Is Obama Lying About Unemployment Again?

Unemployment:  Is Obama misleading the American people... or are things really improving?

(Update February 18, 2013:  I wrote this article in April 2012, about a year ago.  The unemployment numbers have improved, but the basic tenets of this article still hold.  I've read the same criticisms that Obama is "cooking the books" or "lying" from someone almost every month.) 

Every time the jobs numbers come out, there's a flurry of articles about how "Obama is cooking the books", the unemployment rate is really not better,  millions of people are so miserable they are dropping out of the labor force, etc.  And now that the unemployment rate is coming down, Republicans and other conservatives begin to urge the use of alternate unemployment numbers. 

I found another article along this line here, posted at the Sevier County News. 

There seems to be one big purpose of the Sevier County article:  The author is trying to make a case for the U-6 underemployment rate to be used and discussed vs. the U-3 official unemployment rate.  Now, the U-6 has been around since the early 90's.  It's always been available, published every month along with the U-3, official unemployment rate.  But the U-3 is the unemployment rate that is always discussed and compared.  It's not perfect, which is why the BLS also includes the U-6 numbers.  But that doesn't mean that the Obama administration is attempting to deceive the American people as the BLS publishes the same U-3 unemployment rate that has been used for decades.  Read on.

Official vs. alternate unemployment rates

Let's look at this, one sentence or paragraph at a time:

President Barack Obama continues to mislead the American public by under reporting the unemployment statistics in the nation. This deliberate attempt to conceal the true unemployment picture is intended to convince the voter that all is well and the economy is recovering. In fact, a closer examination of the true statistics, reveal nothing is further from the truth.  

Through effective data-twisting from the White House and their compliant allies in the news media, the Bureau of Labor Statistics'  reports the unemployment rate at 8.3 percent, when in fact it is closer to 15.1 percent according to leading economists. 

The official unemployment rate has been calculated the same way for decades.  To assert or imply that somehow Obama changed the way the unemployment rate is calculated in an attempt to mislead the American people is appalling and shows incredible ignorance of the whole process of computing unemployment statistics.  The author says that the unemployment rate is closer to "15.1 percent according to leading economists".  No source.  No names.  No statistics.  I take it that he is referring to the official U-6 underemployment rate which is published every month as part of the monthly BLS (Bureau of Labor Statistics) Employment Situation report, but he doesn't make that clear.

And....  the government reports the U-6 rate.  They publish is right along with the U-3 rate.  So.. who is trying to conceal what?  

One inescapable fact continues to hound the president. No president has won re- election since the Great Depression when the unemployment rate was more than 8 percent.  But a 15.1 percent unemployment rate makes the prospect of a second term much more remote.

When people have mentioned that "no president has won reelection" stuff they are talking about the regular, official U-3 unemployment rate, NOT the wider U-6 underemployment rate.  We have never used the U-6 underemployment rate when discussing "official" unemployment.

And no President has had to contend with such an incredible economic crisis since Roosevelt.  So we're still looking at the U-3 number when we talk about whether or not Obama is re-electable. Reagan was re-elected, after a recession of his own making, with an unemployment rate of  7.4%.  He took office with a decreasing unemployment rate of 7.5% .  Obama took office with an unemployment rate of 7.8% that was rising relentlessly.  

Dig deeper into the unemployment stats  and you will find that the real-honest-to-God national jobless rate is much higher than 8.3 percent because the true picture includes numbers BLS leaves out of its employment equation.  

The BLS does not include in its unemployment statistics the number of Americans that has given up looking for a job and dropped out of the workforce and those who are forced to take temp jobs or are working fewer hours. The underemployed seem to be the forgotten Americans in the latest unemployment stats.

"Dig deeper into the unemployment stats":  Where in particular should we dig?  First of all, if the underemployed are "forgotten" now, they HAVE ALWAYS BEEN forgotten in the counting of the unemployed.  

