"A Note From the Commissioner"

Last Friday's release of April's employment data by the Bureau of Labor Statistics contained a couple of details that indicate how much the economy has suffered under Barack Obama, regardless of whatever problems he "inherited." It's true that the official unemployment rate dropped to 6.3%. However, as I've pointed out dozens of times, that number has been kept artificially low by the decrease in the Labor Force Participation Rate (LFPR). 

Essentially, a million more unemployed people were not officially counted as unemployed. That government-bureaucrat loophole has been the only thing keeping the unemployment rate under 10% the last several years. The LFPR in April was a modern-era worst, the lowest since 1978.

The argument has been made that the decline in the number of people in the workforce is due to Baby Boomers retiring. That's a valid argument, although incorrect. The storyline these days is that people are choosing (or being forced) to work until a later age because of financial difficulties and/or better senior health. But we have something a little more solid to go on than just common sense.

April's report showed that the number of people in the labor forced dropped by 806,000 from March to April, despite an increase in the population of 181,000. Erica Groshen, Commissioner of the BLS, said in her statement: "the April labor force decline was due mostly to fewer people entering the labor force than usual, rather than to more people exiting the labor force." 

So much for the "baby boomers retiring" excuse.

Just to keep everyone reminded, here's the graphic proof of Obama's (and Congressional Democrats') handling of employment since he took office:

LFPR since Obama took office in January 2009

One picture is worth...

The Labor Force Participation Rate measures the percentage of the working-age population who is either 1) employed; or 2) in the government system as looking for work. It does not measure those who have given up looking for work. That means, of course, that millions of discouraged workers without jobs are not officially counted as unemployed, even though they are in fact "unemployed." 

Paradoxically, the more unemployed people who quit looking for work, the lower the official government unemployment rate. 

Here, then, is the historic trend of the LFPR since Barack Obama took office. See if you notice a trend.

Labor Force Participation Rate since January, 2009

And this is why the unemployment rate under Barack Obama has managed to stay under ten percent, despite there being ten million more Americans without jobs than when he took office. (Today's false number, 6.6%)

Thanks, Obama

One picture is worth a thousand words. The Labor Force Participation Rate since January, 2003. Barack Obama took office in January, 2009. Notice a trend? Yet the latest report has unemployment decreasing. Government numbers are funny things.

Notice a trend?

Great news for Obama

The unemployment rate for November actually hit 7.0%, great news for Obama, because it's been a year since it's been that low. Even better is that the Labor Force Participation Rate, which affects the unemployment rate, ticked up to 63.0%. (The LFPR counts those in the workforce. Not in the workforce, you can't be counted as unemployed, whether you're working or not.)

As I've detailed often before, Obama has benefited from a drastic drop in the number of people who are counted in the workforce. It has kept his "official" government-reported unemployment rate below ten percent, even though millions of more people are not working than when he took office. Since a picture is worth a thousand words, here's what the LFPR has done under Obama:

Labor Force Participation Rate since January 2009

Now. Since some people will think Obama's drop in workforce participation is just a continuation of an ongoing trend, here's the LFPR for the last ten years.

Labor Force Participation Rate since 2003

Flat for several years, with a decline beginning in January 2009 that accelerated and continues to this day, giving Obama an artificially low unemployment rate that makes all the headlines.

Congratulations. If you've read this far, then you've seen something the majority of Americans have no clue about.

Obama's economy - It's worse than we think

For several years I've pointed out how the "official" unemployment rate under Obama has been artificially low, due to the increasing number of people who are not counted as unemployed. Anyone who is unemployed and who has given up looking for a job is not counted as "unemployed." Yes, it's crazy. The percentage of people working or looking for work, known as "Labor Force Participation Rate," has dropped like a rock under Obama.

The labor report for September, which has been released very very quietly, shows a terrifying statistic. In the last six months, more than two-thirds of the increase in working-age population is not in the workforce. Our working-age population has increased by 993,000 but the workforce has only increased by 321,000.

Source: Bureau of Labor Statistics

Even though larger numbers of people are not working, because of government's imaginary numbers process, the official unemployment rate has gone down.

Obama's Work (?) Force

The Bureau of Labor Statistics released the unemployment numbers for May, and the official unemployment rate has ticked back up to 7.6%. The data provide a bleak employment picture of Obama's term in office. For example, 1.7 million more Americans are considered "not in the labor force" (and therefore not considered "unemployed") than a year ago. After 4+ years under Obama, the percentage of the population working shows a trend that is frightening, and receives little attention. Here's a graphic display of it.

