YOU READ IT HERE FIRST…
Last February 4th, I ran a piece about a ‘fall’ in the US Labor Department’s unemployment levels – the ‘non-farm payroll data’. At the time, I wrote this:
‘Take, for example, the so-called ‘broken community’ effect. This pertains when somewhere dedicated to one business – like Detroit – goes south. Almost everyone loses their job in the region, as the American global share of car sales plummets. The outlook appears to be hopeless, so many workers simply stop looking for a job. Stop looking, and you slip off the unemployment figures. You’re still jobless, but you’re not officially jobless.’
Two months on, and last Friday the same Labor Dept revealed how 120,000 jobs were added in March. That’s well below average expectations - the mean average prediction was 230,00 – and so more head-scratching took place in the MSM.
But there is a thing called the U6 rate. This looks beyond the official 8.2% unemployment rate, and more closely at those who’ve essentially given up looking for work….as per my ‘Detroit’ observations. This rate delivers a far more alarming figure: 14.5%.
I said back in February that the US recovery was a mirage. Now we see that the 120,000 jobs added in March represented the smallest increase since October 2011.
On January 7th last, I posted a blog headed ‘US Labor statistics offer no sign of a real recovery at all’. Therein, I suggested:
‘The picture that emerges is one of seasonal gains in employment, and very little more. But there is also an undercurrent of fiddling too. Not mentioned in the headline figures, for example, is a whopping group (2.5 million) described as ‘marginally attached to the economy’. Actually, they too are unemployed folks, but kind of off-balance sheet to use the common spin vernacular. They are defined thus: (my italics)….2.5 million persons were marginally attached to the labor force in December, little different from a year earlier. These individuals were not in the labor force, 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.’
The entire story of these data – from about November 2011 onwards – is one of a White House grasping at straws, while using every trick in the book to suggest that the economy is back on the up….so that Barack Obama can get re-elected. But the economy is, after a gap in QE for some time now, flatlining. In many ways, Ben Bernanke holds the eventual result of the contest in his hands.
The Slog has said several times that the 2012 Presidential Election is a race against time rather than between two candidates. My gut tells me that the Obamite position is on a knife-edge here: if the real economic state – and the European meltdown – are well onto the radar by August, then this isn’t going to be the one-horse race many expect.
But oh, if only I felt Mitt Romney might be any better than Obama…