The November employment report, just released this morning by the Bureau of Labor Statistics (link provided above), was so bad that the most difficult task I faced in writing this post was choosing which piece of data to highlight in the headline. The fact that per capita employment has fallen to match the lowest level of the recession? Or the fact that unemployment by any honest measure (one that doesn’t use the “mysteriously vanishing labor force” trick to hold the numbers down) has risen to nearly match the highest levels of the recession? The fact that the number of unemployed workers rose to 18.9 million? Or the fact that the employment level (the number of people working) fell for the third month in a row and for the sixth time in the last seven months?
In the end, I decided to simply sum it all up as a “cold slap in the face” for economists and the administration. So much for the slowly rebounding economy.
The “expert” economists were forecasting that the economy added 168,000 jobs in November. Instead, if you believe the rosy figures of the “establishment survey” upon which this data is based, the economy added only 39,000 jobs. The more thorough and accurate household survey reveals that the economy actually shed another 173,000 jobs in November (the sixth decline in seven months), boosting unemployment to the official rate of 9.8% or, using my more accurate calculation, 12.0%. The “expert” economists may be shocked at this data, but anyone who understands my theory of population density and has been following this blog should have been expecting it.
Here’s the data:
And here are charts of the data:
Notice how my calculations of unemployment – “U3a” and “U6a” – correlated perfectly with the BLS’s calculation until the recession escalated, at which point the BLS began holding down the numbers by resorting to the “mysteriously vanishing labor force” trick, or simply assuming that so many people dropped out of the labor force, apparently no longer needing a source of income. (Hoping that you believe such things.)
The additional 39,000 jobs reported by the establishment survey break down as follows:
- professional and business services temporary help: + 40,000
- health care: + 19,000
- mining: + 6,000
- manufacturing: – 13,000
- retail: – 28,000
It’s worth noting that the decline in manufacturing employment is the fourth consecutive month of declines, correlating perfectly with the steadily rising trade deficit and hi-liting the futility of Obama’s plan to boost manufacturing employment by doubling exports in five years.
Think this is bad? It’s going to get worse. The stimulus program is winding down, Congress is under pressure to cut spending, taxes are likely to rise and, worst of all, the administration has proven absolutely gutless in doing anything to improve our balance of trade. Raising taxes and cutting spending, while necessary to head off a bigger economic disaster down the road, in the short term add up to taking money out of the economy, a recipe for a double dip recession. Or worse.