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Sunday, April 8, 2012

The Fake Obama Job Gains

The declining official unemployment rate has been masking the true unemployment picture, according to many of those among the select very few educated, independent economists and financial journalists out there.

The recent Labor Department statistics announced on anything but a Good Friday are the most recent evidence.  The official estimate from the Bureau of Labor Statistics was a monthly increase for March 2012 of 120,000 nonfarm jobs.  But dig deeper into the numbers. Especially the non-seasonally adjusted numbers, since, after all, life is not seasonally adjusted and your misery doesn't come with footnotes.

First, the number of people not in the labor force is up almost 2.4 million in the last year (March 2012 vs. March 2011).  The civilian noninstitutional labor force (that is, people not in jail) has grown by 3.6 million over the last year, but the civilian labor force has grown by only 1.3 million. The civilian rate of participation in the labor force has dropped from 64.0 to 63.6%.  Keep that in mind when you hear about declining unemployment -- again, that is because "discouraged and not looking for work" people are dropping out of what is called the labor force.

The civilian labor force, not seasonally adjusted, shows a two million person increase year over year, but only an estimated 11,000 increase from February to March 2012.  This statistic alone suggests that, even accepting the government figures as accurate, whatever job growth did occur over the last twelve months has flatlined.

Yet other data shows that wage income is barely growing, the number of hours worked is barely growing (we're talking one to two percent annually) and the number of people working both full time at one job and part time at a second job is growing.  Finally, those at the low end of the educational scale are, as always, faring the worst, with those with a high school diploma or less suffering from official unemployment rates of over 15 percent.

Eric Dixon is a New York lawyer, business and strategic consultant and member of the Board of Directors of a New York-based financial think tank, the Financial Policy Council.  The views expressed in this article are his alone.


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