Reuter’s heralded the 9.7% January figure as “encouraging”.  Many of the major networks and newspapers also repeated this sentiment, but they only reflected the lack of “intellectual curiosity” that has become common place in media discussions on the economy.  They ignoring of important qualifying data and  the Obama administration straining  to spin this as progress.  

The .3% decrease in the unemployment rate is more due to the increasing number of  people “who have given up looking for work”.  No one really knows how many of them have given up looking work, this is based on a reduction in unemployment claims.  The U6 number is almost 18%, based on these and those who are severely underemployed. 

Also, the decrease in the general figure is based on a smaller number of overall jobs available.  Rick Santelli, a political and economic analyst,  declared that the real unemployment figure is 10.6%.  This is because the Labor and Commerce Departments (why do we need both), announced that the total pool of jobs in the nation has been revised down from 136 million to 129 million.  That pushes the unemployment rate down, even if there is no net increase in new hirings.

Also, the administration says that they missed 800,000 job losses from 2009, bringing the number of total jobs lost during this recession to 8 million.  Also, the average rate of unemployment before this recession wa seven weeks.  Now, the average length of  unemployment is seven eight months.  And how can the figure go from 10 to 9.7 percent when the nation lost an addition 20,000 jobs last month.  And how can Obama’s supporters just accept this without question?

Reuter’s called the economic news encouraging after reporting the number of job discouraged job seekers has increased from 734,000 to 1.1 million.  How is that encouraging.  It may be good news for the Statists, because they hope it will mean more people who will embrace their attempts to nationalize the private sector. 

Also, what has not been yet been is that after a massive increase in job losses from November 2008 to mid 2009, most of the vulnerable workers have already lost their jobs or have been forced into reduced employment.  That means the reduced rate of job losses per month  is not because Team Obama did anything, it is because the pool of expendable workers is so much smaller.  Companies are laying off  their second and third payroll accountants, their special products service personnel, and their superfluous marketing positions. 

The people still working are those the firms absolutely need to stay in business.  How do we know this?  Labor productivity was up 9.5% last quarter.  The private sector simply did more business without hiring more people.  And this is figure is actually does not give them enough credit, as the federal government increased it’s employment while raising it’s average wage by 3%, during this struggling economy.  Meanwhile state governments had to lay people of by the thousands, as they cannot print money to pay their expenses.

By definition, this practice reduces overall gross domestic productivity, putting a drag on the private sector.  We estimate that if the federal government followed the same standards of efficiency that the private sector used in Q4, then labor productivity could have been as high as 13%.

The only thing encouraging  about these new unemployment figures is how well the private sector is doing IN SPITE OF this punitive administration and it’s Statist cabal.

Categories: Uncategorized
  1. February 9, 2010 at 3:12 am


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