Under-employment, Poor Labor Participation Rate -- Both Are Major Drags On The Economy.

Obama's Economy Is Creating Too Many Low-Paying Jobs

Monday, 06 Oct 2014 08:33 AM

By Peter Morici

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Despite another seemingly good jobs report, President Obama's approval rating is lower than a snake's belly, and Republicans could retake the Senate in November.

Missteps in the Ukraine, Iraq and elsewhere weigh on voters' minds, but the economy — especially the jobs picture — is not what Obama cracks them up to be.

The 5.9 percent unemployment rate is a fraud. The percentage of adults working orseeking employment is the lowest since women began entering the labor force in larger numbers in the 1970s.

Were the labor force participation rate the same today as when Obama took office, unemployment would be about 10 percent. Wages remain stagnant and household incomes are well below pre-crisis levels.

The earnings of women, especially young women, have fared somewhat better than it has for men, but increasingly women have to support their husbands, sons and boyfriends. One in six men between the ages of 25 and 54 — too old for college and too young to retire — are without jobs. Many have quit looking altogether and sit around the house all day watching ESPN.

Perhaps that's Hillary Clinton's vision of a better America, but it doesn't sit well where most people live.

The economy is creating too many low-paying jobs in industries like retailing and hospitality, but industries where men find good-paying jobs are languishing. Since Obama took office, manufacturing has shed 400,000 jobs and construction nearly 500,000.

New labor-saving technologies are a problem but so are lousy liberal policies.
American manufacturers continue to cede markets to Chinese imports, but Obama's policy of appeasement toward Beijing precludes taking any meaningful actions against its unfairly subsidized products — actions advocated by Democratic economists like Peterson Institute founder Fred Bergsten and Noble Laureate Paul Krugman.

The housing industry has not recovered to pre-recession levels, because Millennials want to live closer to their jobs — not in distant suburbs — but cities with excessively burdensome building regulations and bureaucracies, unrealistic minimum-wage laws, heavy taxes and underperforming public schools make building housing affordable for young families awfully difficult.

The president likes to blame a "do nothing" Congress, but he largely got his head during his first five years — Obamacare, Dodd-Frank, Pell grants and generous student loans, other new spending and higher taxes on upper income Americans.

Most of that has not worked out very well — too many American employers are eager to take even more jobs to Asia or relocate their corporate headquarters outside the United States.

House Republicans can't really be blamed for wanting different approaches and in November, they will be validated when voters return a GOP majority to the lower house.

President Reagan was dealt a tough hand by history too. He weathered a deep recession early in his first term and unemployment peaked at 10.8 percent — but he cut spending and taxes, eliminated much unnecessary government meddling in business and boosted employment by 8.4 million, or more than 9 percent, his first 5 ½ years.

Obama has managed to increase employment only by 5.5 million, or approximately 4 percent.

Republicans are ahead in most key Senate races, but whether they pick up the six seats needed to win a majority will likely be known early on election night when results come in for North Carolina. If Democrat Kay Hagan holds on to her seat, the math gets tough for the GOP.

Hagan, like several other moderate Democrats, has supported the president on theAffordable Care Act and key budget and tax votes but has managed to maintain a business-friendly record on regulatory issues.

Still like other moderate Democrats, the very first vote Hagan would cast in the 114th Congress would be to re-elect Sen. Harry Reid, D-Nev., majority leader.

How that could ever help create jobs or reverse the failing fortunes of working families is beyond this economist's ability to comprehend. 

© 2014 Moneynews. All rights reserved.

Unemployment Not As Low As Reported, GDP Gains, Tapering Coming

Peter Morici to Moneynews: True Unemployment Rate at 13 Percent

Friday, 06 Dec 2013 01:55 PM

By Dan Weil and Lisa Barron

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While Friday's jobs report represents a sign of progress, it also understates the magnitude of the unemployment problem, said Peter Morici, a professor of international business at the University of Maryland and a Moneynews Insider.

The headline number for unemployment fell to a five-year low of 7 percent last month. But the total exceeds 13 percent if you count people who have given up looking for work or are working less than they'd like, he tells Newsmax TV in an exclusive interview.

