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Sep
24

Bad News, Worse

Mort Zuckerman dissected the latest jobless numbers and found a lot of trouble for Team Obama.

Don't be fooled by the headline unemployment number of 8.1% announced on Friday. The reason the number dropped to 8.1% from 8.3% in July was not because more jobs were created, but because more people quit looking for work.

The number for August reflects only people who have actively applied for a job in the past four weeks, either by interview or by filling an application form. But when the average period of unemployment is nearly 40 weeks, it is unrealistic to expect everyone who needs a job to keep seeking work consistently for months on end. You don't have to be lazy to recoil from the heartbreaking futility of knocking, week after week, on closed doors.

How many people are out of work but not counted as unemployed because they hadn't sought work in the past four weeks? Eight million. This is the sort of distressing number that turns up when you look beyond the headline number.

Here's another one: 96,000—that's how many new jobs were added last month, well short of the anemic 125,000 predicted by analysts, and dramatically less than the (still paltry) 139,000 the economy had been averaging in 2012.

The alarming numbers proliferate the deeper you look: 40.7% of the people counted as unemployed have been out of work for 27 weeks or more—that's 5.2 million "long-term" unemployed. Fewer Americans are at work today than in April 2000, even though the population since then has grown by 31 million.

A lot of pundits on the right are pointing to this election as a repeat of 1979 - especially after the foreign relations disaster that was the last two weeks of the Obama Administrations reactions to the events in the Middle East.  However, these jobs numbers coupled with the Administrations "We've done such a great job on the economy" attitude brings to mind a more recent election.  The election of 1992 saw a challenger whose campaign ran on one simple phrase...."It's the economy, stupid.".  James Carville turned that simple phrase into campaign gold for Bill Clinton. 

Human Events magazine lists out ten reasons why this really is a flashback to 1992.  Of the 10 reasons, these are the ones that are most personal to the voters....

1. Unemployment rate

Despite his promise that the nearly $1 trillion 2009 economic stimulus would get America working again, the unemployment rate has been above 8 percent for 43 straight months. The current 8.1 percent jobless rate woefully understates the reality of problem. When taking into account people working part-time who want a full-time job and those who have given up looking for work, the rate is over 15 percent. Add in recent college graduates working at McDonald’s at the rate tops 18 percent.

3. Economic growth

Remember the “recovery summer” that Joe Biden promised in 2010? Or how Obama’s stimulus package was going to get the economy moving with all those “shovel-ready” jobs? The latest GDP report showed anemic 1.7 percent growth in the second quarter as any short-term benefit from Obama’s fiscal shot-in-the-arm has faded and now the nation is facing the possibility of a double-dip recession.

5. Household income

Considering that consumer spending constitutes the bulk of the nation’s gross domestic product, the loss in household income bodes ill for future economic growth. In addition to being squeezed by higher prices, families have seen their average income drop from $54,916 to $50,969 during Obama’s presidency. Add in the housing crisis which damaged the net worth of many families, and there is little hope for a consumer-driven recovery.

6. Gas prices

In 2009, when Barack Obama was inaugurated president, the price of gasoline was $1.81 per gallon. Since then it has more than doubled, nearing $4 per gallon, and that was before the recent Middle East turmoil threatened to drive prices up. While such events are beyond the control of any president, Obama’s reluctance to fully develop domestic oil resources and the delay of the Keystone pipeline contribute to the supply-and-demand problem.


9. Inflation

Don’t look now, but inflation is gearing up to come roaring back. The consumer price index rose 0.6 percent in August and with severe drought in many parts of the United States, food prices are likely to take a price hike. And with the Federal Reserve starting to pump many billions of dollars into the money supply through its QE3 plan, the value of the dollar will surely erode.

Numbers 5 and 9 are the keystones.  When your take home pay is stagnant or going down (as some companies are cutting salary in order to keep jobs)  and the cost of EVERYTHING that you need to take care of your family is leaping up you are going to feel the pain of inflation HARD.  Couple that with gas prices which are going up again and there is going to be considerable pain in the pocketbook felt by the voters.  And when the voters are feeling that kind of pain in the pocketbook...they let the people in power know - in no uncertain terms just how unhappy they are.

President Obama is facing a very high election hurdle - which is why you see the agenda media working overtime to push this bad economic news off of the front page as quickly as they can.  However you can't sweep the economic pain under the rug - that will always be there.  Ultimately, that is all the voters are going to take into the polling place with them.

 

Written by LL.

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