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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