"We see this at both ends of the labor force, young people who are basically reluctant graduate students for the third time and older folks in their 50s who have lost their jobs," Morici said.

While non-farm payrolls gained 203,000 in November, "we're not getting the kinds of numbers we would need to get unemployment to an acceptable level and have high quality jobs," Morici said.Still, "they [the jobs numbers] are a lot better than we were expecting," he said. "And going forward, 2014 will be a little better year. We're not going to get the 400,000 jobs a month we need, but we're going to get more jobs than we've been getting."

As for the economy, third-quarter GDP growth was revised up to 3.6 percent Thursday from 2.8 percent previously. But the gain came largely in inventories, Morici notes. That will have a dampening effect on fourth-quarter growth as those inventories need to be worked off, he said.

He expects growth of about 2.5 percent for 2014 and 2015. "However, this is nowhere near what can be accomplished," Morici said. "Ronald Reagan, at this point in his recovery, had the economy growing at nearly 5 percent, and he was recovering from a deeper recession than Mr. Obama

"Morici said the economy is strong enough for the Federal Reserve to begin tapering its quantitative easing. The Fed is buying $85 billion of Treasurys and mortgage-backed securities a month."We'll start tapering in January and February," the professor predicted. "I believe we've gotten all we can get out of steroids, and now we have to get down to fundamental structural reforms." 

If President Barack Obama is unwilling to make those reforms, the Fed should stop bailing him out, "because it's building up a lot of negative effects in the agricultural land market, in the real-estate market, and so forth," Morici said.

The Fed should avoid tapering dramatically, so that it doesn't send the economy and stock market out of whack, he said.

"This is something the U.S. economy can accept and the stock market can deal with," Morici said.

"There may be an initial adjustment in the market because you know how the market is. It should be looking ahead six months. Instead, it looks ahead six days and maybe only six hours at times. But tapering is on the way."

© 2013 Moneynews. All rights reserved.

Manipulation Of Employment Numbers Is A Lie, A Deceit And A Fraud

More Obama Fraud

November 20, 2013 by Bob Livingston

PHOTOS.COM

There is yet more fraud surrounding the undocumented usurper currently occupying the people’s house. Given that Barack Obama’s entire existence is based on a fraud, how can it surprise that his re-election was based on yet another?

From his birth narrative to his life in Indonesia to his youth spent in Hawaii to his Social Security numbers to his Selective Service application to his noms de guerre to his college life to his authorship to his “Hope and Change” to his “If you like your healthcare, you can keep it”: Everything about the man is a fraud.

For four years, he perpetuated the lie that people who had health insurance they were happy with could keep it. He knew every time he said it that it was a lie. Now we know that the unemployment numbers that came out in the September before the election were lies as well. And the lies were made based on orders from above.

The employment numbers were manipulated. But they were manipulated far and away more than the normal, “acceptable” manipulation that occurs month to month. And what’s worse, the Census Bureau knew they were manipulated and did nothing about it; and the orders for the manipulation came from the upper echelons of the Bureau.

As I and others have said many times, the Bureau of Labor Statistics’ employment numbers are cooked. The Bureau doesn’t count all the unemployed as being unemployed. They only count the unemployed seeking work. Once a worker drops out of the workforce, he is no longer considered unemployed.

The Census Bureau is under contract with the Labor Department to conduct household surveys to help determine the “official” unemployment rate. Given that Federal Reserve money printing is ostensibly based on what Helicopter Ben Bernanke determines is an acceptable or unacceptable level of employment, the unemployment numbers are crucial to U.S. financial policy. They were also crucial to Obama’s election, apparently.

According to The New York Post, as the November 2012 election drew near, Census employees were deliberately fabricating employment surveys. That accounts for the drop in unemployment from 8.1 percent in August 2012 to 7.8 percent in September — a number that most pundits thought at the time was unrealistic. Turns out it was.

Unemployment Lies and Obfuscation

Staring Armageddon In The Face, But Hiding It With Official Lies

March 12, 2013 by Paul Craig Roberts 

PHOTOS.COM

According to the Bureau of Labor Statistics, the U.S. economy created 236,000 new jobs in February. If you believe that, I have a bridge in Brooklyn that I’ll let you have at a good price.

