Who needs the Bureau of Labor Statistics (BLS), when you have Rush Limbaugh? Limbaugh predicted almost a year ago that the unemployment rate reported last Friday would fall below 8% for the first time since Obama entered office. Limbaugh by his own admission is no economist. So how did he know? Maybe because we are in the realm of politics now, rather than economics.
How Stupid Do They Think We Are?
The BLS reported last Friday that the economy in September created all of 114,000 net new jobs, just 104,000 in the private sector. To give you some context for how great that is, the working age population increased by 206,000 in September. With a labor force participation rate normal for the fourth year of a recovery (where we are right now), just keeping pace with that population growth would require 138,000 new jobs, before we can even start to reduce the unemployment rate.
Indeed, since Obama became President, the working age population has increased by 8.4 million. At the same labor force participation rate as when Obama entered office, that would require 5.52 million new jobs just to keep pace with that population growth. The total number of net new jobs created since Obama became President according to the BLS: 787,000.
But not to worry. The BLS also reported on Friday that the number of full time jobs actually declined last month by 216,000. Thank you, President Obama. You are doing a great job. Socialism is finally working. Forward. Why would we ever consider turning back now?
So how did the reported unemployment rate fall to 7.8%, down from 8.1% in August, and 8.3% in July? That is because the BLS (might consider dropping the L) also reported that the separate Household Survey, on which the unemployment rate is based, found a giant 873,000 jump in jobs last month, the biggest one month increase in nearly 30 years! That makes sense because the same survey found a decline in jobs of 119,000 in August and 195,000 in July.
Of course, 582,000 of those supposed jobs were part time "for economic reasons." The BLS defines that as "individuals [who] were working part time because their hours had been cut back or because they were unable to find a full-time job." That is not all good either. But a part-time job is better than no job at all.
The supposed sudden surprise spurt in September jobs in the Household Survey provided another gift to Obama. By August, for Obama's entire term in office the economy had created less than zero jobs. In the more than three and a half years from Obama's inauguration until then, the economy in total had lost 86,000 jobs. But the September surprise spurt of 873,000 jobs put Obama in the plus territory for his entire term with a grand total of 787,000 jobs created. Creating 787,000 jobs would be one ordinary month in the Reagan recovery, where the largest gain in one month was 1.1 million jobs in September, 1983. That was not an anomaly then, when the economy was on the way to creating 20 million new jobs in 7 years.
The supposed sudden explosion of Household Survey jobs is inconsistent not only with the 114,000 jobs found in the Establishment Survey of employers. It is also inconsistent with the reported GDP growth of 1.3% in the second quarter, which has been declining for over two years. Monthly job creation of 873,000 would require economic growth 3 to 4 times that large, at least.
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