NYC Letter: Pants On Fire VII

Day 140 of CHOPE

We began by passing a Recovery Act that has already saved* or created over 150,000 jobs and provided a tax cut to 95 percent of all working families.

Mr. Obama,
bragging on his largely unspent $787B stimulus plan
claiming 150,000 undocumented jobs created or saved*
PRESS CONFERENCE April 29, 2009 (White House)

On Friday we learned we had lost an additional 345,000 jobs in the month of May. Now that was far less than expected, but it's still too many. ... And it's a reminder that we are still in the middle of a very deep recession that was years in the making and it's going to take a considerable amount of time to pull out of. Having said that, this was the fewest number of jobs, ah, that we have lost, ah, eh, in about eight months. So it was about half of the number lost just a few months ago.

And it's a sign that we're moving in the right direction.

Mr. Obama,
explaining how the half-empty employment glass
is really brimming with his 150,000 "saved*
or created" stimulus jobs**
June 8, 2009 (YouTube/Bloomberg)

Say what? [We re-read the above.] A little background is in order.

The Bureau of Labor Statistics (BLS) produces a monthly current Employment Situation Summary. This report uses two surveys to depict employment:

1. The Current Population Survey (CPS), or "Household Survey", conducted by the Census Bureau, is based on a sample of about 60,000 households. The data from this survey is used to calculate the number of unemployed and the unemployment rate (scil., measure U3).
2. The Current Employment Statistics survey (CES), or "Payroll Survey", conducted by the BLS, is based on a sample of 160,000 businesses and government agencies representing 400,000 individual employers. Using the CES data, the BLS calculates the number of lost or created (not "saved"*) jobs against the previous survey period.

It is the latest B number -- 345,000 jobs lost -- that Mr. Obama believes is a sign his policies are moving things along in the "right direction". To believe as Mr. Obama believes, you must believe Mr. Obama and completely skip the A numbers -- the unemployed and the unemployment rate.

The number of unemployed persons increased by 787,000 in May. That is over and above the 563,000 increase of April, which was over and above the 694,000 increase of March, which was over and above the 851,000 increase of February after Mr. Obama's stimulus.

When Mr. Obama took office the number of unemployed persons was 11.6 million and the unemployment rate was 7.6%. In February after Mr. Obama signed his stimulus into law the number of unemployed was 12.5 million and the unemployment rate was 8.1%. Today the number of unemployed is 14.5 million, an increase of 2.9 million (+25%) and 2 million (+16%), respectively, and the unemployment rate is 9.4%,*** a jump of 1.8% and 1.3%, respectively. A year ago, May 2008, the number of unemployed persons was 8.5 million and the unemployment rate was 5.5%. Now consider this:

Despite the recession [Mr. Bush] inherited, 09.11, stock market scandals, Hurricane Katrina and two wars, in Iraq and Afghanistan, the unemployment rate during the Bush years averaged out to 5.27%.

Certainly there are many ways to characterize these data, but "moving in the right direction" is a fairy tale and Mr. Obama knows it, which makes it a dishonest fairy tale.

And here is the really bad news.

America already has double-digit unemployment.

In fact, the real unemployment rate, as opposed to the official rate, is well over 15 percent.

That's because the official unemployment rate -- which as of Friday stood at at 9.4 percent, following another leap in jobless claims for May -- is not, as economist John Williams has noted, "figured in the way that that the average person thinks of unemployment, meaning figured the way it was estimated back during the Great Depression."

What happens when we include people who have stopped looking for work because they do not believe there are jobs to be found, along with part-time workers who would like to be working full-time? Then, we start looking not at the unsettling 10 percent figure but the far more frightening 20 percent number.

As economist Howard Rosen told NPR after official unemployment topped 8 percent in February:

Today we learned that there are 12.5 million people who are unemployed, and we have another 8.6 million people who are working part-time because they cannot find full-time jobs. Now, you're talking about 20 million people in this country who are either unemployed or underemployed. I don't want to freak out people, but the unemployed number, we start talking about 15, 16 percent.

Since February, of course, the official unemployment rate has spiked dramatically, as has the real rate.

[Hat tip: Hot Air]

The best that Mr. Obama can offer is that the worsening is less than expected.

This is what fairy tale job creation by a community organizer looks like.

CHOPE.

Empty stimulus. Empty rhetoric. Empty glass.

------------------------------------
* There is no metric for "saved" jobs (and this).

** For background on Mr. Obama's "spend America to prosperity" see here and here and here.

*** A twenty-six year high.

Posted by Damian at June 9, 2009 08:00 PM