As detailed in the above-linked June “Employment Situation Summary” from the Bureau of Labor Statistics (BLS), only 18,000 non-farm jobs were added in June while the unemployment rate ticked upward again to 9.2%. Those headline numbers alone were disastrous, when economists were expecting 105,000 jobs and a slight decline in the unemployment rate – expectations that were already pessimistic, given that the economy needs to add about 150,000 jobs a month just to keep pace with growth in the labor force, and that the economy needs to add several thousand per month to begin making real progress on reducing unemployment.
But, look into the details and the report is much, much worse. Here are the “low-lites”. (There are no “hi-lites.”):
- In contrast to the claim that 18,000 jobs were added, the “employment level” – the number of Americans employed – actually plunged by 445,000. That’s the worst decline since December, 2009. The employment level is now at its lowest since January of this year.
- The number of unemployed Americans in June tied the worst level of the recession at 18,917,000, a mark previously reached in November of 2010.
- The “official” unemployment rate (the BLS’s “U3” calculation), now at 9.2%, is the highest rate since December, 2010. Given the plunge in the employment level, why didn’t it rise more than just 0.1%? Because, once again, the BLS relied on its old trick of claiming that the civilian labor force shrank by another 272,000 workers. According to the BLS, the civilian labor force, now 153,421,000, is smaller than it was in November, 2007, in spite of the fact that the U.S. population has grown by nearly 10 million people (about five million workers) during that same period. Truth be told, the “real” unemployment rate (my “U3a” calculation that holds the civilian labor force at a steady percentage of the population) rose by 0.4% in June to 12.0%, matching its highest level since the beginning of the recession.
- Per capita employment (the employment level divided by the population), fell for the third month in a row, only 0.02% above the lowest levels of the recession reached in December 2009 and matched in November, 2010.
- While the BLS’s broader measure of unemployment, “U6,” rose by 0.4% to 16.2% in June, it too was kept artificially low by the “vanishing labor force” trick. My “U6a” measure rose by more than 0.6% to 21.2%, just shy of its worst level of 21.3% reached in November, 2010.
The following is my calculation, followed by charts of the above data:
As I predicted, now that the stimulus programs have ended, the economy is quickly plunging back into recession. It isn’t hard to imagine that matters will get much worse when Congress finally agrees to a debt-reduction plan consisting of job-killing tax increases and job-killing spending cuts.
President Obama has failed to turn the economy around. The employment level has fallen by three million workers since he took office. Real unemployment has risen by 50%. Five million more Americans are now unemployed. It’s no mystery. He’s failed to take action on the only two matters that could change this situation – fixing our trade and immigration policies. He’s stood idly by and watched as our trade deficit exploded back to near pre-recession levels and has done nothing about immigration policies that have continued importing more workers while jobs have continued to decline.
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Where are those 18,000 jobs that the BLS claims were added in June? Here’s the breakdown from their establishment survey:
Leisure and hospitality: + 34,000
Professional and technical services: + 24,000
Health care: + 14,000
Mining: + 8,000
State & local government: – 25,000
Federal government: -14,000
That doesn’t add up to + 18,000 but the BLS offers no explanation for the discrepancy. The growth in health care employment is slowing. The decline in government employment is likely to accelerate in the months ahead. And two of the biggest sectors of the economy – manufacturing and construction – are contributing nothing. There are no good signs anywhere in the entire report.