It's a simple equation: Fewer people working = bad for the economy. That the official unemployment rate doesn't count these people doesn't change the reality of our situation. Obama and the Democrats are driving the American economy into the ground. And Obama has almost a full term to continue his damage.

About those unemployment numbers

The government's official unemployment numbers came out Friday, and they showed an unemployment rate of 7.8%, falling below 8% for the first time in 44 months. This obviously gave Obama a boost and a chance to discuss something other than his no-show at the debate.

The unemployment numbers caught everyone by surprise. Thursday's reports had predicted a rise to 8.2%, due to several economic factors. Obama's Labor Secretary was forced to come out and defend the numbers, falling back on the "we're all professionals" defense. Convincing, except for a few anomalies.

A summary which accompanies the announcement of unemployment figures is the "Summary of Recent Trends." It's not as boring as it sounds, because of charts like this one:

A bit of explanation is in order.  The official unemployment numbers are based on the "Household Survey," based on census figures. Using that figure, the economy apparently added 873,000 jobs in September. Another metric surveyed is the "Payroll Survey" of businesses, which literally speaks to businesses to see how many jobs they've added. 

Over the entire last year, the difference between the number of jobs reported between the two is 850,000 jobs. (Nothing sinister there, they use different measurements.) However, 759,000 jobs of that difference occurred in the single month of September. 

September was quite a month. October's "revisions" should be interesting.

Obama's unemployment

The U.S. Labor Department announced today that the unemployment for August was 8.1%, down from 8.3% in July. However, that number is lower only because more people have given up looking for work, and only those looking for work are considered "unemployed." 

"The truth is, it will take more than a few years for us to solve challenges that have built up over the decades," Obama said in his speech at the Democrat National Convention last night. However, the increasing number of people not looking for work (and not counted as "unemployed,") is not a decades-old problem. 

Labor Force Participation Rate

As you can see, under Obama the "labor force participation rate" -- the percentage of the working-age population who are either working or looking for work -- started its sharp decline when Obama took office. The latest number is 63.5%, down from 63.7% in July and 65.7% in January 2009.  It is not a longtime problem that every President has had to deal with, nor a common occurrence. 

However, this horrible participation rate has occurred before, in our lifetimes.  The last time the participation rate was this low was in September 1981, as Reagan brought America out of the Carter recession.  At that time the participation rate was on its way up. Today, it's on its way down.  Four years of Barack Obama's policies have moved more and more people out of the workforce. 

Unemployment news

Today the government came out with its statistics on (un)employment in America. Here are the highlights from the Bureau of Labor Statistics:


Unemployment rate
July, 2011 - 9.1%
June, 2012 - 8.2%
July, 2012 - 8.3%


So that's improvement, right? Well, not so fast.


Labor force participation rate
July, 2011 - 64.0%
July, 2012 - 63.7%


This figure measures the percentage of Americans (civilian and noninstutitional) over age 16 who are either employed or seeking employment. Those "not in the labor force" are unemployed, but are not counted as unemployed in the government's official report. So how many more people are in that group in July 2012 compared to July 2011?


Over two million people, "unemployed but not counted as unemployed."


Added in one year.

Unemployment and the LFPR*

*Labor Force Participation Rate is the percentage of the civilian workforce that is actually employed or looking for work. On the chart below, notice the absolute crash in this rate since Barack Obama took office.  Although unemployment under Barack Obama has been high, it's actually gotten much worse since he took office, and that fact is not reported in the media.

This measurement is important, because a low participation rate hides a high unemployment rate. Here's an example of how that happens:

Under Bush
Out of 1000 people, 670 are in the workforce. 35 of those are unemployed. Unemployment rate = 5.2%.

Under Obama
Out of 1000 people, 637 are in the workforce (33 fewer than under Bush.) 53 of those are unemployed. Unemployment rate = 8.3%.

The 33 people no longer in the workforce? Although unemployed and able to work, they are no longer looking for jobs. They are no longer "in the workforce." They are simply ignored. They are not counted as part of the "official" unemployment figure. Add them back into the equation, and Obama's real unemployment rate is 15.2%, using the exact same calculation as used under Bush.

Who's really unemployed?

This video explains it.