The headline for today’s employment report for the month of June reads “Employment Increased by 223,000 in June, and the unemployment rate declined to 5.3%.” It’s hard to believe that that headline, and the headline of this blog post were both taken from the same report, isn’t it? Well they were. And I could have added to my headline a couple more facts: that the employment figures for April and May were revised downward by 60,000 and that there were no wage gains in June.
In fact, that headline figure of 223,000 jobs added in June, taken from the establishment survey, is probably the only positive in the whole report. (If it can even be believed.) The positive from the household survey – a drop in unemployment to 5.3% – falls apart when you see why it dropped. It seems that 432,000 long-term unemployed have simply given up looking for work. Put them back in the equation, along with the other workers who previously and mysteriously vanished from the work force, and unemployment actually rose to 8.8%.
In November of 2007, 48.4% of the U.S. population participated in the labor force. Since then, the U.S. population has grown by 19 million, but only 16% of them have been added to the labor force. This is how the Obama administration has been able to claim a sharp drop in the unemployment rate – by understating the size of the labor force. Here’s a chart of per capita employment since November, 2007: Per Capita Employment. While per capita unemployment has improved from the depths of the recession, it’s still at a deeply recessionary level.
One of the less-noticed statistics in the report, but perhaps the most telling about the state of the economy, is that employment in manufacturing was flat yet again in June. In a separate report this morning, factory orders fell for the ninth time in ten months, and new factory orders and shipments are running 6% and 4% behind year-ago levels.
The Obama administration has continued the practices of previous administrations that exacerbate the demise of the middle class through immigration policy that floods the labor force with unneeded workers and trade policy that is detached from the realities that drive trade imbalances and turns a blind eye to a $600 billion/year trade deficit in manufactured goods.