What the 7.8 percent jobless number really means
Barack Obama must have gotten a small measure of glee from the fact that the U3 unemployment number dropped to 7.8 a couple of days after he suffered an absolute shellacking in the first presidential debate. Here was something he could spin into good news, to distract attention from a debate performance so humiliating that even the left and the media turned on him.
Instantly, however, those in the commentariat with a shred of intellectual honesty raised an eyebrow to the numbers reported. The Labor Force Participation Rate is still at multi-decadal lows. the U-6 unemployment rate is unchanged at 14.7. So what happened?
John Lott has the answer, and Barack Obama’s desperation for good news notwithstanding, the jobs report is not good news.
First, full-time employment actually fell. The increase in employment came from a large upswing in part-time jobs.
While total jobs rose by 114,000, people who are classified by the Bureau of Labor Statistics as “part time for economic reasons” soared from about 8 million to 8.6 million, a 581,000 increase
The increase in part-time jobs did not occur for happy reasons:
There are two different reasons for this. Some job seekers have had to settle for only part-time jobs because they have failed to find full-time employment. Other workers who have stayed at their old firm have found that their jobs were downgraded from full-time to part-time status due to a downturn in the demand for the firm’s products.
This is not a sign of health in an economy. This is a sign of stagnation or worse.
Second: As has been the case with most of the jobs reports we’ve had recently, the increase does not even keep up with population growth:
Last month there was a net gain of 114,000 jobs. But with an expanded working age population of 206,000 and 63% of those working, 131,000 jobs would have had to be added to keep the fraction employed from falling.
Lott’s conclusion is tamely worded, but when you think about it, deeply foreboding:
A drop in full-time employment of 216,000 shows that the economy is still not performing well. The lower unemployment numbers do not reflect more people working so much as they show Americans being forced into part-time work.
If this is where America is headed after four years of Obama, imagine four more.
It doesn’t have to be this way. November 6th is a month away.