According to the Labor Department’s announcement this morning, American unemployment in September was 7.8%. Don’t get excited. Once again the unemployment rate dropped entirely due to Americans giving up looking for work.
Just to keep unemployment at 8.1%, without the further drop in the labor-participation rate America would have needed to create 125,000 jobs. Per BLS’ data, 114,000 net new jobs were added, including part-time position. But again this month BLS dropped over 350,000 Americans from the labor force — a similar number to what they did in computing the August rate which dropped to 8.1% from 8.3%.
So basically, America has now added 200,000 net new jobs the past two months and lost 700,000 Americans from the roles of job seekers which caused our unemployment rate to drop from 8.3% in July to 7.8% today.
BSL has now determined that basically 4.5 million Americans who were in the Labor force in 2008 have now given up looking for work. According to BSL, America’s labor-force participation rate is now over 4% lower than what it was before the recession began. The BLS’s announcement was largely in line with data released by ADP in its monthly report, which indicated an increase in payroll employment of 165,000. With under five weeks remaining before the election, American unemployment stands nearly 1.5% lower than it was a year ago.
Yet 45 consecutive months have now occurred with unemployment at or near historic highs. Our highest monthly unemployment rate post-depression was 10.3% in 1982. It is worth noting our ongoing struggles recovering from the Great Recession have largely caused the political debate to understate how significantly lack of job creation continues to affect the economy.
It is easy to forget the 2008 October unemployment rate of 6.5% was a 14-year high for Americans. Today we realize the United States was already a year into the Great Recession by October of 2008. The 7 million Americans unemployed in October of 2008 had grown by basically 2 million since the beginning of the economic downturn in the 4th quarter of 2007.
While few people today look back on 2007 as “The Good Old Days,” the October 2007 unemployment rate with a 68% participation rate was 4.7% and GDP growth including the onset of the recession was more than double today’s level.
There is a very simple basic reason our national deficit has increased from $170 billion in fiscal year 2007 to over $1 trillion per year, the unemployed pay no taxes.
So what does this all mean to you and I or in the context of the presidential election.
Voter’s perspective on the recovery due to their respective bias is significantly different.
The old line often associated with presidential elections, “Are you better off today than four years ago?,” arguably isn’t as effective today as it once was.
With a most likely to vote population skewing toward an older demographic, today’s unemployment numbers are not as significant to those individuals as issues such as entitlement solvency and security.
To voters in their prime earnings years, unemployment rates do not matter as much as overall economic vitality and the future outlook for investment earnings which can help them build a net-egg toward retirement.
For millennials fighting to build their respective role in the economy, the opportunity to join the workforce, advance professionally and develop wage growth is obviously a critical factor in how they factor their voting decision.
Even using this overly simplistic perspective, drilling down through the respective polling data by subsection of the economy lends some insight to why different blocks view this election uniquely.
Today’s unemployment rate announcement can be viewed in many lights both positive and otherwise.
What you must decide is, who do you believe represents an agenda which will place America on the correct policy course to ensure your economic goals are realized?