The October 2012 jobs report is in from the Bureau of labor Statistics and the news is not good for Barack Obama. The U-3 unemployment rate increased to 7.9% while the U-6 rate of unemployed and underemployed dropped one tick to 14.6%. Breaking down the numbers, 171,000 jobs were added in the non-farm private sector, offset by a decline of 31,000 government jobs. Roughly 600,000 unemployed Americans re-entered the labor pool seeking work, increasing the Labor Participation Rate to 63.8%. However, more than 400,000 of these job seekers found no work, thus explaining the increase in the U-3. The drop in the U-6, according to the Labor Department results from most of the new jobs created in October being only part-time or temporary in nature. But as we delve deeper in the report, we find very bad news for Obama.
The unemployment rate for blacks increased, and for most other ethnic, racial and gender groups remained steady. Only Asians saw a decline in their unemployment rate. Also remaining steady are the long-term unemployed whom have not worked for 27 weeks or longer. While the labor participation rate rose, the overall ratio of employed-to-population remained unchanged at 58.8%. Finally, perhaps the saddest of news, the average income of hourly workers fell by 1% in October. I do find it interesting that when 800,000 leave the jobs market, the unemployment rate falls 0.3% but when 400,000 re-enter and cannot find work, it only increases 0.1%.
So much for the Obama Recovery of the economy. As we enter the final weekend of his reelection campaign, Obama and his surrogates will undoubted attempt to highlight the job growth, even though it is still well below the 250,000 to 300,000 new jobs per month we would typically see at this point in a post-recession recovery. Mitt Romney and his troop of supporters will naturally use the October 2012 jobs report as another sign of the need for a new direction and new leadership. Obama′s latest campaign pitch is to create a Secretary of Business and create yet another new bureaucracy. Oddly enough, just two days ago, Obama promised New Jersey Governor Chris Christie that he would cut the red tape of federal bureaucracy to speed relief efforts for Hurricane Sandy victims. This, of course, plays into Mitt Romney′s argument that was is needed is to reduce federal bureaucracy across the board permanently.