With the release of the September jobs report, the new number du jour that is on the tips of the tongues of the national punditry is 7.8. According to the Labor Department, the unemployment rate in America dropped to 7.8% in September, marking the first time in nearly 4 years that the number has dipped below 8%. It was a badly needed bit of good fortune for President Obama, who is still reeling from a narcoleptic debate performance that lit a fire under Mitt Romney’s ass for the first time in about two months. Employers reported the creation of 114,000 new jobs this past month, which was couple with revised numbers showing July and August job gains to be much higher than previously expected. And, according to a survey of US households, 873,000 more Americans reported having jobs in September, along with a 456k decrease in the number of folks saying they want work, but can’t find any. Despite what unemployment truthers say about the matter, there is no denying (within the boundaries of reality) that this drop in unemployment is due, at least in part, to increased job growth over the past month. Whether or not that growth is indicative of broader economic change is certainly a matter for debate, but the numbers themselves are not.
If you go beyond the paranoid, grassy-knoll stained glasses of Roger Ailes’ minions at Fox News, you find that there are actually a number of legitimate concerns that can be levied against these recent job numbers beyond, “they’re made up.” While the job numbers are encouraging, there’s very little to suggest that this .3% drop is a sign of vibrant economic recovery. To simply blurt out that Obama and his cronies in the Labor Department faked the numbers is not only ignorant, but lazy. To be sure, this isn’t the news that the Romney campaign was hoping to hear this morning, but it’s far from a definitive endorsement of Obama’s recovery plan.
On his Wonkblog, Ezra Klein posted a series of charts that help explain the long term trajectory of America’s economic progress during Obama’s presidency and shed some light on how these most recent job numbers fit within the broader context of a post-recession United States. Upon looking at the graphs, a few things become abundantly clear:
- Barack Obama inherited a flaming pile of economic dog crap: When President Obama took office in January 2009, the US had just experienced it’s worst year in terms of unemployment since 1945, shedding a staggering 3.47 million jobs in the last six months of the Bush White House, with 760,000 of this lost jobs coming in January of 2009 alone. The way I always think of the Bush-Obama transition is like the opening scene of Goldeneye (stay with me). For those of you who aren’t Bond fans, our man James has to escape from an evil Soviet compound and somehow finds himself jumping off of a massive cliff on a motorcycle, with the intent of somehow switching in mid-air from the bike to an unmanned propeller plane that had flown off the cliff only moments before. So, Bond has to find a way to plummet earthwards fast enough to catch up the plane before jumping in the cockpit and pulling it out of a nosedive, which he does because he’s James Bond. When Obama came into office in 2009, George W. Bush had just driven the proverbial plane off the cliff. The momentum of the recession carried Obama down for another year before enough stability returned to the economy to enable job growth.
- Things have moved, really, really slowly: Since reaching a peak of 10.1% in October of 2009, the unemployment rate has steadily decreased to its current level of 7.8%. It has been gradual improvement, to say the least and has never generated much excitement or confidence in the strength of the economy. With that being said, jobs have been added for the past 24 months in a row and there are currently 325,000 more jobs today than when President Obama took office. And, more than anything, investors have to be encouraged that US economy isn’t showing any signs so far of being severely effected by the financial crisis in Europe or slacking production in China.
- Unemployment decline doesn’t necessarily mean economic recovery: This past month, the labor force participation rate remained level at 63.6%, which is a key indicator that the fall in September unemployment numbers was the result of an increase in jobs and not a decrease in potential workers. According to the way the federal government calculates unemployment, the only people who are counted are those who have had a job within the past 12 months and who are still actively seeking employment. Using such a measurement, it’s possible to unemployment rates decline due to workers dropping out of the labor force rather than reentering it. Since taking office in 2009, the rate of labor force participation has dropped by nearly 2%, which means that there are millions of Americans who have given up on the idea of looking for work within the past 4 years.
- Not all jobs are created equal: Last month saw an massive increase in the number of workers who are working part time jobs against their wishes. In September, 582,000 Americans worked part time jobs because they could not find full time employment or because their employer cut their hours. This number doesn’t show up in the unemployment rate as these people are still considered to have jobs, even if those jobs aren’t able to support their costs of living. With all of the talk of unemployment over the past 4 years, not nearly enough attention has been paid to the plight of the working poor in this country. According to the Department of Labor, 10.5 million Americans (7.2% of the labor force) were employed, yet did not make enough to get above the poverty line.