There are alternative numbers that tell us how many people have dropped out of the labor force.  Not only that, but there are also numbers that tell us how many of those people who have dropped out of the labor force still "want a job".  My sense is that the author doesn't even know these numbers are available. 

But these underemployment numbers have NEVER been included in the regular unemployment numbers, not under Bush, not under Clinton, not under Bush I.  Don't blame this on Obama!
    
Those Pesky Seasonal Adjustment Factors

In January the president made the announcement the economy was improving and more than 300,000 jobs had been created in December. What he failed to mention was that these jobs were seasonal jobs and temporary. He also failed to mention that working age adults not participating in the labor force--those neither employed nor looking for work -- increased by 88,000."

First of all, the number of jobs (in seasonally adjusted numbers) reported as added in December was 200,000, not 300,000.  The author or this piece needs to check his sources.  As to the increase being temporary jobs, the author clearly does not understand employment trends nor does the author understand seasonal adjustment factors.  

• The number of  "raw" not seasonally adjusted jobs has gone DOWN between November and December every year since 2000.  
• In December 2011, there was a real "raw" decrease of 220,000 jobs.  Employers do most of their  seasonal hiring in October and November and many of them start to lay people off by mid-December, when the jobs numbers are actually reported.
• However, the real "raw" decrease of 220,000 in December 2011 is less than it has been in 6 out of the past 11 years.  As a result, the seasonally adjusted number of jobs which is (and always has been) the number reported to the media went up in December 2011. 

Though this author didn't look at January numbers, here's some information about those numbers:  In seasonally adjusted numbers, 243,000 jobs were reported as added in January (later revised to a job gain of 275,000).  But in "raw" numbers of jobs, 2,689,000 jobs were lost between December and January.  This extreme loss of jobs happens every January.  However, the average loss of jobs between December and January over the past 8 years has been 2,912,000 in "real" numbers.  So, based on recent history, this year's loss of 2,689,000 was a great improvement.  That's how a real loss in jobs turns into a seasonally adjusted gain.  Since January, we have added back (in real numbers) about 1,700,000 jobs.     

So we actually, in real numbers, LOST jobs between December and January.  And we lost fewer than we normally do.  

Those Helplessly Hopeless Terribly Discouraged People who are Dropping out of the Labor Force

About the number of people "not in the labor force" increasing by 88,000 between December and January.. I have no idea again where this author got his figures.  (Does free speech really mean that people can say whatever they want to say, publish statistics without any back up or sources?)         

Actually the number of people not in the labor force increased by about 1,200,000 between December and January due to Census adjustments.  I'm not going to get into the whole Census adjustment thing again.  You can read about it HERE. I'm currently working on an article that talks about the increase in the "not in the labor force" people.  We actually know quite a bit about them, and we know that very few actually want a job.  

Will the economy slow down and the unemployment rate head back up?

More ominous for Obama and his bid to be a two-term president is that most economic forecasters do not see the jobless rate falling below 8 percent by November. The economy appears to be slowing down and with it, new job creation, economists say.

We'll just have to wait and see, but 4 million new private sector jobs with so much opposition from conservatives is pretty darned good.  And Obama's opponent will be Rmoney, who was the governor of Massachusetts when it held the 47th place in job creation.  Rmoney know how to layoff people.. he likes firing them; he's already said that, but he really doesn't know how to create jobs.  And I'm not sure why people like this author and others who agree with him think they have anything in common with a guy who banked 21 million bucks while being unemployed..   Money he ultimately made off the backs of workers like themselves and their families while he was employed at Bain Capital.         

"Going forward, unemployment is not likely to fall much further and could rise again," says University of Maryland's Business School economist Peter Morici, who has been severely critical of the president's sorry jobs record.

I'll let this comment go, as I don't know this man's politics, but let's face it:  Republicans and their supporters desperately want the economy to stall and the American people to be miserable, believing that the low information masses will vote the Republicans back into office.

Time will tell what the unemployment rate will do.  But, with the Baby Boomers born in 1946 hitting the age at which they can take full social security, expect the unemployment rate to continue downward this year as those people exit the labor market.     

