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Friday, March 8, 2013
Examining February 2013 Numbers
It's Friday, March 8th, 2013. That means the US Bureau of Labor Statistics has released its monthly exercise in mathematical gymnastics known as the Economic Indicators Situation Report for February 2013.
Before addressing the official report, remember that each previous report has contained revisions of previous reports, sometimes as far as 90 days past the original report. In coming months, we may find that the numbers released today were not entirely accurate.
The report states that U3 unemployment edged down 1/10 of a percent from 7.9% in January to 7.7% for February. This is the lowest reported U3 rate since Obama first took office in 2009.
However, the January numbers were revised. 38,000 fewer people were employed than initially reported in January, indicating that the U3 may have been closer to 8.0% than 7.9%. Numbers were higher in December than initially reported, mostly for seasonal retail hires.
Long-term unemployed (those unemployed for more than 6 months) remained constant at 4.8 million. No change.
The Workforce participation rate dropped, again, by 1/10 of 1 percent to 63.5%. That accounts for most of the drop in the U3 unemployment rate. So, claiming the 0.2% drop in the U3 rate as positive news is inaccurate. Fewer people capable of working are even bothering to seek employment. Fewer people are willing to take responsibility for their own lives and livelihood. More people have given up. That is far from good news.
It indicates that people have little to no motivation to acquire employment. That means more people are willing to be enslaved to the government, counting on scraps and handouts such as SSDI, TANF, and food stamps (EBT) to take care of them. This is contrary to the ideal of individual liberty our country was founded upon.
The figure for the underemployed remained relatively constant at 8.0 million. When added to the 12.0 million unemployed, that is 20 million people who are unemployed or filling part-time jobs while attempting to acquire full-time jobs. That makes the U6 number still dangling at 12.3%.
If the Workforce Participation Rate were the same it was in Feb 2008, 66.0%, U3 unemployment would be closer to 11.2% and the U6 closer to 14.1%.
The Dow Jones has seen record highs over the past week. The NASDAQ and S&P 500 have come along for the ride. Many pundits have stated that this trend may be in spite of the so-called sequester cuts. More than likely, they are due to the sequester cuts as they demonstrate an indication of possible future fiscal responsibility from the federal government. Continued cuts, increasing the prime lending rate, and future cuts to tax rates could give the economy the jolt in the arm it needs.
Any job creation has been in spite of the policies of the current administration. The looming fines, fees, and mandates coming from the PPACA will put burdens on both employers and tax payers which will decrease payroll availability (what firms can afford to pay) as well as disposable income for employees.