“President Obama praised the latest jobs report,” write ABC News' Tom Giusto and Rachel Martin. The column goes on to quote the president as saying:
Today is an encouraging day. We learned that the economy actually produced a substantial number of jobs instead of losing a substantial number of jobs. We are turning the corner.
Before you start popping corks, you should know that the dateline on that article is April 2, 2010. It provides a cautionary context to an Associated Press blurb on Obama’s reaction to the latest latest jobs report. On February 3 of this year, he told reporters, “The U.S. economy is growing stronger and the economic recovery is speeding up.”
But this time, we are assured, the cause for rejoicing is real. Here’s Katrina vanden Heuvel writing in the Washington Post several days after the president spoke:
The January jobs report—243,000 jobs added—was greeted with widespread relief. The economists over at the Wall Street Journal were virtually giddy: ‘a game changer,’ ‘positive report in really every way,’ ‘strength is everywhere,’ ‘a blow-out number.’ Liberal analysts celebrated its effects on Obama’s reelection prospects. Matt Yglesias hailed ‘recovery winter,’ arguing that barring ‘some tragic unforeseen disaster,’ we ‘should be in for … accelerating growth that put(s) us back on the path to full employment.’ Ezra Klein concluded that the report— ‘all good’—contained ‘the sort of numbers that win elections.’
Game, set, match. With “Recovery Winter” raining dollars down on us, can prosperity be far behind?
The answer depends on who you ask. If you ask former hedge fund manager Bruce Krasting, you get the distinct sense the government is telling the American people less than the whole story. On his blogMy Take on Financial Events, Kasting writes:
The Labor Force Participation Rate (LFPR) is a key economic statistic today. Changes in the LFPR are shaping the direction of the capital markets, federal economic policy, monetary policy and, most importantly, politics.
The LFPR hit a new record low on Friday. The key question that must be answered is: Is the current LFPR a temporary phenomenon, or is this the ‘New Normal?’
Another blog, Zero Hedge, quantifies this metric, complete with a graph. The author’s conclusion is that the LFPR has fallen to a 30-year low. The civilian labor force lost an unprecedented 1.2 million participants in January—the same month that produced the BLS jobs report that has liberals dancing in the street.
The reason for the disparity between the White House’s reading of the jobs report and realists like Kasting and Tyler Durden of Zero Hedge is that the Bureau of Labor Statistics does not factor LFPR into its equation. An article at The Blaze.com suggests the BLS may be cooking the books and cites an email from Reagan budget director David Stockman that claims
the reports are so massaged, estimated, deemed, revised, re-bench marked and seasonally adjusted that any month-to-month change has a decent chance of being noise. What deep secret might they be hiding?
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