"Fourth-quarter growth was stronger as the global economy recovered from first-half disruptions such as the earthquake in Japan, but going forward, economists expect growth to slow to about 2 percent," Morici said.

Those Helplessly Hopeless Terribly Discouraged People who are Dropping out of the Labor Force Part 2

This highlights the big under-reported story in Obama's persistently lackluster jobs record: the rapidly declining labor force participation rate.

"In the latest, much celebrated, unemployment report, the labor force participation rate had plummeted to 63.7 percent, the most rapid decline in U.S. history," writes economist Peter Ferrara.

"That means that under President Obama nearly 5 million Americans have fled the workforce in hopeless despair," Ferrara adds....

“They may desperately need and want jobs. They may be in poverty, as many undoubtedly are, with America suffering today more people in poverty than in the entire half century," says Ferrara. "But they are not counted in that 8.3 percent unemployment rate that  Obama and his media cheerleaders were so tirelessly celebrating last week."

Oh, please.  There is NO indication that 5 million people have left the workforce due to "hopeless despair" and any economist worth two cents ought to know that.

There is NO indication that most of the people Not in the Labor Force "desperately need and want jobs".  The BLS publishes numbers of people who are not in the labor force, and it tells us why many of them are not in the labor force.  Not only that, but it tells us how many of these people "want a job" and how many are "discouraged".  If 5 million people have left the labor force out of "hopeless despair", one would expect that the numbers of people who "want a job" and the numbers of people who are "discouraged" would have gone up at least by a couple of million.     

But it just ain't so!  The number of people not in the labor force who "want a job" (which includes people who haven't looked for work for over a year) was at 5,866,000 when Obama took office in January 2009.  It peaked at 7,124,000 in summer 2011.  It is now 6,041,000, barely higher than it was when Obama took office.  

And those "discouraged" workers (who are a subset of those who "want a job")!  (To be "officially" discouraged, you need to have looked for work within the past year, but not within the past month.  You also have to be available for work, meaning no illness, family responsibilities, school responsibilities, or the like that would keep you from a job.)   The number of discouraged workers was at 734,000 when Obama took office in January 2009.  It peaked at 1,207,000 in June 2010, and it is now at 865,000,  just 100,000 more than when Obama took the oath of office.

The Continuing Myth of the Helplessly Hopeless 

The myth that millions of people have left the labor force due to "hopeless despair" is just that:  A Myth.  There is absolutely NO proof of it.  But, just as we still have "birthers", even after Obama has done more to demonstrate his natural-born citizenship than any other President has done or has had to do, we also have "hopeless despair-ers" who insist the unemployment rate is coming down because millions of people have left the labor force in "hopeless despair" despite the fact that there is no evidence of this.

The nightly network news made a big deal of the 243,000 new jobs that were created in January, but what they did not report was that 1.2 million discouraged workers had simply dropped out of the workforce, Ferrara reported.

But they were not counted among the unemployed because they had ceased looking for a job and that sent the unemployment rate down.

No... Is this guy really an economist?   Pretty pathetic excuse for one, I must say.  

The 1,200,000 people who were added to the "not in the labor force" bucket in January were added due to Census adjustments.  I'll repeat the link I mentioned above HERE.

“They may desperately need and want jobs. They may be in poverty, as many undoubtedly are, with America suffering today more people in poverty than in the entire half century," says Ferrara. "But they are not counted in that 8.3 percent unemployment rate that  Obama and his media cheerleaders were so tirelessly celebrating last week."

Add these discouraged dropouts and Obama's shameful unemployment rate climbs to 11 percent. Still, that is not the true rate of unemployment.

If you have never before counted the discouraged people in the official unemployment number before, why would you count them now?  Why is it more important to count them now, while Obama is President, than it was to count them when Bush I or Bush II or Clinton was President?  Could it be that now, since the official unemployment rate is coming down to something approaching a re-electable number, the President's opponents are trying to think of ways to make it look as if this achievement is simply not that remarkable?

