for work fell to 63.5 percent. That’s the lowest level in 31 years for the labor force participation rate."

The Wall Street Journal adds, “[The politically important] unemployment rate, obtained by a separate survey of U.S. households, fell to 8.1% from 8.3%, . . . because of more people dropping out of the work force.   Throughout this year, the unemployment rate has bounced between 8.1% and 8.3%. Meantime, the labor force participation rate, which is the share of the population that is working or looking for work, fell to its lowest level since 1981. ”  They add, "Searching for good news in the guts of the report, economists found little. The average workweek was flat and July's figures were revised downward. Average earnings slipped slightly. The weak payroll numbers, taken with other reports that indicate a manufacturing slowdown, suggest growth isn't picking up . . ."

So the unemployment rate fell because Americans gave up looking for work instead of falling because more Americans found jobs. Another month of lackluster jobs numbers and Americans giving up looking for work only serves as a reminder of how the U.S. economy continues to sputter and how President Obama’s policies only seem to be making things worse.

Below is the breakdown of the August employment numbers prepared by Bankrupting America:

• The national unemployment rate ticked down to 8.1% in August (from 8.3% in July).
• Total non-farm payroll employment rose by 96,000.
• Revisions showed the economy gained 41,000 fewer jobs in June and July than originally thought.
• The rise in payrolls didn’t meet expectations – economists expected a gain of 125,000 jobs.
• One of the reasons the unemployment rate fell is that people are giving up looking for work—dropping out of the workforce.  The number of people not in the labor force climbed by 581,000.
• The number of unemployed was little changed in August at 12.5 million.
• Of the roughly 12.5 million Americans unemployed, 5 million have been looking for work for over six months.
• In August, employment rose in professional and business services, food services and drinking places, and manufacturing.

Americans for Limited Government President Bill Wilson today responded to the August unemployment report: "86,000 fewer Americans have a job today than when Obama took office in January 2009.  That is the indisputable fact that this Administration cannot deny in any media spin.  In August alone, another 580,000 people left the workforce entirely.  That's more than half a million people giving up hope of finding the American dream in Obama's economy last month alone. These are not just bad numbers; they are disastrous for our nation. While the top-line drop of the unemployment rate may seem like a positive.  It is entirely driven by people leaving the workforce.  In August alone, 119,000 fewer Americans have a job. Going forward with the failed Obama economic plan is a recipe for economic suicide, and August's jobs report, no matter the spin or manipulation, is just another proof point that this President's policies have damaged our nation's economy more than anyone since Jimmy Carter."

Today, Republican Presidential Candidate Mitt Romney responded to the report, "At the Democratic National Convention, former President Bill Clinton told America that his solution to joblessness and budget deficits was one word -- arithmetic. I couldn't agree more. Let's take a look at Barack Obama's record these last four years -- I think you'll agree the numbers just don't add up:

• 23 million Americans are out of work, have stopped looking for work, or are underemployed
• $16 trillion national debt (that's $50,000 for every American)
• 43 straight months of 8% or higher unemployment
• 4 straight trillion dollar budget deficits in a row -- more than any other president combined

Ultimately, it's simple arithmetic -- the policies of Barack Obama just don't add up to the kind of future America deserves. My economic plan creates 12 million new jobs. Jobs that will help middle class families move forward again. Jobs that will help restore the American Dream."

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