The September jobs report brought about utter consternation. Not by novices. But by credible business experts. Some conspiracy theories were floated and these were quickly silenced. It is completely possible that there will be some explanation over time about this conveniently timed “shock” number. Maybe the seasonal smoothing that is expected in coming months will put things in order.
Here are my observations as I am actively in the job market. Post the DNC convention there was certainly a burst in jobs posted in mid September. The Clinton enthusiasm seemed to create a pop. It showed up in Obama’s September fund raising numbers too. But I saw that spurt in jobs posted dissipate and return to “normal” by the end of September. I do believe that hiring is taking place but typically from the already employed pool. There maybe some part-time/contract hiring jumps too (and I saw evidence of this in government related agency/non-profit jobs posted). My guess is that the BLS data is not cooked but something got kicked into gear by the administration and the convention. The administration has been driving EDD work search requirement interviews and these started in August which I think helped explain some of the drop from 8.3% to 8.1% with a large number of people leaving the work force (or atleast out of the unemployment benefits pool) [Update: To satisfy my curiosity I wrote to the BLS and got this response - “There are a number of questions in the survey designed to establish labor force status, and the eligibility for, or the collection of unemployment benefits is not considered.” - so I am back to being stumped]. The September household survey numbers have blown people’s minds with the 873K added jobs being the best in 30 years.
So I decided to look at the data. Check the chart below for the Reagan years. We heard people like Jack Welch state that it just did not feel like the economy was popping as the job numbers suggest. No kidding. They knew what a burst of hiring of such proportions felt like because they experienced an economy with a GDP growth rate greater than 8%.
Now lets look at the Obama chart. No pop in GDP. A slow gradual decline in unemployment and corresponding to falling participation rates as people leave the workforce.
I heard Karl Rove throw out a sobering number. At the rate at which Obama’s recovery is adding jobs, it will take us till 2025 to reach the pre-recession job levels. With a recovery this slow, you can bet that we would be adding close to $1 Trillion deficits per year.
Pure unadulterated disaster.Tweet