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Friday, February 7, 2014
Hiccup or Recovery? Jan '14 Numbers
The Bureau of Labor Statistics reports that Jan. '14 U3 unemployment dropped to 6.6% and the Workforce Participation Rate (WPR) rose to 63%.
That translates to the WPR rebounding back to its Nov. '13 rate. However, it is still significantly lower than the 65.8% of Oct. 2008, the "height of the recession". The U3 is at the lowest it has been in the Obama Administration, though partially due to a change in definition for some variables in the calculation. For example, full-time used to be defined as an average of over 35 hours per week. It is not considered 30 or more hours per week. In Oct '08, the U3 rate was 6.5%, still lower than any point, so far, in the Obama Administration.
Last month, the BLS reported the year-end U3 and WPR at 6.7% and 62.8%, respectively.
On the surface, this appears as good news. In fact, the slight rise in WPR and slight drop in U3 unemployment also translated into a slight drop in U6 unemployment. Long-term unemployment also ticked down as the extension of long-term unemployment subsidies expired for many. It appears a greater number chose to take non-preferred employment rather than apply for Social Security Disability Insurance (SSDI) under a fraudulent pretense of "unemployment-induced depression".
The reported number of "jobs created" nationwide was reported as just over 113,000 new positions generated. That is less than the 2013 per month average of 194,000. Economists have estimated it would require averages over 320,000 new jobs per month for several months to effectively recover from the recession. At 113,000 jobs per month, on average, we wouldn't recover from the recession until after 2025. At 2013's 194k average, we'd be recovered for another 5 years. To recover by the end of the Obama Administration would require over a 300k new jobs per month average. In fact, to recover by the end of 2015, we'd have to average over 675,000 new jobs created per month for the remainder of the year.
So, the uptick of participation and down-ticks in U3 and U6 do appear to be a slight relief. The numbers and studies show that this is still far from a recovery. But in today's economy, we'll take the moment of good news and pray things get better, soon.
The economic pain has decreased from a 9 to an 8.9 on a scale of 0 to 10. "Good news Mr. Smith. We no longer need to amputate your leg above the knee. We just need to cut it off from mid-calf, instead. And that other foot needs to lose half it's toes. But your Alzheimer's markers are up, of course that's linked to your type-2 diabetes. So you're likely not to remember any of this 3 years from now."
In contrast, states such as Texas and the Dakotas have made substantial progress in closing the jobs gap. Fuel and energy related jobs, tech-related jobs, lower tax rates, and business-friendly government economic policies at the state levels have worked, in these states. Perhaps the federal government should follow the leadership examples set in these areas.