Barack Obama held a press conference this morning to regale us with the latest jobs report. He told us that there were only 151,000 new people seeking unemployment support this week. He also touted the 4.9% unemployment number and well he should. This is the lowest the unemployment number has been since he got into office. Many economists consider 5% unemployed as full employment.
Obama took credit for saving us from the terrible recession caused by the Bush Administration. However, he did not acknowledge that the economy is getting worse. In fact, he calls our economy vibrant. G.W Bush averaged over 4% GDP for 8 years. Obama’s GDP in December 2015 was 0.7%. The highest GDP under Obama is 2.5%. For sure we are in a downturn right now, but the last seven years make me think it is too late to blame Bush for what is happening today.
Were you aware that the Bureau of Labor Statistics has six (6) unemployment tables. I knew, but I do not look at these tables very often. They are filled with numbers and me being a theoretical mathematician, I feel more comfortable with algebra than I do with tables of real numbers. A, B, C and X, Y and Z are more fun for me to work with. Sorry for the digression, but now more about the labor participation rate tables (U1 – U6).
· U-1 is the percentage of the labor force out of work 15 weeks or longer.
· U-2 is the percentage of people who lost jobs or completed temporary jobs.
· U-3 is the percentage of people on unemployment that actively looked for work in the last four weeks. This is the official unemployment number used by all administrations.
· U-4 is U-3 plus the people who have stopped looking for work.
· U-5 is U-4 plus the people marginally employed (Temporary jobs, etc.).
· U-6 is U-5 plus the people on involuntary part time jobs.
Using the U-3 numbers, white unemployment is 4.3%, black unemployment is 8%, Asians 3.7% and Hispanic unemployment is 5.9%. Unemployment for teenagers is 16%. For the life of me, I cannot understand why minorities keep voting mostly for Democrats.
The labor participation rate is the percentage of working age people that are actually working. It was 65.7% when Obama took office and it is 62.5% today, the lowest it has been in almost 40 years. This relates to around 90 million working age people not in the work force. Obama may want to lower the normal retirement age to get this number back up. This group of people is reflected in the U-6 table unemployment number which is 9.9%. By the end of the year he may get it down to the 9.2% he inherited. Smile broadly, if you think a Democrat president will actually solve the unemployment problem.