Another Phony Employment Report
Today’s employment report from the Bureau of Labor Statistics shows
114,000 new jobs in September and a drop in the rate of unemployment
from 8.1% to 7.8%. As 114,000 new jobs are not sufficient to stay even
with population growth, the drop in the unemployment rate is the result
of not counting discouraged workers who are defined away as “not in the
According to the BLS, “In September, 2.5 million persons were marginally
attached to the labor force.” These individuals “wanted and were
available for work,” but “they were not counted as unemployed because
they had not searched for work in the 4 weeks preceding the survey.”
In other words, 2.5 million unemployed Americans were not counted as unemployed.
The stock market rose on the phony good news. Bloomberg’s headline: “U.S. Stocks Rise as Unemployment Rate Unexpectedly Drops,” http://www.bloomberg.com/news/2012-10-05/u-s-stock-futures-little-changed-before-payrolls-report.html .
A truer picture of the dire employment situation is
provided by the 600,000 rise over the previous month in involuntary
part-time workers. According to the BLS, “These individuals were working
part time because their hours had been cut back or because they were
unable to find a full-time job.”
Turning to the 114,000 new jobs, once again the jobs are concentrated in
lowly paid domestic service jobs that cannot be offshored.
Manufacturing jobs declined by 16,000.
As has been the case for a decade, two categories–health care and social
assistance (primarily ambulatory health care services) and waitresses
and bartenders account for 53% of the new jobs. The BLS never ceases to
find ever growing employment of people in restaurants and bars despite
the rising dependence of the US population on food stamps. The elderly
are rising as a percentage of the American population, but I sometimes
wonder if employment in ambulatory health care services is rising faster
than the elderly population. Whether these reported jobs are real, I do
The rest of the new jobs were accounted for by retail trade,
transportation and warehousing, financial activities (primarily credit
intermediation), professional and business services (primarily
administrative and waste services), and state government education,
where the 13,600 reported new jobs seem odd in light of the teacher
layoffs and rise in classroom size.
The high-tech jobs that economists promised would be our reward for
offshoring American manufacturing jobs and tradeable professional
services, such as software engineering and IT, have never materialized.
“The New Economy” was just another hoax, like “Iraqi weapons of mass
destruction” and “Iranian nukes.”
While employment falters, the consumer price index (CPI-U) in August
increased 0.6 percent, the largest since June 2009. If the August rate
is annualized, it means bad news on the inflation front. Instead of
bringing us high tech jobs, is “the New Economy” bringing back the
stagflation of the late 1970s? Time will tell.
This article first appeared at Paul Craig Roberts' new website Institute For Political Economy.
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic
Policy and associate editor of the Wall Street Journal. He was
columnist for Business Week, Scripps Howard News Service, and Creators
Syndicate. He has had many university appointments. His Internet
columns have attracted a worldwide following.
Thanks to: http://www.activistpost.com