Midknight Review -- new and revised: 8.3%? Not really and here is why.

8.3%? Not really and here is why.

Updated text:
HAPPY DAYS ARE HERE AGAIN: Jobless Rate Falls to Lowest in Three Years...

The jobless rate fell from 8.5% to 8.3% on the wings of 243,000 jobs created. So goes the story.

Click on image to enlarge

So, why are so many not all that excited? For starters, 36.7% of those old enough and able to work are not . . . . . . . . . working. As of this past January, we are looking at the highest percentage of non-working working class citizens since the 1930's. You may not believe this number, but 1.7 million folks left the workforce in the same month we are touting the 8.3 unemployment percentage, January, according to the Department of Labor (cf DoL pdf, p8).

The 2nd chart, my home grown adaptation of the original, actually has "Reagan" misplaced. As you well know, Reagan came into power following the Carter years and a recession with higher negatives in many categories than the current recessionary period. The Reagan Recovery saw the fastest increase in the workforce in history. By contrast, the Obama Recovery (that is what he is calling this thing, right ??) includes the sharpest decline in the size of the workforce [also] in history.

In the second year of the Obama Recovery (2010), much like the Reagan Recovery, there was an increase in the size of the workforce (April of 2010) . . . about the time Biden announced that the recession was over and introduced us to his "Summer of Recovery." But, unlike Reagan's recovery, Obama's policies failed within weeks, literally, and the remainder of the "recovery years" has been a disaster with the work force at its lowest percentage of the total number of folks able to work (63.7) in decades [see chart immediately below with Department of Labor stats, for a comparison of the past 10 year totals].

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	President
2002	66.5	66.8	66.6	66.7	66.7	66.6	66.5	66.6	66.7	66.6	66.4	66.3	Bush.. 43
2003	66.4	66.4	66.3	66.4	66.4	66.5	66.2	66.1	66.1	66.1	66.1	65.9
2004	66.1	66.0	66.0	65.9	66.0	66.1	66.1	66.0	65.8	65.9	66.0	65.9
2005	65.8	65.9	65.9	66.1	66.1	66.1	66.1	66.2	66.1	66.1	66.0	66.0
2006	66.0	66.1	66.2	66.1	66.1	66.2	66.1	66.2	66.1	66.2	66.3	66.4
2007	66.4	66.3	66.2	65.9	66.0	66.0	66.0	65.8	66.0	65.8	66.0	66.0
2008	66.2	66.0	66.1	65.9	66.1	66.1	66.1	66.1	65.9	66.0	65.8	65.8
2009	65.7	65.8	65.6	65.6	65.7	65.7	65.5	65.4	65.1	65.0	65.0	64.6	Obama..
2010	64.8	64.9	64.9	65.1	64.9	64.6	64.6	64.7	64.6	64.4	64.5	64.3	Obama..
2011	64.2	64.2	64.2	64.2	64.2	64.1	64.0	64.1	64.1	64.1	64.0	64.0	Obama..
2012	63.7												Obama..

Unemployment went down because [in part] 1.7 million people left the work force, to fend for themselves. Understand that I am telling you that 1.7 million left the official "workforce" in just one month. [In December, 50,000 dropped off the roles. In November, 350,000 left the public workforce.] Some went on welfare of some sort; the younger adult crowd moved back in with their parents; others went to work "under the table," not reporting their wages in return for not having to report their income. Still, others went to work for themselves, again, making money "under the table." More than 5 million Americans have opted out of the public workforce since Obama took office, preferring one of the several options listed above. There are 89 million able bodied adults no longer figured in the "unemployment" numbers (see ZeroHedge for more discussion).

Remember Obama coming up with the bright idea of forcing everyone who paid out $600 or more for anything, food, gas, lawn care, property clean-up, helping a family move . . . whatever, to fill out and report these transactions on a 1099 form? It was part of ObamaCare and was to go into effect this month (Jan 2012). Of course, the logistics of such an asinine provision made the law impossible to enforce, a laughable bit of idiocy coming from the fertile mind of Obama.

As an example of just how nonsensical this proposition would have been, I have a friend who drives truck cross country. With this law, he would have had to keep all receipts for diesel  and record them separately, per each gas station at which he purchased fuel, just in case he bought $600 of fuel over the course of the year from any one of those stations.

What Obama was trying to accomplish was this: he knew the workforce was "shrinking," that these folks didn't just disappear; they were making a living some way. So he tried to tax the "underground economy" (more power to those folks, btw) via the 1099 idea, a task that proved to be impossible.

Update and end notes:  the U6 unemployment number is 15.3% (folks unemployed but on benefits and those who are underemployed) or around 19 million Americans, in addition to the 89 million "doing their own thing," working in the growing labor force that is the American Underground.