Remember, we have exactly 130,000 more "hopeless and discouraged" workers than we did when Obama was inaugurated.  And the U-6 unemployment rate, the one that includes these discouraged workers, all of the marginally-attached workers, and the people working part-time who want full-time jobs is now 14.8 in seasonally unadjusted numbers and 14.5 in seasonally adjusted numbers.  What was it when Obama took the oath of office?  15.4 in seasonally unadjusted numbers, and 14.2 in seasonally adjusted numbers.  Please remember... those numbers were going up and quickly when Obama took the oath of office and they are going down quickly now.         

There is more fuzzy math  in the BLS's statistics. Another 2.8 million, BLS said, "wanted and were available for work, and had looked for a job sometime in the prior 12 months,"

But they weren't counted as unemployed because they said they had not looked for a job in the previous four weeks.

I'm going to assume that the author is talking about the "marginally attached workers" who have also NEVER been counted in the official unemployment count, but always included in the U-6 count.  (By the way, the "discouraged workers" discussed above are a subset of these marginally-attached workers.)

Now there is a report that the BLS puts out, the "Persons Not in the Labor Force" report, that tells us about these marginally attached workers.  (According to the BLS, "marginally attached workers" are those who "want a job, have searched for work during the prior 12 months, and were available to take a job during the reference week, but had not looked for work in the past 4 weeks.")         

Here are the numbers for these marginally attached people, compared to the numbers when Obama took office where available: 

• Total marginally attached workers (includes discouraged workers)-  Now:  2,352,000.  January 2009:  2,130,000
• Total discouraged workers (a subset of the marginally attached workers)- Now:  865,000.  January 2009:  734,000
• Total who did not search for work for SOME OTHER REASON than discouragement- Now: 1,488,000. January 2009:  1,296,000.  
• The breakdown for some of those "some other reasons" now (This breakdown is not available for January 2009):  Family responsibilities:  252,000.  School or training:  321,000. Ill health or disability:  139,000.  Other reasons that these people haven't looked for work in the past four weeks, including transportation and child care problems:  776,000.  

All of these workers, discouraged drop-outs and the so-called "underemployed" forced to work part-time or temp jobs, pushes the real jobless unemployment rate to 15.1 percent.

First of all, we have to make sure we aren't counting those 865,000 discouraged workers twice.  They are a subset of the 2,352,000 marginally attached workers.  If this is the "real" jobless rate, then it has always been the real jobless rate.  You can't say that we need to count these people because Obama is President, but we didn't need to count these people when anybody else was President.  Tell me, author of this article, why are you counting these people now and you didn't count them when Bush I, Bush II, Reagan, or Clinton were President? 

The Magic of Numbers:  Unemployment in the States? 

How the BLS arrived at an 8.3 percent unemployment rate is difficult to ascertain considering 16 states, including the most populated, had jobless rates that fell between 12.3 percent and 8 percent in February.Among them: Nevada, 12.3 percent; Rhode Island, 11 percent; California, 10.9 percent; North Carolina, 9.9 percent; Florida, 9.4 percent; Georgia and Illinois, 9.1 percent; New Jersey, 9 percent; Michigan, 8.8 percent; Kentucky, 8.7 percent; and New York, 8.5 percent.

It may not look the same, but I just put all of the states' labor force numbers and their unemployed numbers on a spreadsheet and calculated the unemployment rate from the state data.  I came out with (for February 2012) 8.281%.  That's just a hair shy of the 8.3% published as the February unemployment rate.  Try it yourself, author of this article, if you think the state numbers don't "look" like they match the national unemployment rate.  Take out the cities (which are included with the states), and take out Puerto Rico.  


What Does the Word "Improvement" Mean?  Look it up!

Obama insists we're moving in the right direction, even though unemployment rates remain very high by historical standards. Economists say the unemployment figures are still dreadful.

