The Obama administration is touting the latest unemployment numbers as proof that the economy is improving, but analysts point to signs that those figures mask continuing weakness in the jobs market and the economy in general.
The jobless rate officially fell to a near four-year low of 7.8 percent in September, the Labor Department said on Friday, as employers added a net 114,000 workers to their payrolls. The rate had been fluctuating between 8.1 percent and 8.3 percent since January, and between 8.9 percent and 9.1 percent for 10 months in 2011.
No president has been re-elected with unemployment above 8 percent since the Great Depression, and the Obama administration hopes the jobs report, the second to last before the Nov. 6 election, will boost the president’s re-election chances.
“While there is more work that remains to be done, today’s unemployment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression,” said Alan Krueger, chairman of the White House Council of Economic Advisers.
But a number of sobering facts underlie the supposedly rosy jobs report.
- The economy has added just 87,400 jobs a month since April, down from an average of 226,000 jobs a month in the January-March quarter.
- Manufacturing payrolls fell 16,000 in September, a second straight monthly decline, while taxpayer-supported government jobs rose 10,000.
- While a survey of households showed 873,000 job gains last month, about 582,000 of those jobs were part-time positions, many of them taken by people who cannot find full-time work.
- The so-called underemployment rate, which includes part-time workers who would prefer full-time work, and people who want work but have given up looking, held at a troubling 14.7 percent last month.
- Hiring by small businesses weakened in September for a third straight month. The National Federation of Independent Business said the net change in employment per firm slipped 0.23 last month.
- Median family income has fallen about 8 percent since 2009.
Some observers even question whether the encouraging jobs numbers were cooked up by the Obama administration.
“Unbelievable job numbers . . . these Chicago guys will do anything,” former GE boss Jack Welch tweeted. “Can’t debate so change numbers.”
Ron Florance, managing director of investment strategy for Wells Fargo Private Bank in Scottsdale, Ariz., said: “The number of jobs created wasn’t that high but the unemployment rate came down and the participation rate went up a little bit, so it’s confusing.
“All in all, it doesn’t change the trajectory of what the jobs environment has been really for the last year. We continue to increase jobs but not at a rate that is fast enough to significantly change the unemployment picture for American workers.”
Jay Schalin, director of state policy analysis at the John W. Pope Center for Higher Education Policy, called the unemployment rate a “shell game” and a poor tool for measuring the economy.
By making it easier for people to drop out of the labor force, the government can decrease the unemployment rate and make the economy look better, he pointed out.
Providing Social Security disability benefits, extending unemployment benefits and promoting college education are all government tools to decrease work force participation, according to Schalin.
University of Maryland economist Peter Morici told Newsmax: “We’re not really getting a real decline in unemployment. We’re basically creating jobs at the pace that the population grows.
“But I can hear [Joe] Biden now. No one paints false figures into facts better than he does. They will be out there manipulating the truth and the economy’s just not getting better and people know it.”
Obama’s presidential rival Mitt Romney said in a statement on Friday:
“This is not what a real recovery looks like. We created fewer jobs in September than in August, and fewer jobs in August than in July, and we’ve lost over 600,000 manufacturing jobs since President Obama took office.
“The results of President Obama's failed policies are staggering – 23 million Americans struggling for work, nearly one in six living in poverty and 47 million people dependent on food stamps to feed themselves and their families. The choice in this election is clear. Under President Obama, we’ll get another four years like the last four years. If I’m elected, we will have a real recovery with pro-growth policies that will create 12 million new jobs and rising incomes for everyone.”
And Republican National Committee Chairman Reince Priebus released the following statement on the September jobs report:
"Too many Americans are still struggling for work in today's economy, and for too many families, the last four years has seen declining wages and increasing costs.
"High unemployment remains a chronic condition in America, the seriousness of which is measured not simply by one number but by the millions of families trying to make ends meet in an impossible economy.
"Americans cannot afford four more years like the last four years.
"Four years ago, Barack Obama vowed he understood our problems and possessed the solutions. With a massive stimulus, he promised unemployment below 5.5 percent by today.
"After four long years in office, unemployment is still much higher than the standard he set for himself."
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