Obama’s Jobs Legacy: Near-Record 94.6-M Americans Not in Workforce

Obama’s Jobs Legacy: Near-Record 94.6-M Americans Not in Workforce

Obama’s Jobs Legacy: Near-Record 94.6-M Americans Not in Workforce

A near record high of 94,609,000 Americans are not in the labor force, 425,000 more than last month’s 94,184,000, and the 2nd highest number on record.

When US President Barack Hussein Obama took office in January 2009, 80,529,000 Americans were not in the labor force, and that number has steadily risen during his two terms to its current 94-M level. The number reached a record 94,708, 000 this past May.

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Behind the Happy Spin the US Labor Department and government talking heads and media pundits put on the official monthly jobs data is the sobering reality, that the unemployment rate is 10% and a huge number of Americans are out of work.

Friday’s report painted a picture of a resilient job market that likely keeps the Fed on track to raise interest rates when it meets in December.

Yet the economy is weak, so weak that many are feeling left behind by the Obama Administration on the eve of Election Day.

Millions of Americans are working part time at low paying jobs, but would prefer full-time work at high paying jobs.

In October, the unemployment rate dipped to 4.9% from 5%.

Economists look past the official unemployment rate, that 4.9% figure, also known as the “U-3” rate to other metrics that give their own nuanced view of jobs in the country.

The alternative gauge of joblessness, the U-6 rate, that counts not only the officially unemployed but also the part-timers who’d prefer full-time work and people who have stopped looking for jobs, fell to 9.5%. That’s the lowest point since Y 2008. It is higher than is typical in a healthy economy.

The official unemployment rate is defined as “total unemployed, as a percent of the civilian labor force, but does not include a number of employment situations in which workers may find themselves.

The U-6 rate is defined as all unemployed, + persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of a labor force.

Simply put: The Unemployed, the Underemployed and the Discouraged.

The U-3 rate has in the past few months returned to the pre-recession levels that economists consider full employment. While the U-6 has seen significant gains in the past few years, it remains stubbornly above pre-recession levels.

A near record high of 94,609,000 Americans are not in the labor force, 425,000 more than last month’s 94,184,000, and the 2nd highest number on record.

The labor force participation rate, which indicates the share of working-age people who are employed or looking for work, slipped to 62.8% from 62.9%, as the number of people in the labor force declined. In other words, 62.8% of the non-institutionalized, civilian population over the age of 16 is either employed or are actively looking for work, while the other 37.2% is not working or even looking.

When US President Barack Hussein Obama took office in January 2009, 80,529,000 Americans were not in the labor force, and that number has steadily risen during his two terms to its current 94-M level. The number reached a record 94,708, 000 this past May.

Some economists and policy makers claim that the US economy is close to full employment, not so, with the ranks of part-time workers and long-term jobless still higher than before the last recession, with another one looming.

The US government’s underemployment rate dropped to 9.5% in October from 9.7%, while the number of people working part-time for economic reasons was little changed, according to Friday’s report. Some 5.89-M American employees were in part-time jobs but wanted full-time work.

 

Americans in their prime working years, ages 25 through 54, extended a recent trend of returning to work, perhaps drawn by rising pay. More than 78% of people in that age bracket now have jobs, the highest proportion since November 2008, in the midst of the Great Recession. Still, that’s down from 80% before the downturn.

The US economy is growing at the slowest pace of any in a recovery since World War II.

Growth picked up to a 2.9% annual rate in Q-3, the government estimated

Most analysts foresee only modest expansion in Q-4, leaving growth at an anemic rate of about 1.8% for all of Y 2016.

Many companies are sacking workers.

Manufacturers cut jobs last month, as did retailers despite October being the month where stores usually ramp up for Holiday shopping. Both are factors that could weigh on economic growth this year.

Consumers, the US economy’s primary driver are showing some staying power, even though their spending slowed in the July-September frame.

Businesses have been cutting their spending on machinery, computers and other equipment. They have reduced such spending for the past 4 Quarters, the longest stretch since the Great Recession officially ended in mid-2009.

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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