There are fewer jobs now than during the worst of the recession

From Sister Toldjah:

Obama’s Economy: Adding “hidden unemployed” makes unemployment rate 10.5 percent

Posted by: ST on September 24, 2012 at 11:00 am 

A sobering report via Reuters:

WASHINGTON (Reuters) – When Daniel McCune graduated from college three years ago, he was optimistic his good grades would earn him a job as an intelligence analyst with the government.

With a Bachelor of Science degree from Liberty University in Virginia, majoring in government service and history, McCune applied for jobs at the National Security Agency, the Federal Bureau of Investigation and other agencies.

But after a long hunt that yielded only two interviews, the 26-year-old threw in the towel last fall, joining millions of frustrated Americans who have given up looking for work.

“There’s nothing out there and there probably won’t be anything for a while,” said McCune, from New Concord, Ohio. He has moved back home to live with his parents, who are helping him pay off his college debt of about $20,000.

“I don’t like it, it’s embarrassing. I don’t want to be a burden to my parents,” said McCune, adding that he felt like a high school dropout.

Economists, analyzing government data, estimate about 4 million fewer people are in the labor force than in December 2007, primarily due to a lack of jobs rather than the normal aging of America’s population. The size of the shift underscores the severity of the jobs crisis.

If all those so-called discouraged jobseekers had remained in the labor force, August’s jobless rate of 8.1 percent would have been 10.5 percent.

[…]

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one has fallen by an unprecedented 2.5 percentage points since December 2007, slumping to a 31-year low of 63.5 percent.

“We never had a drop like that before in other recessions. The economy is worse off than people realize when people just look at the unemployment rate,” said Keith Hall, senior research fellow at the Mercatus Center at George Mason University in Arlington, Virginia.

Ya think?

We’ve been noting all along that the official unemployment rate seriously understates the problem. President Obama rather obviously doesn’t like the 8.1% number, but I’m certain that he likes it a whole lot better than the 10.5% number which Reuters mentioned.1

But your Editor has started looking at another number. The Bureau of Labor Statistics reports it as the Employment-population ratio, and it consists of the total number of people employed divided by the civilian noninstitutional population over 16 years of age. I refer to it more simply, as the number of jobs per 100 people eligible to work. The number of jobs per 100 people declined through the major part of the stimulus program — from March of 2009 through December of 2010 — from 59.9 to 58.3, and after most of the stimulus expired, the rate has held relatively steady, fluctuating between 58.2 and 58.6,2 and is currently at 58.3. It would be a post hoc ergo propter hoc logical fallacy to assert that because the number of jobs steadily declined during the major spending part of the stimulus program,3 and became steadier after that part was exhausted, that the stimulus program actually caused the number of jobs to decline, but there certainly seems to be little evidence that the stimulus program increased the number of jobs available. Further, the expiration of the stimulus spending provisions does not seem to have had a noticeable downward push on the number of jobs.4

President Obama is out on the campaign trail, trying to tell people that things are slowly getting better under his leadership, but if the number of jobs available are any indication, then no, things are not getting better. Rather, they are actually worse than during the recession itself, and getting no better at all.
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  1. According to my calculations, the rate would be 10.6%, not 10.5%. The civilian noninstitutionalized population in August was 243,566,000. Using the December 2007 participation rate of 66.0%, the workforce should be 160,754,000. Dividing the total number of jobs reported for August 2012, 142,101,000, by 160,754,000 gives us 88.4% of the adjusted workforce employed, and a 10.6% unemployment rate. All numbers from the Bureau of Labor Statistics.
  2. These are seasonally adjusted figures by the Bureau of Labor Statistics.
  3. Part of the stimulus program consisted of various tax cuts, and they remain in force.
  4. It is worth noting that the last time the rates were below 60 jobs per 100 people was during the recession President Reagan inherited from President Carter. Despite the claims of our friends on the left, that recession was worse than the recent one, at least as measured by the population/jobs ratio; a nadir of 57.1 jobs per hundred was reached in February and March of 1983. The official unemployment rate was higher then than during the worst of the 2009 recession, running over 10% for ten straight months, climaxing at 10.8% in November and December of 1982.

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