Where are these alleged jobs? The BLS says 48,000 were created in construction. That is possible, considering that revenue-starved real estate developers are misreading the housing situation.

Then there are 23,700 new jobs in retail trade, which is hard to believe considering the absence of consumer income growth and the empty parking lots at shopping malls.

The real puzzle is 20,800 jobs in motion picture and sound recording industries. This is the first time in the years that I have been following the jobs reports that there has been enough employment for me to even notice this category.

The BLS lists 10,900 jobs in accounting and bookkeeping, which, as it is approaching income tax time, is probably correct; 21,000 jobs in temporary help and business support services; 39,000 jobs in healthcare and social assistance; and 18,800 jobs in the old standby: waitresses and bartenders.

That leaves about 50,000 jobs sprinkled around the various categories, but not in numbers large enough to notice.

The presstitute media attributed the drop in the headline unemployment rate (U3) to 7.7 percent from 7.9 percent to the happy jobs report. But Rex Nutting at Market Watch says that the unemployment rate fell because 130,000 unemployed people who have been unable to find a job and became discouraged were dropped out of the U3 measure of unemployment. The official U6 measure, which counts some discouraged workers, shows an unemployment rate of 14.3 percent. Statistician John Williams’ measure, which counts all discouraged workers (people who have ceased looking for a job), is 23 percent.

In other words, the real rate of unemployment is 2 to 3 times the reported rate.

Nutting believes that the U3 unemployment rate has become too politicized to have any meaning. He suggests using instead the workforce participation rate. This rate is falling substantially, reflecting the discouragement that occurs from inability to find jobs.

Williams (shadowstats.com) says that distortions in seasonal factor adjustments overstate monthly payroll employment by about 100,000 jobs. The jobs data that is not seasonally adjusted shows about 1.5 million fewer jobs in the economy.

In a recent communication, statistician John Williams (shadowstats.com) reports that the rigged official annual rate of consumer inflation (CPI) of 1.6 percent is in fact, as measured by the official U.S. government methodology of 1990, 9.2 percent. In other words, the rate of inflation is 5.75 times greater than the reported rate. If Williams is correct, the interest rate on bonds is extremely negative.

Over the years, the official measure of inflation has been altered in two ways. One is the introduction of substitution for what formerly was a constant weighted basket of goods. In the former measure, if a price of an item in the basket (index) rose, the CPI rose by the weight of that item in the basket.

In the substitution-based measure, if a price of an item in the basket goes up, the item is removed from the basket, and a cheaper item is put in its place. For example, if the price of New York strip steak rises, the new CPI will substitute the price of a cheaper cut.

In this new measure, inflation is held down by measuring not a fixed standard of living but a declining standard of living.

The other adjustment used to restrain the measure of inflation is to re-classify many price rises as “quality improvements.” Price rises declared to be quality improvements do not translate into a higher measure of inflation. In other words, if a product rises in price, the price increase or some portion of it can be assigned to improved quality, not to a rise in component or energy costs. As the incentive is to hold down the inflation measure in order to save money for the government on Social Security cost-of-living-adjustments, quality improvements are overestimated.

Consumers have to pay the higher prices. Except for the 1 percent, incomes are not growing; so higher product prices, regardless of whether they are quality improvements, mean a lower standard of living for the 99 percent.

The understated new measure of inflation allows the government to show real gross domestic product growth and, thus, the end of the December 2007 recession. It also allows the government to show in the latest report real retail sales again matching the pre-recession level. However, when measured correctly, as by Williams, the true picture of retail sales shows a steep decline from 2007 through 2009 and bottom bouncing since.

The reason real retail sales cannot recover is that real average weekly earnings continues its downward path. Earlier in this new century, the lack of income growth for the bulk of the U.S. population was masked by a rise in consumer debt. Americans borrowed to spend, and this kept the economy going until the point was reached that consumers had more debt than they could service.

Williams’ report of real average weekly earnings shows that Americans are taking home less purchasing power than they did in the 1960s and 1970s.

