Back to Basics

Open for discussion while we put on a hard hat and watch out for a Friday afternoon document drop of some sort, here’s the latest jobs data:

The nation’s economy added 115,00 jobs in April while the unemployment rate dropped one-tenth of a point to 8.1 percent.

The figures are lower than a month ago and were also below what many analysts had expected.

They will add to the sense that the labor market is cooling down after months of larger growth, and come as unwelcome news for President Obama, who is formally launching his reelection campaign on Friday with rallies in Virginia and Ohio.

The nation’s labor participation rate dropped again to 63.6 percent, suggesting workers continue to leave the labor force because their job prospects are grim. The report said the employment-population ratio is 58.4 percent.

The A.P. is doing their best spinning by saying unemployment will probably dip below 8 percent by Election Day. Maybe it will, but contributing big time to the drop is the fact that the labor force participation rate is now the lowest it has been in over 30 years. In April, the number of people exiting the labor force — and therefore not counted as “unemployed” in the government’s statistics — rose by 522,000.

Here’s the labor force participation rate over the last 30 years (h/t Ed Morrissey). If you look closely you’ll see Julia giving a cheerful wave from the uncharted depths of 21st century labor force non-participation:

“Forward”?

The Washington Post Fact Checker had this discussion last week:

We spoke with John Lott, an economist and Fox News contributor who helped Norquist come up with his numbers. The gist of Norquist’s figures appears to be correct, according to our own calculations of seasonally adjusted BLS data on job openings and labor turnover.
Overall, the number of new hires has decreased slightly from an average of about 4.3 million per month during the recession to an average of 4.1 million per month during the 32 months on record since the end of the downturn. . . .
Norquist made a valid point that the number of new hires has dropped on average since the recession ended, and that’s certainly something the president needs to address. . . .

Democrats explain it like this:

Democrats argue that these numbers miss the larger point: that the economy is adding jobs overall. Indeed, our calculations show that net job turnover — new hires minus layoffs, retirements, and so forth — is positive. In fact, it’s right where it left off before the recession, with the United States averaging roughly 200,000 more jobs per month.
“There’s no question that the job market is improving,” said Jared Bernstein, former adviser to Vice President Biden and senior fellow at the Center for Budget and Policy Priorities. “It’s definitely improving too slowly, but at least let’s get the sign right. It’s not a negative right now, it’s a positive.” . . . .

I need to look into thismore, but it is curious.

New Jobless Claims Understated 56 of Last 57 Weeks Given the difficulty of estimating economic data it is common practice for government agencies to announce a preliminary number subject to later revision. Under the law of averages, estimates should balance out between being higher or lower than later revisions. Amazingly, though, the Obama Department of Labor’s preliminary estimates of new jobless claims have been lower than later revisions in 56 of the last 57 weeks. The odds of this happening by chance are infinitesimal. This oddity was explained by Labor Secretary Hilda Solis. “We feel it is better to err on the side of optimism,” she said. “The preliminary estimate is widely reported. The subsequent revisions are rarely noticed. By adding a bit of sheen to the preliminary estimate we feel we are helping to boost morale. We believe that good morale is an important building block for positive change.” “Making the economy look better will make people feel better,” Solis went on. “If people feel better they are more likely to support the policies of the Administration, which we feel is crucial if we are to be given the opportunity to continue on the path laid out by the President for another four years.”

My newest piece at Fox News starts this way:

Call it the phantom jobs that never were. Prior to the rather anemic 120,000 jobs created in March, the media has been going on and on about the over 200,000 jobs that have been created over the previous three months, the actual number of jobs was falling – yes, that is right, falling, dropping by an average of about 290,500 per month. The number of people working in March was fewer than the number of people working when Obama became president in January 2009 and essentially unchanged when the recovery started in June 2009. There are two ways of measuring the number of jobs: a survey of households and a survey of employers. But no matter how you measure it, the answer is the same: there has been no job growth under Obama. But you won’t hear this depressing information on the news because everyone reports what are called the “seasonally adjusted” employment numbers, not the actual number of jobs. . . .

The part of the latest jobs report that the Obama administration might single out is that the unemployment rate dropped to the lowest level in three years. They won’t, however, be trumpeting the reason for the drop.

There is the obligatory “unexpectedly” in the report as well:

Employers added 120,000 jobs last month, the Labor Department said on Friday, the smallest increase since October.

Economists polled by Reuters had expected nonfarm employment to increase 203,000 and the unemployment rate to hold at 8.3 percent.

The slowdown in employment growth last month likely reflected the fading boost from unseasonably warm winter weather.

The drop in the unemployment rate, to the lowest level since January 2009, reflected a drop in the labor force. The separate household survey, from which the jobless rate is derieved also showed a drop in employment.

The number of persons not in the labor force returned to an all time high, which chipped a tenth of a point off last month’s unemployment number (h/t Zero Hedge):

Hiring slowed in March as well:

Also, remain on high alert for QE3, though it appears less likely now:

The painfully slow recovery in the labor market is a concern for Fed Chairman Ben Bernanke, who is keeping open the option of further monetary policy support for the economy if the unemployment rate remains stubbornly high.

The White House comments on the March jobs report: “There is more work to be done.”

I was afraid they were going to say that.

You can be pretty sure that in the White House this story is going to make somebody realize a huge mistake was made — the taxpayer subsidy should be way higher than just $10,000 per car.

From the Detroit Free Press:

General Motors has told 1,300 employees at its Detroit Hamtramck that they will be temporarily laid off for five weeks as the company halts production of the Chevrolet Volt and its European counterpart, the Opel Ampera.

“Even with sales up in February over January, we are still seeking to align our production with demand,” said GM spokesman Chris Lee.

Hopefully during the downtime the entire project will be re-tooled to put the cart after the horse where it belongs, but I’m not counting on it.

At the next Council on Jobs and Competitiveness meeting, President Obama’s going to have to tell Immelt to step it up a notch.

Help is on the way, however, because Obama said he’s going to buy one when he’s no longer president in five years (if workers want to boost sales quicker they’ll vote Republican in November so Obama can buy one this coming January).

The plant in question is the same one Obama visited in July of 2010 to tout the Volt:

One of the many challenges for Team Obama this year is to try and lower expectations from 2008′s “yes we can” down to a slightly more reality-based “re-elect me and I’ll try and get you your house back.” The motivation for doing so comes with the knowledge that, no matter how much lip service is paid to “economic recovery” or how the media helps do the spin, it just doesn’t seem to be happening — at least not at a pace fast enough to keep Obama from having to move back to Chicago next January.

From CNS News:

Unemployment in the U.S. rose to nine percent in mid-February, up from 8.3 percent a month earlier, according to a new Gallup survey. The polling company said this suggests that it is “premature” to assume the economy will not feature prominently in the 2012 election season.

Gallup figures typically provide an indication of what the government will report at the end of the month.

“The U.S. unemployment rate, as measured by Gallup without seasonal adjustment, is 9.0% in mid-February,” Gallup said in its mid-month unemployment survey, released on February 17. “The mid-month reading normally reflects what the U.S. government reports for the entire month, and is up from 8.3% in mid-January.”

Couple this with the outlook for gas prices this year and Obama risks seeing what’s left of his favorability crumble like peanut brittle in Michael Moore’s back pocket.

And then there’s this addendum from Gallup:

“Regardless of what the government reports, Gallup’s unemployment and underemployment measures show a sharp deterioration in job market conditions since mid-January.”

It’s almost as if Gallup expects the government to go extra overboard massaging and spinning the numbers as the election closes in. They wouldn’t do that, would they?

(h/t AoS)