American Elephants

Declining Wages, Declining Government Statistics, Declining Trust. by The Elephant's Child

That was President Obama, back in February, boasting about the latest jobs report which showed the unemployment rate falling to its lowest level in eight years.”Inconvenient for Republican stump speeches” as they “continued their gloom and despair tour” he chortled.  Zero Hedge points out that once again, that was then, this is now.

In yet another stunning tribute to the “accuracy” and “consistency” of economic propaganda data being reported by our government agencies, the Bureau of Labor Statistics yesterday reported a massive downward revision of the 1Q 2016 YoY real wage growth from +4.2% to -0.4% (a 4.6% swing). But we wouldn’t worry much about it because the revisions resulted in only “small” changes in the underlying data according to the BLS:

 Indexes of all hours-related measures in the business, nonfarm business, and nonfinancial corporate sectors show historical revisions because hours in the base year of 2009 were revised; resulting revisions to percent changes are small.
Revising the real Year on Year wage growth downward by 4.6% is perhaps better described as  “disastrous” or “abysmal” or even just awful. The revisions to manufacturing wages and durable manufacturing wages were far worse Real manufacturing was revised from + 2.8% down to -4.3% (-7.1%) and durable manufacturing was down by 7.5%, from +1.9 down to -5.6%. Those are really big “revisions.”
It seems impossible to get accurate information from the federal government, but that’s just me — I worry about stuff like the national debt nightmare Obama is leaving for us, and the VA which can’t seem to properly serve our veterans — while buying $300,000 worth of TVs and simply storing them, and we learned today that the VA has 167 interior designers on staff, but they can’t get around to serving patients promptly.  That sort of thing.

Communicating With the American People: We Don’t Like Being Lied To! by The Elephant's Child

“The rate of real economic growth is the single greatest determinate of America’s strength as a nation and the well being of the American people.” President Obama has not delivered a single year of 3,0% growth. The Commerce Department reported that the U.S. economy expanded at the slowest pace in two years, rising at an anemic 0.5% rate after a 1.4% fourth quarter advance. Not good, and one of the reasons why so many people are angry.

From Investors Business Daily:

Legacy: The same day the 0.5% GDP growth came out, President Obama is quoted in the New York Times saying the country has done “better” than “any large economy on Earth in modern history.” Delusional doesn’t begin to cut it.

The only real problem with the economy, as far as Obama is concerned, is that he hasn’t been selling his successful policies aggressively enough.

“We were moving so fast early on that we couldn’t take victory laps. We couldn’t explain everything we were doing. I mean, one day we’re saving the banks; the next day we’re saving the auto industry; the next day we’re trying to see whether we can have some impact on the housing market,” he told the Times’ Andrew Ross Sorkin.

Investors added that Obama didn’t “save” either industry. His only contribution to the GM and Chrysler bankruptcy process was to protect union interests at taxpayer expense. Dodd-Frank killed many, many community banks. The stimulus was an enormous expense and accomplished nothing at all.

At a townhall meeting in London, Obama was asked about what he wanted his  legacy to be after eight years.

There are things I’m proud of. The basic principle that in a country as wealthy as the United States, every person should have access to high-quality health care that they can afford — that’s something I’m proud of, I believe in. (Applause.) Saving the world economy from a Great Depression — that was pretty good. (Laughter and applause.)

Well, laughter indeed, but no applause. In early days, Obama was hailed as a great communicator. He was even awarded a Nobel Peace Prize for merely talking about peace. As Noah Rothman said today at Commentary:

The image of Obama as the left’s Great Communicator was always a fabrication. Given how often Obama himself has admitted his persuasive skills have failed his supporters, you might think this invention of a center-left media would have long ago been buried. Yet, it remains with us even today. Born out of a wish and unresponsive to falsifying evidence, the idea that Obama was somehow a marvelously successful communicator will probably be with us long after the president leaves office.

Mr. Trump’s foreign policy speech was similarly hailed as strong and wide ranging.  A lot of people believe what Mr. Trump said, and they’re wrong.

Mr. Trump: “NAFTA, as an example, has been a total disaster for the United States and has emptied our states — literally emptied our states of our manufacturing and our jobs.  Not true.

The North American Free Trade Agreement went into force January 1, 1994. According to the Bureau of Labor Statistics, these were the numbers at the end of December in 1993:

  • Manufacturing employment: 16.8 million
  • Labor force participation rate: 66.4%
  • Unemployment rate: 6.5%

These were the numbers at the end of December 2000:

  • Manufacturing employment: 17.2 million
  • Labor force participation rate: 67.0%
  • Unemployment rate: 3.9%

After seven years of NAFTA, unemployment was down, more people were in the labor force, and there were more people who were employed in manufacturing. In year 8 China joined the World Trade Organization, and problems came from that. This is when the drop in trade came. China is not a good economic partner, but the Obama administration is negotiating an investment deal with China. Either they should stop or Congress should stop them. In any case, Mr. Trump is plainly mistaken on his major arguments.