Reflecting the dollar’s loss of purchasing power, the price of gold and silver in dollars has risen dramatically during the George W. Bush and Barack Obama regimes.

For the past year or two, the Federal Reserve and its dependent banks have operated to cap the price of gold at about $1,750. They do this by selling naked shorts in the paper speculative gold market.

There are two gold markets. One is a market for physical possession by individuals and central banks. The rising demand in the physical bullion market points to a rising price for gold.

The other market is the speculative paper market, in which financial institutions bet on the future gold price. By placing large amounts of shorts, this market can be used to suppress price rises in the physical market. The Federal Reserve, which can print money without limit, can cover any losses on its agents’ paper contracts.

It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the U.S. dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the U.S. financial bubble pops, with hell to pay.

To forestall Armageddon, the Fed and its dependent banks cap the price of gold.

The Fed’s fix is temporary; and as the Fed continues to create ever more dollars, the price of gold will eventually escape the Fed’s control, as will interest rates and inflation.

The Fed has produced a perfect storm that could consume the United States and perhaps the entire Western world.

Economic Funny Numbers

Anyone who was astonished to read the unemployment numbers had mysteriously dropped in September, should read this article by Bob Livingston. He nails down  the issue  and points out how in Washington, numbers, like their mistresses, need to be massaged. It has been going on for years and anyone who takes the numbers as gospel does not understand how our government works (or does not work.)

We expect another dose of funny numbers coming out the first week of November, just in front of the election.  We would expect another .3% drop, down to 7.5%. Now, that will not be the 6.0% we suggested earlier this year, however, the government still is dropping the numbers in front of the election which was our larger point. 

It also shows that if the government has to manipulate the numbers, things must be much worse than we suspect.  If Shadowstats.com is correct and the "real" unemployment is greater than 22%, we do have a Depression-like statistic. This in normal times would be a major political problem for the sitting President, however, due to the memory problems of the US populace, it does not seem to be.

One reason for this lack of clarity would be how people are paid now when they are no longer working. The major difference between the Great Depression and the Great Recession is that we do not see the unemployed lining up to get jobs. They are getting their unemployment or disability check at home, they are working at part time jobs, or taking money under the table for doing work. We do not see them, so it is if they do not exist!

We wonder how many of those who are either unemployed or underemployed will vote for this President. Will Romney's statement on the 47% be accurate? Three weeks from now, we will know.

Conservative Tom

Phony Numbers, Phony Recovery, Phony President

October 15, 2012 by Bob Livingston 

SPECIAL

Mark Twain once wrote, “There are three kinds of lies: lies, damned lies and statistics.” The phony jobs numbers issued last week and used by the phony President to tout a phony recovery are typical of the lies, damned lies and statistics spouted out daily by the political elites.

The elites walking the halls of power — the true 1 percent — are greedy and murderous psychopaths. They care nothing for their “subjects” and seek only more power, more money and more aggrandizement. They readily lie, cheat, steal and kill to achieve their goals.

The 7.8 percent unemployment number is a manipulated and meaningless figure. The Bureau of Labor Statistics cooks the books each month by using data it terms as “seasonally adjusted.” But this adjustment changes from month to month, and the BLS will not disclose what the adjustments are or how they are arrived at. It also does not tell the public that those factors change month to month.

John Williams at Shadowstats.com explains: “[T]he BLS knowingly has been preparing the seasonally-adjusted headline unemployment numbers on an inconsistent and non-comparable basis for some time. The September number was prepared using a different set of season factors than was used in coming up with the August number. The reporting difference can be large, when proper consistent month-to-month changes are used.”

In addition to applying nebulous and ever-changing seasonal adjustments, the numbers are based in part on information compiled by census workers conducting telephone surveys and home visits. They take monthly samples of 50,000 to 60,000 households in 31 States and the District of Columbia. Their criteria are ambiguous. For instance, the range for part-time work falls between one hour and 34 hours per week. “So if an out-of-work accountant tells a census worker, ‘I got one baby-sitting job this week just to cover my kid’s bus fare, but I haven’t been able to find anything else,’ this can be considered a part-time job,” writes Jack Welch in an op-ed in The Wall Street Journal.

