The propagandists in the corporate media are scratching their heads trying to figure out how to paint a rosy picture using the shockingly bad employment news out of the Labor Department today.
Here’s the raw data:
The official unemployment rate fell from 9.4% to 9.0%, when the prediction had been that it was going to move up slightly to 9.5%
The number of new jobs added was a net 36,000, the lowest increase since last September, when the economy was still losing jobs.
Here are some of the media quotes:
Associated Press: “The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work.”
MSNBC: “The U.S. labor market slowed sharply last month, generating just 36,000 net new jobs, the fewest in four months, as winter storms depressed payrolls growth. Still, the unemployment rate dropped sharply to 9 percent, the lowest level in nearly two years.”
Fox News: “Economic growth is gaining momentum, with factories busy and service firms expanding, but one critical area still lags: job creation.”
Hoops were being jumped through here to try to make something terrible look good.
Here’s the reality: In a trend that has continued now since October, the number of net new jobs created by the US economy has fallen once again, thanks to layoffs by construction companies, warehouse and transportation companies and especially public employers like state and city governments and school districts, which undercut minor gains in the manufacturing and retail sectors. A gain of 36,000 jobs has to be put in perspective too—the US economy has to add 150,000 new jobs a month just to accommodate the growth in the size of the working age population. We haven’t seen those kinds of numbers since October, when the job picture slipped back into the negative zone again.
The average number of jobs created monthly over the last three months was just 83,000, according the the Labor Department.
And as for that 0.4% drop in the official unemployment rate to “just” 9%? That was the result of a decline in the number of people still considered to be “in” the labor force, which reportedly shrank by 504,000. These are people who have given up trying to find a job—for example people over 62 who may have just decided, after trying for a year or two, to retire early, take Social Security, and give up, or who have decided to stay home and take the kids out of daycare to save money, instead of beating the street looking for a nonexistent job. The overall labor participation rate—the percentage of working age Americans actually in the labor market, either working or looking for work—fell in January to a recession low of just 62.4%. That is, fewer than 2/3 of working-age Americans are even in the jobs market these days!
This is not good news. It is terrible news. And no amount of beating around the bush, or even outright cheerleading based upon the cherry-picking, or misinterpreting of the data, can make it good.
The only surprising thing about the latest Labor Department report on employment and unemployment is how wrong-footed the economic media, and the analyst community, were about it. On the eve of the department release of the date, everyone was writing about expectations that job growth would surge to 150,000 or even 185,000, and that the official unemployment rate would tic up slightly to 9.5%. There was even the requisite spin on this anticipated rise in unemployment, which explained that it was actually a good thing because it reflected a rise in the overall size of the labor force as formerly discourage workers come back into the job market to look for work.
Funny how when they’re trying to explain a rise in the unemployment rate, the media propagandists are quick to mention the increasing size of the labor force, but when it turns out that a decline in the overall labor force is the reason for a decline in the jobless rate, they are silent, or bury the news at the bottom of the news story.
When you put this latest sorry jobs news together with last weeks report that housing prices in all the major markets are headed back down for what is called a “double-dip” housing recession, it paints a very gloomy picture for the American economy. And that’s before you factor in the impact of rising oil prices, as traders factor in the growing political turmoil across the Middle East.
It looks like hard times ahead, whatever the corporate media are saying.