Bureau of Labor Statistics: Obama economy stuck in neutral–pain to continue

By: Jeffrey Klein
Political Buzz Examiner

Have you ever experienced a time in your life when things just couldn’t seem to get any better for you–no matter how hard you tried? Well, President Barack Obama took it on the chin again today, when the U.S. Bureau of Labor Statistics (BLS) released its month end report.

Under Barack Obama the unemployment rate has remained above 8 percent for 39 months in a row–the longest time period since the Great Depression.

Even the main stream media can’t gloss it over anymore, as in Susan Kim’s ABC News article today, wherein she rightfully ran it down by the numbers, beginning with job creation, which at just 115,000 was fewer than economists expected, but also, according to Bloomberg, was the smallest amount in six months.

Next, even though the unemployment rate dropped 10 basis points from 8.2 percent to 8.1 percent, it is only because so many tired and frustrated Americans left the labor force, thereby reducing the BLS labor participation rate to 63.6 percent, which according to an Associated Press article today is its lowest point in 30 years.

The accurate measure of the true unemployment rate would be 14.5 percent, which does include the 12.5 million workers who remain unemployed or underemployed in the U.S., regardless of whether they have “willingly” left the labor force, according to Chris Stirewalt’s Power Play article in FOXNews today.

Stirewalt reported that in April alone 522,000 people left the labor force; resulting in the slight unemployment rate decline–but, at some point they will return and have the reverse affect on it.

From a macro economic perspective there is a more worrisome trend emerging, because job creation and the unemployment rate are not a zero sum game; everyday, as children grow older, they enter the labor force looking for a job–joining those people already in it.

In perspective, just keep pace with population growth, the economy must create 125,000 jobs per month, while requiring at least 250,000 new jobs per month on a consistent basis to rapidly lower the unemployment rate, according to Associated Press reporting.

In fact, during 2011 about 2.7 million Americans left the work force while only 945,000 came in, strongly implying that the 100 basis point decrease in the unemployment rate from last Augusts’ rate of 9.1 is nothing but a myth.

“The unemployment rate is not materially changing, which is disappointing since privately held companies have continued to grow their sales and are generally the engine of job growth,” said Brian Hamilton, CEO of Sageworks and a leading expert on privately held companies.

“This probably reflects continued anxiety about the economy and where it will be 12 months from now. We are 34 months into an expansion and an 8.1 percent unemployment rate is too high at this point,” according to Kim’s ABC News article.

And finally, Wall Street, perhaps the most accurate barometer of all–because they risk dollars not political futures, tumbled in a broad-based retreat amid signs that U.S. economic expansion may be losing some of its luster, according to Adam Samson’s FOXBusiness article today.

“Ignoring the specifics of today’s report, the larger theme of slower job creation should now be embedded,” Dan Greenhaus, chief global strategist at BTIG wrote in an e-mail.

Weak job gains pose a threat to President Barack Obama’s reelection. He is likely to face voters this fall with the highest unemployment rate of any president since World War II.

So, as no U.S. president in modern history has been reelected with an unemployment rate over 7.6 percent–it looks like it may be “curtains” for Barack Obama in November 2012.

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