Because of the subjective and open-ended nature of some responses, the opportunity for data manipulation is legion. There is also a motive for data manipulation. Government workers conducting these tests and compiling the data are members of the American Federation of Government Employees, which is part of the AFL-CIO. Unions are in the tank for the Democratic Party in general and President Barack Obama in particular.

Welch came under fire last week after he tweeted that he was skeptical of the sudden three-tenths of 1 percent drop in unemployment on the heels of Obama’s dismal debate performance.

As an aside, that debate revealed what I and many others have known for some time: Obama is a phony. He’s an empty suit (or chair) without the capacity for intelligent discussion beyond standard rote Marxist talking points, unless one of his masters has a hand up the back of his shirt in the form of a teleprompter. He has demonstrated this time and again through his choice of softball and heavily scripted interviews and the way he has responded as a petulant child to what few challenges he has received from the rare tough interviewer or the occasional Republican politician.

One of Welch’s critics last week was Austan Goolsbee, former chairman of the Obama regime’s Council of Economic Advisers. Demonstrating that, for the elites, history begins today and yesterday is irrelevant, Goolsbee conveniently forgets that just nine years ago he accused the George W. Bush Administration of cooking up phony unemployment numbers. In an op-ed piece for The New York Times published Nov. 30, 2003, Goolsbee wrote:

The government reported that annual unemployment during this recession peaked at only around 6 percent, compared with more than 7 percent in 1992 and more than 9 percent in 1982. But the unemployment rate has been low only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as “not in the labor force.”

In other words, the government has cooked the books. It has been a more subtle manipulation than the one during the Ronald Reagan Administration, when people serving in the military were reclassified from “not in the labor force” to “employed” in order to reduce the unemployment rate. Nonetheless, the impact has been the same.

Under Obama, disability roles have risen in excess of 3.6 million since 2008, meaning Obama is using the same method of concealing true unemployment as the hated Bush.

According to Shadowstats, data manipulation has its roots in the Richard Nixon Administration. Williams writes that Nixon proposed that the BLS release each month one unemployment number — the one that was most favorable to the Administration — but not reveal whether it was the seasonally adjusted or unadjusted number. While there is no evidence this tactic was ever used, it demonstrates the mindset in Washington.

Even if one takes the official 7.8 percent number and BLS statistics at face value, they’re still nothing to crow about. Besides, the 7.8 percent number will not remain static. The BLS revises the data regularly and won’t issue a final number for the month until January, long after the election and when the September number is no longer relevant. The September number could change four or five times before January.

According to the BLS, total nonfarm payroll employment increased by only 114,000 in September. That’s not enough to keep up with population growth. It’s also 32,000 fewer jobs than the monthly average for this year, and 39,000 fewer jobs than the monthly average in 2011. Manufacturing jobs declined by 16,000 and overall have been unchanged since April. Yet we are to believe unemployment dropped?

The number of people employed part-time for economic reasons (that is they took part-time work because their hours were cut back or it was the only work available to them) rose from 8 million to 8.6 million. Another 802,000 dropped from the labor force and weren’t counted in the jobless data, and they became part of the 2.5 million considered marginally attached to the labor force because they “wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.”

Despite the rah-rah chanting of Obamaphiles, the truth is the number of people employed is near where it was in 2000 and well below where it was at its 2007 pre-recession peak. Actual unemployment, according to Shadowstats, exceeds 22 percent.

The Feds are likewise manipulating the inflation data. Called the Consumer Price Index (CPI), it is a measure of inflation based on the cost of a basket of goods. But the contents of the basket changes from time to time. Politicians like this because it is used to determine, among other things, the annual cost-of-living adjustments for Social Security. By manipulating the contents of the basket of goods, rising inflation can be masked and Social Security adjustments can be kept artificially low.

Using pre-Bill Clinton CPI methodology (that is, methodology employed until 1990), CPI inflation in August (September numbers are due out tomorrow) was 5.6 percent. Using methodology employed in 1980, CPI inflation in August was 9.3 percent, according to Shadowstats.

This is all part of the ongoing war on American seniors and savers being waged by the psychopaths in Washington.