Why Did the Unemployment Rate Go Down?
Tags: Obama Depression, Unemployment.
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Lots of reasons – and Mish’s has them. Read the whole article – meanwhile, I’ll nutshell it:
1. The government hired 12,000 people in July
2. The auto sector added 28,500 people in July
3. The employment to population ratio dropped to 59.4% from 59.5% (it was 61% in January)
The auto sector was the actual bit of good news – but “cash for clunkers” was clearing out some inventory and the number of new cars available may have dropped so low that it was ok to bring some of the workers back. We’ll see if they keep their jobs for even 6 months.
The federal government has been hiring like mad and adding 12k to the census bureau was probably a swift way of doing something to help the jobs picture look brighter, as well as pay off some ACORN troopers.
The employment to population ratio is the most important – when we speak of a drop of a tenth of a percent, we’re likely speaking in terms of at least a couple hundred thousand people. Fundamentally, with that many people just calling it quits, its small wonder that the official unemployment rate dropped.
Obama might be able to keep this going for a bit – pumping up the employment numbers by adding government employees while the Bureau of Labor Statistics keeps dropping people from the rolls of both the work force and the unemployed workforce as people give up and/or lose their benefits entirely. But this can only be done for two or three months, tops, before the unemployment number starts to rocket back upwards. July was month one – August is month two. By October, at the latest, the unemployment number will start to rise again.
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9 Responses to “Why Did the Unemployment Rate Go Down?”
Caucus of Corruption
This post is the essence of all you have left. Imagine if someone on the left had written such a thing in 2007?
markployment
the orbital obamians learned that hire govt worker trick
from the bush administration……
right?
wrong
In the world of pain, figures DO shift, assume different defintions and meanings. So possibly in such a bleak and murky world, an employment to population ratio of 59.4% might be construed to mean, oh, pretty much anything the hate-driven pathologies of the pitchfork degenerates might decide they wanted it to mean.
But in the real world, of real people, the figures are the figures. And all the painfully ignorant and painfully hate-filled and painfully crazy can do is ignore them or try some silly crap like the above posts.
Sad, yet oddly amusing……….
Those new government employees might want to start updating their resumes because they’ll be looking for new jobs come 2012.
You guys do know that the unemployment rate is a lagging indicator, right and won’t improve substantially until after the economy starts to rebound, right?
Look to the leading indicators, which (with a couple of exceptions) are looking pretty good. (Hell, the stock market is 50% off of its bottom)
ranafuerte,
If it’s looking good already, and the majority of the stimulus money hasn’t been spent yet, then can we agree that it was a waste to spend over a trillion dollars on something unneeded which simultaneously risks increasing inflation?
If it recovers too quickly, Obama is a liar and extravagant spender of taxpayer money. If it recovers too late, Obama is an incompetent. Obama needs to have the economy recover in late September of 2010.
Rana,
The recession would have lasted 6-8 months had we not passed the original stimulus package in October, after the previous two stimulus packages failed to stimulate anything beyond Keynesian wet dreams. I have to disagree that the indicators are good, they’re not even encouraging and the market recovery may indicate a continued bear market.
Mark,
To clear up a misconception you posted on another thread; unemployment compensation plays no part in the unemployment numbers; each state calculates differently, so compensation payments are a poor indicator of employment. Consider this, if you are fired for cause you will be deemed ineligible for unemployment in most states but you will still be counted as unemployed by the BLS. That’s why new claims for unemployment is reported separately.
Unemployment numbers are based on a survey and the numbers are extrapolated; it’s been a guess for years. The more important number is the Employment Number which you pointed out has dropped.
observer, you are exactly right. The recession would have cleared itself anyway, and much if not most of what we are seeing now is in spite of the enormous debt laid upon Americans for generations forward, not because of it.
And don’t you think a little thing like stripping investors in GM of their investments to pay off unions had a chilling effect on the stock market? Where can you invest if you have to worry that your invesment choice will come onto the radar of an out-of-control Central Commttee which can take your money and give it to those who ensure its ongoing power?