Analysis: December Jobs Report the Worse Since 2011

January 12, 2014
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Analysis: December Jobs Report the Worse Since 2011

original article written by Net Advisor

WASHINGTON DC. The Bureau of Labor Statistics (BLS.gov) released the December 2013 jobs report Friday, January 10th. We look at not only at the low job numbers, but review the trend of what the economic labor picture really looks like.

[1] Lowest Job Numbers Since 2011
The government reported that 74,000 new non-farm jobs were created last month. Economists were expecting 193,000 new jobs. This is the lowest number of new jobs created since 2011.

“Hiring slumped sharply in December, as the economy added only 74,000 jobs, according to the government. This was the weakest month for job growth since January 2011 and came as a huge surprise to economists, who were expecting an addition of 193,000 jobs.”

— Source: CNN, Jan. 10, 2014 (HTML PDF)

Temporary jobs fell by 365,000 in December (p1). These 365,000 people were not counted as “unemployed,” nor are they factored in the overall 74,000 gain in jobs picture, which would then show a LOSS of 291,000 jobs in December using this calculation [Math: 74,000 job gains – 365,000 job losses = net -291,000 job losses for December].

The Obama Administration reported on January 2, 2014 that first-time weekly unemployment claims rose 339,000 (“seasonally adjusted”) in the week ending December 28, 2013.

“In the week ending December 28, the advance figure for seasonally adjusted initial claims was 339,000…”

— Source: U.S. Department of Labor (DOL.gov), Jan. 2, 2014 (PDF)

This means that 339,000 people recently lost their job, and what is a bit concerning – this is just one week’s data. The DOL reported that as of December 14, 2013 there were 4,458,816 people receiving unemployment claims (ie: lost their job, and receiving government unemployment “benefits”). Despite the fact that more people are losing jobs than gaining jobs, the BLS reported that the unemployment rate went down in December.

[2] Unemployment Rate Magically Falls on Higher Unemployment
The BLS claims that the unemployment rate fell last month from 7.0 percent to currently 6.7 percent.

The BLS stated that “unemployed persons declined by 490,000… in December (2013).” Someone might ask if 490,000 people are ‘no longer unemployed,’ how did we calculate a gain of 74,000 jobs?

The answer is simple. The Obama government is manipulating the jobs numbers. For years I have been discussing the true economic picture (here and here), which has been bleak. There are many people who think the U.S. economy is improving just because the stock market is up.

The stock market seemed dumfounded by the jobs report and not sure how to make of it. The Dow Jones Industrial Average closed down -7.71 to 16,437.05 on the release of the jobs report.

[3] The Artificial Economy
In 2009, I discussed the beginnings of U.S. Economic Crack (stimulus) and how this has massively expanded by the FED. We are seeing an artificial economy propped up by government deficits, welfare spending and the FED financing the mortgage and government debt (treasury) market.

It’s this massive multi-trillion dollar stimulus and sustaining people on welfare that has held up the economy, not natural economic growth. The end result to all this stimulus and welfare has not produced jobs in mass; it is just propping up the stock market. Remove all this stimulus and the U.S. would quickly look like a third-world country economically.

States with the longest unemployed workers are in Rode Island, Senate Majority Leader Harry Reid's Nevada, and President Obama's home state of Illinois.
States with the longest unemployed workers are in Rode Island, Senate Majority Leader Harry Reid’s Nevada, and President Obama’s home state of Illinois.

[4] How Unemployment is Calculated
The DOL uses 6 methods to calculate unemployment. The official jobs number is called the “U3 Calculation.” When you factor all those truly unemployed which is still in my view a skewed number, the unemployment rate by government calculation would be 8.1% using the U-5 calculation.

If we start adding in those who are working part-time but want full-time work, and who can’t get full-time work, we look at the government’s U-6 Calculation which would put the unemployment/ underemployment rate at 13.1%.

Last month the Gallup organization said the unemployed plus underemployed persons in the USA was 17.4% – a 32.82% discrepancy from the government’s calculation [Report, Point 13].