Point of post: to give context to all this "good" news we heard, today (Friday, Jan 3rd)). When 1.7 million people leave the workforce in a single month, a lower unemployment rate (8.3% in this case) is hardly the good news we had hoped it might have been. . . . . . . . . . . And I haven't discussed the 2.3 million people who lost jobs in January, but, because of the process known as "seasonal adjustments," we are being told that 243,000 jobs were created. While "seasonally adjusted" might be an important process, still, 2.3 million working in December have been laid off in January.

Conclusion: its a terrible, terrible mess.

Related story: see this short CNBC video news story : SANTELLI: Here's What's Wrong With Data...

3 comments:

AnonymousFebruary 4, 2012 at 6:02 PM
The WSJ reports: The Corporate Tax Rate is lowest level since at least 1972. Today - the Dow Jones finished at a 4 yr high, the NASDAQ finished at an 11 yr high, and unemployment is lowest in 3 yrs.

You'll still hear conservatives telling us Obama is ruining the economy. Why? They are INVESTED is the FAILURE of America.

And we should go back to GW Bush, the guy who put us in this mess and who had the worst track record on jobs in modern history?
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John SmithsonFebruary 5, 2012 at 11:25 AM
The Corporate take rate, as you well know, is 35%. Obama wants to take it to 40% or more. . . . . . highest rates in the industrialized world BUT, we, also, have more legal "loopholes" than just about any other nation and Democrats are as guilty of legislating these loopholes as are Republicans. In today's congress, the GOP has made it clear that they are willing to eliminate the loopholes which would bring the effective tax rate from 12.1% back to 20 - 25 percent; problem solved. Keep in mind that GE has paid zero taxes for the past two years and its CEO, Jeffrey Immelt, is the head of Obama's jobs commission, so stop with your partisan BS.
Secondly, your last hyperlink takes us to an article written by one of your cousins, the anonymous "Staff" of the Wall Street Journal and a chart that is as bogus as records get.
For example, Clinton did not create anything, the American workforce did. Clinton lowered corporate taxes to facilitate private sector job creation task, something the man-child, Obama, refuses to do in spite of the advice of nearly all economists and Bill Clinton himself. Net jobs created during the Clinton years was 11 million. That 23 million number? 12 million were "dot com" jobs created during the “dot com” bubble and lost before the end of Clinton’s time in office, leaving Bush 43 with an 18 month recession that was mitigated via the Bush tax cuts.
The WSJ chart shows only 3 million jobs created during Bush 43 years, as if that was (a) true (the Clinton job numbers are not only inaccurate, but dishonest) and (b) a bad thing. No one gives Bush 43 credit for having to deal with an economy that took the biggest external hit in history, 9/11. The "Twin Towers" were the center of the financial world and in three hours, or so, they were suddenly gone. With that in mind, the following fact is rather amazing: during the Bush 43 years, GDP grew for 52 consecutive months, the most prolonged economic growth in history. Unemployment averaged 5.2% for the eight year period, and that included 2008. The size of the workforce averaged 66.5%, also, one of the highest totals in history. Understand, which you don't, that job creation matched population growth. Bush tried to deal with the Affordable Housing mess, although he believed in the socialist goals of Affordable Housing (Bush 43 was not a fiscal conservative; he was a macro-economist in practice) but was attacked and humiliated by the Marxist Left as someone who hated poor people. You want to forget that congressional oversight for the economy was in the hands of the Democrats, from 2007 on. It was Congressman Frank who told the nation that Fannie and Freddie were "substantially sound" just 5 weeks before the bottom fell out for those two institutions. Worst president in history? Not even close. Take a look at the charts above, and review the post's stated facts. Combine this advice with the fact that the WSJ article you liberals love to quote, was an anonymous hit on Bush 43 and was written before Obama was inaugurated (article date: Jan 9, 2009).
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Let's return the favor, shall we?

CLINTON: You cannot be civil with a political party that wants to destroy what you stand for, what you care about. That’s why I believe if we are fortunate enough to win back the House and/or the senate, that’s when civility can start again. But until then, the only thing that the Republicans seem to recognize and respect is strength. And you heard how the Republican members led by Mitch McConnell, the president really demeaned the confirmation process.

The Stated Nonsense from the Left now includes these Progressive goals:

July 2, 2008, Obama had this to say: "We cannot continue to rely only on our military in order to achieve the national security objectives that we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."

MICHELLE OBAMA: "Barack knows that we are going to have to make sacrifices; we are going to have to change our conversation; we're going to have to change our traditions, our history; we're going to have to move into a different place as a nation."

“ . . . . . . they have become a generation of activists possessed with that most American of ideas – that people who love their country can change it.” -- Obama the Radical

On September 30, Van Jones told MSNBC "I think everybody should hold onto your seats. October is going to be the turning point when it comes to the progressive fight back."