This Is Not An “Accelerating” Job Market. by The Elephant's Child

The unemployment rate for February has dropped to 7.7%, down from 7.9% last month. Total nonfarm payroll employment increased by 236,000 in February, which sounds good until you realize it’s not far from the same as it was in February 2012, when it was 271,000— a little higher. Not exactly progress.

Those who are unemployed and are not looking for work are designated by the Bureau of Labor Statistics as “no longer in the work force” has climbed to a record high at 89,304,000 up from 89,008,000 in January.

Among the major worker groups, the unemployment rate for whites 6.8 percent declined. The rate for adult men 7.1 percent, adult women 7.0 percent, Hispanics 9.6 percent, Blacks 13.8 percent, and teenagers 25.1 percent.

In February multiple jobholders rose by a record, as full-timers dropped, part-timers increased. The number of multiple job holders increased by 340K. This is undoubtedly a result of ObamaCare rules which are forcing many businesses to shift their workers to part-time. These workers attempt to recover by holding a second job.

The Federal Reserve Beige Book, a report issued eight times a year, details economic activity. Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff. Three different Federal Reserve regions have directly linked ObamaCare to slower hiring.

Just saw yesterday that J.C. Penney is laying off 200,000 employees, and that didn’t even make it into the numbers.

Tyler Durden at Zero Hedge points out that $1.2 trillion in debt buys the United State about 61 percent of the jobs created a year ago. And lest you get excited about the record Dow Jones , every “record” Dow Jones point costs $200 million in federal debt.

The Absolutely Awful August Jobs Report by The Elephant's Child
(click to enlarge)

The monthly jobs reports from the Bureau of  Labor Statistics are always confusing  for those of us who are not statisticians. If you listen carefully to the president, he says that things are not yet good, but they are improving. There are several measures of employment and unemployment, and while they are all reasonably accurate they are measuring different things. The U-3 rate, which is the one always quoted, when they say the unemployment rate is 8,3%, is a straightforward measurement of people hired and people fired (excluding farmworkers). But the actual situation is more complicated.

The size of the labor force —is not a fixed number. New college graduates, high school graduates, immigrants are entering the potential labor force. Some people retire, and some people die, some people leave the country or enlist in the military. The potential labor force is constantly growing. But what about the people who are unemployed and trying to find a job and receiving unemployment benefits?What about the people whose unemployment benefits have run out, and what about the people who have just given up looking? These are all different measurements, and all are just big-picture estimates, as accurate as they can get in a country of 315,000 citizens, and unknown numbers of non-citizens. Complicated.

So this month the U-3 unemployment rate dropped to 8.1% from 8,3% — so someone can say truthfully that the unemployment rate is better, but it’s not really an accurate portrayal of what is real. So the drop in the labor rate must be modified by the decline in the labor force (– 368,000) and the household-survey measure of employment (–119,000). Labor force participation has fallen back to a new cycle low of 63.5%.

The manufacturing sector, much heralded by the president last night, lost 15,000 jobs.  Nonfarm payrolls increased by only 96,000 in August against expectations of 125,000 or more. But in actuality you have to subtract something like 130,000 jobs to keep up with the increase in the size of the labor force. Revisions showed that June employment was revised from 64,000 to 45,000, and the change for July was revised from 163,000 to 141,000. The workweek declined to 34.4 hours, and hourly earnings edged down slightly.

The chart above is based on the original Obama administration prediction of unemployment with the stimulus.  The light blue line represents what was predicted if there was no stimulus. The red dots represent the actual U-3 unemployment rate, and the red dot up under the P in Plan represents the unemployment rate if the labor force was the same size as it was when Obama took office.  Here are the facts you need to take away:

If the number of people in the labor force was the same as when Obama took office in January 2009, the unemployment rate would be 11.2%.

If the number of people in the labor force had just stayed the same as last month, the unemployment rate would be 8.4%

The New Jobs Report for July: Not Good! by The Elephant's Child

The first report on the July jobs estimate came in today from the BLS, and the report was another disaster for American workers.  Nonfarm payrolls rose 163,000 last month as the unemployment rate edged up to 8.3%. Team Obama predicted a 5.6 unemployment rate if Congress passed the $800 billion stimulus plan.

These numbers are always confusing. The Obama administration is claiming a wonderful economic report with steady job growth. But July is the month when they do a big seasonal adjustment for births and deaths, and apparently they went for a bigger number than usual this month. 150,000 dropped out of the labor force. Here’s what you need to remember when you see these monthly figures. If you can keep these numbers in mind, you’ll know how we’re doing.

To get back to where we were in December 2007, we would need 250,000 jobs added each month for 66 months. We are missing 11 million workers — we need 11 million more people working  just to get back to what Obama keeps calling “Republicans’ disastrous policies.”

The Anatomy of a Recession: by The Elephant's Child
January 6, 2010, 1:48 am
Filed under: Domestic Policy, Economy | Tags: , ,

Here is a fascinating interactive graphic showing the geography of a recession by unemployment rate per county and how it slowly spreads across the country, beginning in 2007 — nearly a year before the recession began.   From the folks at the U.S. Department of Labor’s Bureau of Labor Statistics.

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