Economy Actually Lost 2.7 Million Jobs in January
Obama’s entire claim that the economy is reviving is based on phony numbers and rigged statistics. Nothing is more misleading than the recent administration claim that the economy added over 200,000 jobs during each of the past three months and that unemployment is stable at 8.3 percent.
Dr. John Hussman of the Hussman Fund says that the claims of job gains are based entirely on weighted figures. “Total non-farm employment in the U.S., before seasonal adjustments, fell by 2,689,000 jobs in January.” Then the spin doctors at the Bureau of Labor Statistics went to work. Hussman explains: “because its typical for the economy to lose a large number of jobs after the holidays, largely in retail trade, construction and manufacturing, the BLS estimated that the ‘normal’ seasonal decline in employment should have been 2,932,000 jobs in January. The difference between the two numbers … was 243,000 jobs, which was reported as an increase in employment.”
Hussman notes that this “adjustment” in 2011 and 2012 was far more extreme than in any previous year since the 1960s. Had the standard adjustment been used, instead of the souped-up figure BLS applied, the total number of new jobs created would be only about 60,000 for January.
And even that may be an overestimation.
Hussman points out that, “Moreover, we’ve had a remarkably mild winter in the U.S, particularly in January, and it’s clear that this has favorably affected both construction and retail activity. Ironically, however, nothing in the seasonal adjustment actually adjusts for this purely seasonal effect.”
The stable-unemployment-rate fantasy is also based on a steady decline in the number of people in the labor force, despite population increases. The current number of people in the labor force — the denominator in determining the unemployment rate — is the lowest since 1981. Economist Peter Morici writes that “If the adult participation rate (in the labor force) was the same today as when Barack Obama became president, unemployment would be 11 percent.”
Morici also notes that, “Adding adults …who say they re-enter the labor market if conditions improved and part-time workers who would prefer full-time positions, the unemployment rate becomes 15.2 percent. Factoring in college graduates in low skill positions, like counterwork at Starbucks, and unemployment is closer to 20 percent.”
Such is the happy math upon which the administration bases its claims of economic recovery.
Gallup, which predicts election results with incredible accuracy, uses the same survey methodology to develop its own unemployment rate and now reports that it stands at 9.1 percent, a 0.6 percent increase since last month.
Fortunately, the American people are using their own eyes, not Obama’s statistics, to figure out what is really going on. Obama’s approval ratings, as measured most accurately by Gallup and Rasmussen, show a drop from 51 percent a month or two ago to the low 40s now. And Rasmussen shows Romney beating Obama by four to six points. At 42 percent of the vote in the trial heat, the president is facing a crushing defeat, since the vast bulk of the undecided vote always goes against the incumbent.
With gas prices surging, the economic data will only get worse. The Congressional Budget Office report on the economy predicts slow growth and higher unemployment in the near future, and Hussman says that “overall, an economic downturn remains the most likely prospect.”
The ability of my former Democratic brethren at self-deception is legendary, but the current optimism about both the economy and their chances of holding the White House and the Senate — and regaining the House? — is downright nuts.