Over at the White House they must have thought is really was a "good Friday" when last week's jobs report showed unemployed had dropped to 8.2 percent in March. The anemic state of the economy, especially the jobless figures, has flummoxed the president for most of his term so any decline in the unemployment rate is considered good news.
It's a political problem for the president, not just an economic one. People remember his promise that unemployment would not exceed 8 percent if Congress enacted his stimulus program. Instead it shot up, getting as high as 10.1 percent in October of 2009. So the fact that it is down by almost two points should be a sign things are turning around which, in turn, improve the president's chances of winning a second term.
Unfortunately for him—and for everybody else—the numbers are not as good as they seem on the surface. The growth in payroll employment of 120,000 jobs, which was just about half what analysts projected, is barely enough to keep up with the overall growth in the labor force. Rather than a sign of improvement, it's an indication that, where jobs are concerned, America is just treading water.
Other dispiriting aspects of the April report:
- March 2012 set a record of 88 million individuals not in the labor force
- Women continue to leave the labor market with over 177,000 leaving in March
- Labor force participation fell again continuing its decline over the last several years. In January 2009, it was 65.7 percent. In March it fell to 63.8 percent.
"There is no reason to celebrate these numbers. They are depressing," said Roger Morse, a senior fellow in political economy at the nonpartisan Institute for Liberty—where I am also a senior fellow. "The unemployment number ticked down because so many people gave up looking for work and have exhausted their unemployment benefits."
Crunching the numbers, if the labor force was the same size it was when Obama took office, the unemployment rate would be at least a point and a half higher. Some people call that the "missing worker" phenomenon, referring to the people who have simply given up looking for work and, therefore, do not figure into the numbers. What it means, in real terms, is that the 8.2 percent number is, at best, misleading.
"The key figure was the number of jobs created, which was only 120,000. The economy had been creating about 220,000 jobs per month for January and February this year," Morse continued. "Compare those figures with 1984 when the Reagan policies were creating over 400,000 jobs per month coming out of the recession and stayed at that level through the election."
That so many people have stopped looking for work because the jobs are just not there and with millions more "underemployed," the economy still has a long way to go before it recovers. Moreover, the fact that 12.7 million people looking for work still cannot find jobs provides little reason for celebration. President Obama still blames the state of the economy on the previous administration, after almost four years. The time for him to accept responsibility has long passed. If he really wants to get the economy moving again he is going to have to change his economic policies, but there is little sign he is ready or even willing to do so.