AUG: +151,000 jobs. Unemployment rate steady at 4.9%. AUG details here!.. Jobs since Obama took office?... Unemp. rate under Obama?

Friday, April 6, 2012

What Was the Unemployment Rate When Obama Took Office? (March 2012 update)



What was the unemployment rate when Bush left office and Obama was inaugurated? 7.8%

How high did it go?  10.0% 
What is today's (March 2012's) unemployment rate?   8.2%


How many people were looking for work when Obama was inaugurated, how many were working?  And how many people are looking for work and how many are employed now?
Keep reading!



The Unemployment Rate when Obama took office:
  • For the record, when Obama took office in January 2009, the "official" unemployment rate in seasonally adjusted numbers was 7.8%, with 12,049,000 people reporting themselves as unemployed and actively looking.  142,187,000 people were working in January 2009.*  (These numbers are adjusted slightly since original publication as the Bureau of Labor Statistics updates its numbers.  The original January 2009 unemployment rate reported by the BLS in February 2009 was 7.6%)  
  • In "raw" numbers not adjusted for seasonal variance, the unemployment rate was 8.5% with 13,009,000 people reporting themselves as unemployed and actively looking for work.  140,436,000 people were working in numbers not adjusted for seasonal variance.
What caused the Rise in the Unemployment Rate When Obama Took Office?
This was a question I received, and I thought I would answer it here. 
Well...as just mentioned, the unemployment rate was on its way up with a bullet starting in early 2008.  The unemployment rate was 4.4% in mid 2007 before the full impact of the housing crash hit the labor market.  Employment in construction hit a max in mid 2006 and had already started down by mid 2007, but most other employment sectors were not impacted.  But by late 2007, the entire economy was starting to feel the impact of the housing crash.  In a year and a half, from June 2007 until January 2009, the unemployment rate went from 4.4% to the 7.8% discussed above.  
That's why we say that Obama inherited a rapidly-increasing unemployment rate.  Why did it continue to rise after Obama took office?  It takes a while for any government policy to take effect.  Both TARP, the bank bailout signed by Bush in late 2008, and ARRA, the stimulus signed by Obama in February 2009, needed time to take effect, and that simply did not happen immediately.  How long does it take to turn around the proverbial big boat vs. a speed boat?  However, even though it took 9 months for the unemployment rate to max out (see below) and start decreasing, the rate of increase slowed down by June 2009.
The question, "What Caused the Rise in the Unemployment Rate After Obama Took Office?" really makes no sense...  The unemployment rate was rising rapidly before  Obama took office, and it took a few months for policies to kick in and stem the job bloodbath.   A better question would be "What Caused the Rise in the Unemployment Rate Starting in 2007?"   The answer to that would be the housing crisis and the resulting crisis in banks and lending institutions.  But that is outside the scope of this article.
The Unemployment Rate at its Peak: 
  • At the "trough" (bottom in terms of jobs) of the recession in late 2009/early 2010, the "official" unemployment rate in seasonally adjusted numbers climbed to 10.0% in October 2009 with 15,421,000 people (out of a labor force of 153,822,000) reporting themselves as unemployed.   138,401,000 were working in October 2009; however, the lowest number of people working was reported in December 2009, when 137,792,000 people (in seasonally adjusted numbers) were working.    
  • In "raw" numbers not adjusted for seasonal variance, the unemployment rate reached a peak of 10.6% in January 2010 with 16,147,000 (out of a labor force of 152,957,000) reporting themselves as unemployed and actively looking for work.  Only 136,809,000 were working (in "raw" unadjusted numbers) in January 2010.

The Unemployment Rate Now:
  • Now, in March 2012, the "official" unemployment rate in seasonally adjusted numbers is at 8.2%, with 12,673,000 (out of a labor force of 154,707,000) unemployed and actively looking for work.  142,034,000 people are working now.  (Last month 142,065,000 were working.  This is a decrease of 31,000 people working in seasonally adjusted numbers.)  The unemployment rate  decreased by .1% (one tenth of a percent) as 164,000 people left the labor force in March.  (We still have 820,000 more people in the labor force than we did in December, however.)  (The unemployment rate has now decreased .7% since October.) 
  • In unadjusted "raw" numbers the unemployment rate is now 8.4%, an decrease of .3% (three-tenths of a percent) since February.  In "raw" real numbers, 12,904,000 (out of a labor force of 154,316,000) are unemployed and actively looking for work.  141,412,000 are working now in "raw" numbers unadjusted for seasonal variation.  (This is an increase of 728,000 people working.)

To Summarize the Unemployment Rate Now Compared to When Obama Took Office:
  • Using seasonally adjusted numbers, the unemployment rate was 7.8% (and rising quickly) when Obama took office, and it is 8.2% today.   12,049,000 were officially unemployed back then, and 12,673,000 are unemployed today.  
  • Using nonseasonally adjusted numbers, the unemployment rate was already 8.5% when Obama took office, and it is 8.4% today.   13,009,000 were officially unemployed in "raw" numbers back then, and 12,904,000 are officially unemployed in "raw" numbers now. 
(Note:  All of my employment number reports are based on monthly reports and data published by the Bureau of Labor Statistics.  Monthly numbers reports are based on the monthly Employment Situation Report.  The Employment Situation report includes month over month and year over year jobs numbers.  My analysis is taken from the monthly BLS data copied to an Excel spreadsheet every month.  I calculate detailed percentage increases/decreases, 3 month numbers, 2011 to date numbers, and I compare jobs numbers to those at the time of Obama's inauguration and at the "trough" of the recession.)

2 comments:

  1. Unemployment rates are done monthly, not daily. To be fair, the Unemployment rate for the first full month that Obama was in office, February 2009, was 8.1 percent. It's a little annoying when Republican pundits cry about the unemployment rate as if they're against high unemployment rates. The fact is they're against democrats, not against high unemployment rates. If they were against high unemployment rates they'd be furious at Bush for DOUBLING the unemployment rate from 4% to 8% during his tenure and equally as angry at Ronald Reagan for allowing it reach 10.8 percent.

    ReplyDelete
  2. Unemployment rates are published by the Bureau of Labor Statistics monthly. I'm not sure what you are responding to when you mention "daily unemployment rates". Now Gallup is now publishing daily unemployment numbers, but those are the result of its polls, not the result of BLS surveys which are more carefully conducted.

    Actually, the unemployment rate in February 2009 was 8.3%. (It was initially reported as 8.1%, but subsequent revisions revealed that it was actually 8.3%.)

    You are quite right that many Repubs' complaints about the unemployment rate are only complaints about Obama and the Dems. We are adding as many private-sector jobs now as Bush did during the same time in the 2003-2004 recovery, and I don't remember the Republicans up in arms about that. And Obama inherited an economy that was much, much worse than the economy that Bush inherited.

    Thanks for dropping by!

    ReplyDelete

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