By now you’ve probably heard the news on this month’s unemployment report from the Bureau of Labor Statistics (BLS). At first blush, it sounded decent, but not good: 117,000 jobs added, unemployment down 0.1% to 9.1%. And that’s how I called it on Twitter.
If you listen to Rush or to Jim Pethokoukis, you know a bit more of the truth. Labor force participation rate is down to 63.9%. Employment-population ratio is down to 58.1%. 193,000 people left the workforce in July. And if the active labor force was even as big as it was when President Barack Obama (D-USA) took office, the unemployment rate would be 11.7%. That’s bad. And that’s how the market is reacting.
The truth? It’s worse than that. Much worse.
Between May and July, the number of employed Americans shrank by 483,000. To put that in perspective, since last July, the number of employed Americans only grew by 400,000. In the last two months, we have erased over half the gains of the entire last year. If we have another two more months like this, we’ll erase the entire gains of the last year.
If that sounds like the economy is improving to you, then you’re delirious.
And that doesn’t even take into account the amount the labor force should be growing every month just due to the birth/death rate in the United States. We need to hire 125,000 people every month (about what we did last month) just to keep pace, and to keep the unemployment level at about the same. In other words, a gain of 125,000 jobs represents a net gain of 0.
Adding in that little tidbit of information, and now instead of being down 483,000 jobs the last two months, we’re down 733,000 (net). Instead of being up 400,000 since last July, we’re down 1,225,000 (net).
You can try to spin this positively, and I’m sure the White House and our compliant media will, but these numbers are awful.
As I said on Twitter, if a cancer patient was recovering like this economy, the doctor would be talking with the family by now about “preparing for the future”. That’s how bad these numbers are.