Obama Touts 7.8% Unemployment Rate, Manufacturing lost 16000 jobs

The Bureau of Labor Statistics September Jobs report was released this morning and showed a 114,000 jobs increase in September.  But during the end of last month the BLS revised employment numbers upward just in time for an election.  The labor for participation rate has increased by only 0.1% which is still at decade lows.

The Obama Administration put out a statement touting the numbers.

The Employment Situation in September

While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007.

Most pressing, Congress should pass an extension of middle class tax cuts that President Obama proposed, and the Senate passed.  This extension would prevent the typical middle class family from facing a $2,200 tax increase at the beginning of next year. In addition, the President has proposed a plan that will enable responsible homeowners to refinance their mortgage and take advantage of today’s historically low interest rates. To create more jobs in particularly hard-hit sectors, President Obama continues to urge Congress to pass elements of the American Jobs Act, including further investment in infrastructure to rebuild our Nation’s ports, roads and highways, and assistance to State and local governments to prevent layoffs and to enable them to rehire hundreds of thousands of teachers and first responders.

Today’s report from the Bureau of Labor Statistics (BLS) shows that private sector establishments added 104,000 jobs last month, and overall non-farm payroll employment rose by 114,000. Revisions to the previous two months added another 86,000 jobs.  The economy has now added private sector jobs for 31 straight months. Taking account of the preliminary benchmark revision (+453,000) released last week, the economy has added a total of 5.2 million private sector jobs during that period.

The household survey showed that the unemployment rate fell from 8.1 percent in August to 7.8 percent in September, the lowest rate since January 2009.  Labor force participation rose by 418,000 people in September, and the labor force participation rate rose by 0.1 percentage point. Over the last 12 months, the unemployment rate has decreased by 1.2 percentage points, the largest drop since February 1995.

Employment rose notably in health care and social assistance (+44,500), transportation and warehousing (+17,100), restaurants and bars (+15,700) financial activities (+13,000), and professional and business services (+13,000). Manufacturing lost 16,000 jobs, primarily in durable goods (-13,000).

As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.

Alan B. Krueger is Chairman of the Council of Economic Advisers.

No matter how the Administration spins the report, the numbers are still dismal.  The labor force has diminished as workers have become so discussed with the job search they have simply dropped out.  The unemployment numbers do not reflect those who stopped looking for work.

The Republicans put out a rebuttal statement shortly after the numbers were reported:

WASHINGTON – Republican National Committee (RNC) Chairman Reince Priebus released the following statement on the September jobs report:

“Too many Americans are still struggling for work in today’s economy, and for too many families, the last four years has seen declining wages and increasing costs,” said RNC Chairman Reince Priebus. “High unemployment remains a chronic condition in America, the seriousness of which is measured not simply by one number but by the millions of families trying to make ends meet in an impossible economy.”

“Americans cannot afford four more years like the last four years. And as Wednesday night’s debate made clear, only one candidate has a plan to take us toward a better future. While Governor Romney has a plan that will create 12 million new jobs, President Obama only has a plan for higher taxes, which will destroy 710,000 jobs. The middle class is crying out for relief, and the president proposes to keep burying them.

“Four years ago, Barack Obama vowed he understood our problems and possessed the solutions. With a massive stimulus, he promised unemployment below 5.5 percent by today. If the number of people in the workforce were the same as when he took office the unemployment rate would be nearly 11 percent.

“After four long years in office, unemployment is still much higher than the standard he set for himself.”

Simply put, the Obama Administration is hoping that voters will forget what he promised upon taking office.  Specifically that the Stimulus and his policies would bring Unemployment down to 5.5% by this time.

Labor Secretary ‘Insulted’ By Claims Job Numbers Were Rigged

Excerpted from The Hill: Labor Secretary Hilda Solis said she is “insulted” by charges Friday from conservatives who say the Obama administration manipulated September’s jobs report to boost the president’s reelection chances.

Solis said the claims — by Rep. Allen West (R-Fla.) and former General Electric chairman Jack Welch — that her department fudged the employment numbers were “ludicrous.”

“I’m insulted when I hear that, because we have a very professional civil service organization where you have top, top economists,” Solis said on CNBC.

“These are our best trained and best skilled individuals working at the (Bureau of Labor Statistics). It’s really ludicrous to hear that kind of statement.”

Solis was pushing back after West and Welch, in separate posts on social media, questioned the Bureau of Labor Statistics (BLS) report showing the unemployment rate fell from 8.1 percent to 7.8 percent.

The economy added 114,00 jobs in September, according to the BLS. The report also revised job growth figures up in July and August, and it showed more people are now entering the workforce.

“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” Welch tweeted after the jobs data was released.

via Labor Secretary ‘Insulted’ By Claims Job Numbers Were Rigged

Check U-1, U-2, U-3 (official), U-4, U-5 and U-6 unemployment rates in US

So what do U1-U6 Mean?  Below is an overview of these six metrics

  • U1:

This is the proportion of the civilian labor force that has been unemployed for 15 weeks or longer. This unemployment rate measures workers who are chronically unemployed. During business-cycle expansions, this rate captures structural unemployment. However, during lengthy business-cycle contractions, this rate is also likely to include a significant amount of cyclical unemployment. U1 tends to be relatively small, in the range of 1-2 percent.

  • U2:

This is the proportion of the civilian labor force that is classified as job losers (workers who have been involuntarily fired or laid off from their jobs) and people who have completed temporary jobs. During business-cycle expansions, this rate is likely to capture some degree of frictional unemployment. However, during business-cycle contractions, this rate is most likely to consist of cyclical unemployment. U2 is larger than U1, but still remains substantially less than the official unemployment rate (U3).

  • U3:

This is the official unemployment rate, which is the proportion of the civilian labor force that is unemployed but actively seeking employment.

  • U4:

This is the official unemployment rate that is adjusted for discouraged workers. In other words, discouraged workers are treated just like other workers who are officially classified as unemployed, being included in both the ranks of the unemployed and the labor force. It is technically specified as the proportion of the civilian labor force (plus discouraged workers) that is either unemployed but actively seeking employment or discouraged workers. The addition of discouraged workers generally adds a few tenths of a percentage point to the official unemployment rate.

  • U5:

This augments U4 by including marginally-attached workers to the unemployment rate calculation. Marginally attached workers are potential workers who have given up seeking employment for various reasons. One of these reasons is that the workers believe such effort would be futile, which places them in the discouraged worker category. Those who have other reasons for not seeking employment are placed in the broader marginally-attached workers category. The addition of marginally-attached workers adds a few more tenths of a percentage point to the official unemployment rate.

  • U6:

This augments U5 by including part-time workers to the unemployment rate calculation. The addition of part-time workers adds a full 2-3 percentage points to the official unemployment rate. This measure of unemployment is perhaps the most comprehensive measure of labor resource unemployment available.

via Portal Seven | U6 Unemployment Rate.

 

 

 

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