When it comes to the unemployment rate, it’s nice to be president.
Sure, it wasn’t so nice for President Obama in October 2009, when the federal Bureau of Labor Statistics declared the rate was 10 percent. But exactly a year from Election Day 2012, the rate began a precipitous plunge, first to 8.9 percent, then the next month, to 8.7, then to 8.5. And just last week, the BLS said the rate had fallen all the way down to 8.3 percent.
If the spectacular “recovery” keeps up at the same pace, the rate will be 6.3 percent by Nov. 6. It hasn’t been that low since — well, all but four of the 96 months George W. Bush was in office. But you get the point. America is back!! Woo-hoooo!!
So, spectacular news for the president, yes? And fantastic news for America, right? Uh, yes. And absolutely no.
See, the BLS boys, no doubt at the president’s direction, are busy rewriting the rules, and they’re in uncharted, and unchecked, territory. The federal government Friday declared that the U.S. had created — not “saved,” mind you, “created” — 243,000 jobs. Amazing, right?
But wait, what’s that little asterisk here? A record 1.2 million Americans left the labor force? 1.2 million?! Well, where’d they go? Oh, just left? Well, OK. But no, wait. What does that even mean?
Zerohedge.com’s Tyler Durden (the first rule of … eh, you know the rest) precisely spelled out the government version of “Project Mayhem”:
“A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55 percent. Looks like the good folks at the BLS heard us: It appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non-institutional population increased to 242.3 million, meaning those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30-year low of 63.7 percent as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation.”
The labor force rate — all workers more than 16 years old — climbed above 66 percent in October 1988. It stayed there throughout the term of President George H.W. Bush, and topped 67 percent for 40 consecutive months during President Clinton’s two terms. The rate stayed above 66 percent for almost all of President George W. Bush’s two terms.
But the month Mr. Obama was elected, the rate dropped to 65.8 percent. By the end of his first year in office, the BLS said the labor participation rate was just 64.6 percent. And last month, for the first time in nearly 30 years, the rate dropped all the way down to 63.7 percent.
Still, month after month, the mainstream media laps up reports of a falling unemployment rate. “U.S. Jobless Rate Falls to 8.3 Percent, a 3-Year Low,” blared the New York Times. “The nation’s unemployment rate dropped for the fifth straight month, to 8.3 percent, its lowest level in three years, the Labor Department reported Friday, with widespread hiring across the economy,” declared the Washington Post.
Clearly, they hadn’t read the major financial papers the month before. When the unemployment rate dropped to 8.5 percent in December, the Financial Times wasn’t convinced. “According to government statistics, if the same number of people were seeking work today as in 2007, the jobless rate would be 11 percent.”
And they must have ignored the Gallup write-up the month before: “The sharp drop in the government-reported unemployment rate for November and the sharp drop in jobless claims during the most recent reporting week have combined to create the perception that the job market may be improving … . In contrast, Gallup’s data suggest little improvement in the jobs situation.” The organization concluded: “It may be wise to exercise caution in interpreting the drop in the government’s most recent jobless claims numbers.”
No one in the mainstream media, busy rewriting the government’s press release on Friday, will bother to question the newest number, or explore what trimtabs.com CEO Charles Biderman said that very day: “Actual jobs outstanding, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments — made at the sole discretion of the Bureau of Labor Statistics economists — that 2.9 million less jobs gets translated into 446,000 new seasonally adjusted jobs for January and December.
“No one I know has any idea as to how the BLS does this seasonal adjustment,” he said.
When Project Mayhem has run its course, Tyler Durden (the other one), looking out across the city, where banks and financial institutions are about to implode, says: “Out these windows, we will view the economic collapse. One step closer to global equilibrium.”