October 30, 2012

The Unemployment Rate is Not the Best Measure of the Economy or a President

A friend sent me and many others this email :
"To: anyone who will listen.....
Since I've been trying to pay attention to the spin by both sides as we approach Nov. 6, (I've already voted, btw---for Obama), I went to the website of the Bureau of Labor Statistics, and found the following eye-opening chart. It clearly shows the decline in the unemployment rate during the Bush years, then the precipitous climb (a loss of 2.5 million jobs) during his last year in office. The trend continued when Obama took over the mess, and, since '09, a steady, gradual decline in UNEMPLOYMENT.
What I'd like to know is why this clear picture isn't being plastered ALL OVER for everyone to see......let's get going!!!!!"
Accompanied by this chart :
My response to her (Using BLS data):

The unemployment rate and the way it is determined tells only part of the economic story and is relied on far too heavily by the sound-bite media.

The reality is that in August 2012, we had about the same non-farm payroll (133,244,000) as we did in January of 2005 (132,453,000). In Jan 2008 it was 138,023,000.
In January 2009 it was 133,561,000. Meanwhile, the population has grown from 295,753,000 to 314,159,000 or 18,406,000 since January 2005. So, Obama spin claims to have created 5 million jobs, yet the number of people working has not increased since he took office.

This also means that the number of working Americans is essentially the same as it was 7 years ago while the population has increased by 6.2%.

Meanwhile the median household income (inflation adjusted) looks like this:
2005 $53,371
2008 $52,546
2011 $50,054
Change = -6.2%

So, looking at the economy from the data about workers and population and household income, shows a very weak economic recovery, one that does not provide sufficient good paying jobs for our people, many of whom have dropped out of the workforce and/or stopped looking for work These people are not included in the unemployment rate determination. Some estimate the true unemployment rate to be closer to 11-12%.

I’d love to talk more about this with you, but Obama’s positive contribution to the economic ‘recovery,’ such as it is, is de minimus, despite he and the Congress increasing the debt by ~ 6 $Trillion to stimulate it.

All spin aside, the media and we give far too much credence to the power of a President over the economy. Congress is the real player, albeit heavily influenced by the President, when it comes to fiscal and economic policy and their record is dismal. For example, the Senate has not passed a budget in more than three years.

Romney’s approach makes more sense to me than another 4 years of Obama.
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