The White House and much of the chattering class cooed on Friday when unemployment dropped to 9.1 percent and 117,000 jobs were reportedly created in July. But these numbers, upon closer inspection, show no progress on the jobs front.
Buried in the job stats was a number — 193,000 — that dwarfed all the rest. That is the number of workers who left the job market. If 193,000 left and only 117,000 jobs were added, we lost 76,000 jobs. Moreover, this is not an aberration.
When President Obama took office in January of 2009, the labor participation rate was 65.7 percent. Now, “The labor force participation rate is currently 63.9 percent. That is the lowest level since 1984,” says Matt McDonald, a communications and business strategist who previously worked in the Bush administration. “If the labor force participation rate today were 65.7 percent, there would be an additional 4.2 million people in the workforce.” In that case, the unemployment rate would be 11.5 percent not 9.1 percent.
Unfortunately, this administration’s talk about pro-job policies is sounding a bit like O.J. looking for his ex-wife’s killer. The culprit is standing right there. Yet, the Obama administration insists on more of the same: tax hikes, spending and a nonstop flood of regulatory measures. Administration officials would rather whimper about the S&P analysis than to reevaluate and revise their economic approach. And with Tim Geithner staying on as treasury secretary, don’t expect any creative economic policies anytime soon.