This weekend, the Bureau of Labor Statistics reported that 157,000 found jobs last week. That number was above predictions and was received as good news for the economy by most of the media, and by Wall Street.
The news was so good that President Obama formally dissolved his jobs council on Friday as well. The presidents job council was a panel of business leaders established to field ideas to the administration on how to spur private sector job growth. The council was scheduled to dissolve 31 January, and by not renewing its charter, the president allowed it to dissolve.
But, the official unemployment rate went up and a report on Thursday showed that the U.S. economy actually shrank the last quarter of 2012. A shrinking economy means, by most economists, means recession.
The Dow Jones Industrial index closed at 14,009.79 in New York trading Friday afternoon, up 149.21 points or more than 1 percent. This was the first time that the market closed above 14,000 in more than five years. The jump was attributed, in large part, from the favorable jobs numbers.
The official unemployment rate, what the Bureau of Labor Statistics calls U3, rose from 7.8% to 7.9%. Only in the upside-down world of Obama's presidency and his cooperative main stream media can the unemployment rate go up and the economy have negative growth and it is seen as favorable economic indicators.
The government doesn't count whole classes of people without jobs into their unemployment statistics. If you've been unemployed so long that you are no longer collecting benefits, you don't count. If you've become so discouraged that you are no longer looking for work, you don't count. If you want a full time job and can't find one, so you're working part-time, you're only "marginally attached" to the work force.
There are still 4.8 million Americans in the category of " long term unemployed" defined to be 27 weeks or more out of work. These represent 39.1% of the unemployed (U3) people. The median number of weeks of unemployment is still at least 19 weeks.
About 2.6 million persons were marginally attached to the labor force, little different from a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
There were 1.1 million discouraged workers in December, an increase over November, little different from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.
Both the civilian labor force participation rate was unchanged at 63.6 percent, and the employment-population ratio, at 58.6 percent, rose 0.4 from the previous month.
The unemployment rate today would be much higher as more and more people drop out of the labor market. The government no longer figures these people into the stastistics and that keeps the official unemployment rate artificially low.
The number of persons employed part time only because they can't find full time jobs in December was 7.9 million. These individuals are often called "involuntary part-time" workers. That is at least 10.3 million Americans that are either out of work or can't find a full time job that are simply not calculated into the government's unemployment rate.
The U-6 unemployment rate includes the total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers (http://bit.ly/cUEMXl).
By the government's own reporting, total unemployment, U6, is actually 15.4%. The U6 represents a clearer picture of what our unemployment situation really is.
But, that wasn't enough for the president to keep his jobs council on the job. It had only met four times in two years and hadn't met at all in over a year.
White House Press Secretary Jay Carney said Thursday that the council "was always intended" to expire after two years, and said "the work that the jobs council did was very helpful" (http://fxn.ws/TfR5Jq).
The National Republican Congressional Committee blasted Obama saying his dissolving of the jobs council was an indicator of his lack of interest in creating jobs. "Instead of taking real action, like renewing his Jobs Council or approving the Keystone Pipeline, President Obama has moved on to his second-term liberal agenda," they said in a statement. "But with 12 million Americans unemployed and a national debt over $16 trillion, shouldn't President Obama keep his eye on the ball and work to find real solutions to create jobs and tackle our out-of-control spending?"
Today, President Obama travelled to Minneapolis to give a speech on gun control. His top agenda items since starting his second term have been gun control and immigration reform, not the economy.
The economy had -0.1% growth for the last quarter of 2012. After very modest growth since 2009, we are facing the real prospect of slipping into another recession. Fears are higher taxes for Social Security and higher rates on businesses will hit the economy when it is already teetering, causing higher unemployment and even slower growth.
Traders on Wall Street seem to have come to their senses today, as the Dow Jones average closed at -129.71 or -0.93%, giving up almost all the gains made Friday.
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