Friday’s ‘official’ jobs figures from the Federal government state that the U.S. unemployment rate held steady at 9.5% in the month of July. However, American had a net job loss of some 131,000 jobs in July. And that is just an estimate! The program used by the Bureau of Labor Statistics (BLS) ‘assumes’ that a certain number of jobs are created each month by small businesses which cannot be easily accounted for.
On Thursday, we got the bad news that initial jobless claims for the previous week ending on July 29th, 2010, was 479,000, up 19,000 from the previous week and far more that what ‘economists expected’. We also learned last week that there were sharp increases in the long-term unemployment numbers, especially in those out of work for six months or longer, as well as some 1.4 million Americans who have exhausted their unemployment benefits.
When we read the BLS report in more detail, the picture gets even bleaker. While some sectors gained jobs, claiming an increase in private sectors jobs of 71,000, much of this is due to the auto industry not having their annual seasonal lay-offs for model-change-over. This accounts for approximately 21,000 jobs.
Moreover, I really love how the BLS defines ‘employment changed little’ as it tells of how professional businesses services LOST 13,000 jobs, Financial services LOST 17,000 jobs and the all-important construction sector LOST 11,000 jobs. Even government lost 202,000 jobs, blaming 143,000 of those on the temporary Census workers. At the bottom of the report comes another news flash, a revised job loss for June of 221,000 jobs, up from the previously reported loss of 125,000 jobs.
But the real ‘meat & potatoes’ is on another BLS webpage. Here we see what is really going on. That the percentage of the U.S. population that is employed has declined from 58.5% in June to 58.4% in July. In July, 2009, the percentage of employed Americans was 59.3%. Yet, the unemployed rate remains at 9.5%. Why?
The BLS estimates that fewer Americans are unemployed because fewer Americans ‘want a job’. Huh? This is where we get into the fuzzy math of Obama’s voodoo economics. According to the BLS, the number of civilians in the labor force dropped in July from 153.741 million to 153.560 million. At the same time, the number of ‘non-institutional’ civilians INCREASED from 237.690 million to 237.890 million.
The answer to this bizarre statistical trend from the BLS is that fewer Americans want to work. The number of Americans who don’t want a job declined from a ‘seasonally adjusted’ number of 5.895 million in June to 5.886 million in July. The non-adjusted numbers for those two months were 6.143 million in June and 5.978 million in July.
Now, I don’t know about you, but I find it very hard to believe that fewer Americans want a job this month than last month. Especially given the fact that our population is growing and the percentage of employed Americans is declining. True, some people just have plain given up, so discouraged and depressed that they stopped looking. Perhaps some have decided that since Obama has extended their unemployment benefits, and it’s the middle of summer, to just relax and catch some rays or maybe, fish.
But I suspect that the real reason the unemployment rate remains unchanged, let alone at the level of 9.5%, is purely political. The U-6 number, which takes into account a broader definition of unemployed, stands at 16.8%. But with elections coming up in less than 90 days, Obama and the Democrats want the official unemployment rate to be in the single digits. So despite every rational calculation that the actual unemployment rate, the U-3, is probably closer to 10.5% if not higher. Largely due to other data that shows small business, which usually accounts for most job creation, is not expanding or growing at all.