We are moving in the right direction, dunce.  Every number shows that we are ALMOST back to where we were when Obama took the oath of office in the most miserable economy since the Great Depression.  Yes, unemployment rates are still high.  But "dreadful"?  Well, the corporate types who want to manipulate the people into voting the Republicans back into office would have you believe they are "dreadful", but considering the situation that Obama inherited and the constant Republican obstruction, they are really quite remarkable.   


Comparing the Recession that Obama Inherited with 2003 or Reagan's Recession?

"The unemployment rate today, 10 quarters after the end of the recession, is still a full two percentage points higher than it was during the peak of the last recession in 2003," Heritage Foundation economist J.D. Foster told Human Events.

This recession is nothing like the recession in 2002-2003, not in size, not in scope or length.  Anyone who thinks it is, like this joker from the Heritage Organization, does not deserve the title of "economist".   

In the fourth year of Ronald Reagan's presidency, after a deep recession, unemployment was 7.5 percent. It was a tame 5.8 percent in 2008, the last year of George W. Bush's presidency. Can Obama do any better? So far he hasn't.

The unemployment rate was 7.8% when Obama took the oath of office, not 5.8%.  Anyone who says that we should believe the 5.8% percent rate (which was the unemployment rate overall during 2008) when the economy was tanking at double speed during the year of 2008 is trying to deceive you and me.  


Ask yourself why someone wants you to believe that things are so much worse than they are.  The number of people who were unemployed when Obama took the oath of office was 12,049,000 using the official U-3 number.  The number of people who are unemployed now is 12,763,000 (using the official numbers seasonally adjusted.)  

And Reagan inherited a DECLINING unemployment rate and an INCREASING GDP from Carter.  The economy was NOT in a recession when Reagan took office.  Try this article on the differing situations between Obama and Reagan.  Again, anyone who doesn't know this should not call himself an economist.  He either doesn't know what he is talking about or he is intentionally trying to deceive the easily led.      

Even Obama's supporters in the news media think he has failed miserably on the economic front, especially on jobs.  Liberal New York Times economics columnist Paul Krugman says, "things are not O.K. -- not remotely O.K. This is still a terrible economy."

Krugman is a Keynesian who feels that there is not enough stimulation of the economy and he wants more intervention and stimulation.  Is that what the author of this article and the people defaming Obama want?  And here is Krugman's whole article.  The last paragraph from Krugman's article, copied below, paints a much different picture of Krugman's comment than the sliver lifted above out of some right-wing rag.

And every time we get a bit of good news, the purge-and-liquidate types pop up, saying that it’s time to stop focusing on job creation.

Sure enough, no sooner were the new numbers out than James Bullard, the president of the St. Louis Fed, declared that the new numbers make further Fed action to promote growth unnecessary. And the sad truth is that the good jobs numbers have definitely made it less likely that the Fed will take the expansionary action it should.

So here’s what needs to be said about the latest numbers: yes, we’re doing a bit better, but no, things are not O.K. — not remotely O.K. This is still a terrible economy, and policy makers should be doing much more than they are to make it better.

In Summary

The jobs numbers are almost back to where it was when Obama took office, and that's no small feat.  We've added over 4,000,000 private sector jobs since the "trough" of the recession, despite serious government cutbacks and despite constant Republican obstruction and out-and-out lies.

Yes, many people are still struggling.  The poverty rates and the numbers of people on food stamps are unfortunately "lagging indicators".  They simply won't get better until we have more jobs that are better and it's going to be hard for Obama or any President to fix that as long as corporations have so much power in the United States.  The issue isn't laziness or some kind of moral turpitude; the issue is lack of decent-paying jobs.  It's a lack that has been building for the past ten years or more.

But still things are looking up:  In late 2008 and 2009, when I would punch in "Chicago - All jobs" on Careerbuilder's search engine, I would get 7,000 to 8,000 jobs.  A few weeks ago, this same search gave me over 13,000 jobs.  And today... almost 16,000.  Something is happening out there, no matter how much the naysayers try to keep it from happening and want to convince us that it isn't happening.