The September employment report (link provided above), released this morning by the Bureau of Labor Statistics (BLS), contains some good news but otherwise is consistent with an economy stuck in the “new normal” of 9% unemployment.
The headline numbers are so-so: 103,000 jobs were added, better than what was expected but not quite enough to even keep pace with the growth in the labor force. So unemployment remains stuck at 9.1%. The best news is that the employment level rose by nearly 400,000 to just over 140 million people – the biggest jump since April, 2010 and the highest level since June, 2009. Of course, the bad news is that, since June, 2009, the population has grown by nearly six million and the labor force has grown by 2.7 million. As a result, we now have over 18.5 million unemployed vs. 15.8 million in June, 2009.
The unemployment rate remained stuck at 9.1% in spite of the employment level growing by 398,000 jobs because the administration took the opportunity to release 423,000 unemployed workers from its “mysteriously vanishing labor force” bank of people who supposedly gave up looking for work. Isn’t it interesting how each rise in the employment level is matched by people who suddenly decide to start looking for work again? If you look at my calculation of unemployment, you’ll see that my calculation exactly matched the BLS’s until Obama took office in January, 2009. Immediately, workers began “vanishing” from the labor force, artificially holding down the BLS’s U3 calculation of unemployment and effectively “capping” it at about 9%. Truth be told, the real rate (my U3a calculation) is 11.7%.
Here are my charts of the unemployment rate, employment level, number of unemployed and per capita employment:
One bit of bad news is that manufacturing employment fell by 13,000 in September, the second decline in a row. The president was banking on the manufacturing sector leading the economy out of recession, vowing to double exports in five years. What we’re seeing is that, although he’s more or less on track to meet that goal, imports (which he’s completely ignored) are wiping out other manufacturing jobs just as fast as exports create them. The result is that the economy is mired in recession and Obama is watching his chances of re-election sink along with his approval ratings.
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Here’s a breakdown of those 103,000 jobs added, according to the establishment survey of the report:
Professional & business services: + 48,000
Health care: + 44,000
Construction: + 26,000
Retail: – 9,000
Manufacturing: – 13,000
Government: – 34,000
The jump in construction employment, the first in a long time, is a good sign. What’s not a good sign is the continuing growth in health care employment, since health care costs are a drag on the rest of the economy and that’s one place where it would be nice to see employment declining as other more productive sectors take over (which isn’t happening either). An economy built on caring for the sick is a sick economy.