Is the Drop in Unemployment Rate Really a “False Positive” for Obama?

By: Jeffrey Klein, Political Buzz Examiner

This morning the U.S. Department of Labor’s Bureau of Labor Statistics released a shocking report–the official unemployment rate for the United States had spiked down to 8.6 percent.

The rate had remained “frozen” at 9 percent or above since May 2009–just four months after President Obama’s inauguration.

It would seem that President Obama and David Axelrod’s prayers have been answered.

Not quite so fast….

Upon a close examination of the data in the actual BLS report, it would appear that this “miracle” is largely a “false positive,” as most of the reduction in the rate was as a result of people who simply quit looking for a job–and therefore not counted as being in the labor force.

And, it seems that the other primary component of the decline occurred from the hiring of temporary holiday workers, who are mostly part time, low wage and whose employment is just for November and December.

The Bureau of Labor Statistics (BLS) report, Table A-1, shows that the number of “Unemployed” workers fell by 489,000, from 13.102 million in October, to 12.613 million in November, as listed in the “Not Seasonally Adjusted” column.

And, right below that, it indicates that there was a reduction in the “Civilian Labor Force” (number of people actively looking for work) of 405,000, from 154.088 million in October, to 153.683 million in November, also taken from the “Not Seasonally Adjusted” column.

Then, according to the text section of the BLS report, it is revealed that of the remaining 84,000 workers to account for, they were mostly “seasonal”, with the retail sector leading the way with the hiring of 50,000. This included 27,000 by clothing and accessories stores, another 5,000 added to the sales ranks of electronics and appliance stores. Also in the context of seasonal hiring, the hospitality sector netted an additional 21,000 workers–mostly in food services and at “drinking places.”

The only solid job creation took place in the healthcare sector, where 17,000 people were added to the employment rolls. Then the professional and business services area picked up 33,000, followed by a net gain of 6,000 in the manufacturing sector rank and file.

Offsetting these gains however, were the cutting of government workforces at federal, state and local levels, who shed 20,000 jobs, along with an additional 5,000 lost within the Post Office.

(Authors note: These numbers are excerpts from the BLS report, and will not sum to “0.”)

The point is clear–there is nothing contained within this report–other than the sensation created by the initial optical illusion of the unemployment rate number falling to 8.6 percent.

Consequently, this report really provides no hope or change in the continued employment outlook for President Obama and most of the Democrats in Congress.

Copyright (c) 2011 by Jeffrey Klein

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