The national economy’s only good news came for all the wrong reasons.
The latest jobs report shows unemployment dropping from 8.3 to 8.1 percent. This drop in rate only comes, however, because more people dropped out of the workforce than jobs were created.
The New York Times reported that “the overall labor force dropped by 368,000 workers in August.” But even this number is too rosy: Dr. Peter Morici, a business professor at the University of Maryland, wrote that actually “581,000 workers quit looking for work.”
Business Insider noted that this drop in participation puts labor force participation at the “lowest level since September, 1981.
Last night, speaker after speaker, including President Obama himself, hailed the manufacturing industry in America as making a comeback. But the manufacturing sector, “a closely watched barometer for the broader economy, lost 15,000 jobs,” wrote the New York Times.
The economy only added a net total of 96,000 jobs in August, far short of the projected 125,000. The private sector produced 103,000 jobs, while the government shed 7,000, reported the New York Times.
This statistic, when compared with the number of potential workers abandoning the workforce, reveals a startling contrast: “For every net job created, nearly four people left the workforce,” Vice Presidential candidate Paul Ryan said.
In fact, had the labor force stayed the same size, “unemployment would have risen to 8.4 percent,” wrote the Washington Times.
And people who did find employment tended to take lower paying jobs, reported the New York Times.
Dr. Morici said that this is “the weakest recovery since the Great Depression,” but the circumstances Obama has faced are not unique. “Ronald Reagan inherited a similarly troubled economy, with unemployment peaking at 10.8 percent in November 1982,” he wrote. But “During his recovery, GDP growth was averaging a brisk 6.3 percent in contrast to President Obama’s 2.2 percent."
Morici notes that Obama has been squandering a great opportunity: “the U.S. economy is expanding at 2 percent a year instead of the 5 percent pace that is possible after emerging from a deep recession and with such high unemployment.”
The good news? Nobody is talking about a second Great Depression.