FACT: The BLS does not accurately count the true unemployed if they are receiving government unemployment insurance. The BLS colors up this fact this way:

“…insured unemployment cannot be used as a count of total unemployment in the United States. “

— Source: Bureau of Labor Statistics (PDF p10-11)

It’s not that it “can’t” be counted; it’s that it just isn’t counted.

The BLS also showed that the number of people participation in the labor force was 62.8% which declined from a year earlier. This means fewer people are working in the labor force in 2013 than were working in 2012. Yet, by miraculous scientific math, the official unemployment rate managed to fall from 7.6% to 6.7% from December 2012 to December 2013.

[5] 74% of New Jobs Are Low Wage Jobs
The December Jobs report shows that 55,000 of the 74,000 (or 74%) of new jobs were created at the retail level (p2). This report suggests that the majority of future jobs will continue to be low or lower wage jobs.

[6] Health Care Lost 6,000 Jobs in December
Despite all the talk about healthcare growth last year, 6,000 people lost their healthcare jobs in December (p2). The BLS said that an average of 17,000 new jobs per month were created in the healthcare sector in 2013, compared to 27,000 per month in 2012; or a 37 percent decrease in job growth in this sector.

DEC 2013 Average Weather Temperature (Source: Weather.com)
DEC 2013 Average Weather Temperature (Source: Weather.com)

[7] Bad Jobs Report: Blame the Weather?
At least one report blamed “the weather” for the bleak December jobs report.

“U.S. employers hired the fewest workers in nearly three years in December, but the setback was likely to be temporary amid signs that unusually cold weather may have had an impact.”

— Source: Reuters, Jan. 10, 2014

First, the Reuters journalist inserted a caveat – “may have had an impact” in the above quoted sentence. Not that the weather did have an impact on jobs, nor was there any evidence to support that notion.

Temperatures didn’t really drop until just this past week (which happened to be January 2014). The weather is the same rhetoric that was used in March 2010’s ugly jobs report.

Most people who own a computer with Internet, and who are looking for work, would have learned that most jobs are only available by applying on-line. Despite the normal December temperatures, computers (excluding perhaps the ObamaCare website) worked just fine.

December is typically a cold month for most of the country, its called winter. The recent January’s weather had nothing to do with December’s lack of job growth.

Fewer people are in the U.S. labor force, the lowest it's been since early 1978. More people are not in the labor force now that even the height of the 2006-2008 recession. Clearly there is some disconnect with the Obama "economic recovery" and fewer people working. Video Graphic Credit: Fox News.
Fewer people are in the U.S. labor force, the lowest it’s been since early 1978. More people are not in the labor force now that even the height of the 2006-2008 recession. Clearly there is some disconnect with the Obama “economic recovery” and fewer people working. Video Graphic Credit: Fox News.

[8] Giving Up Because Can’t Find Work? You’re Not Counted as Unemployed
CNN reported that 347,000 people dropped out of the labor force in December 2013 – thus they are no longer counted as being unemployed (p2). More people are dropping out of the workforce than ever before.

“…the (labor) participation rate, which is the percentage of the population in the labor force, (is) down to 62.8%. That’s the lowest it’s been since early 1978.

In some ways the participation rate may be even weaker than it was in 1978, since more women work outside the home today. The December participation rate for men alone matched a record low dating back to 1948.”

— Source: CNN, Jan. 10, 2014 (HTML PDF)

[9] Obama’s Jobs Plan: More Welfare?
President Obama’s solution to the lack of jobs seems to just promote more government welfare. President Obama is trying to blame Republicans for the budget Obama and a bipartisan Congress agreed to; this is Obama’s modus operandi (Reports: Four Years of Blame, FAA, USPS Debt, 2011 Budget Cuts, Sequester, Syria, Gov Shut Down, 2014-15 Budget, etc.)

Last month, 1.3 million people were dropped from receiving unemployment benefits as they expired. Another 1.9 million will expire over the next six months. Despite President Obama trying to blame others for something he agreed to, the President and a handful of Democrats and Republicans are trying to extend unemployment benefits (UI).

Democrats and Republicans jointly concluded in December 2013 that the U.S. can’t afford to pay people beyond the structured welfare system another $25 Billion a year to not work, especially when 100’s of thousands of new unemployed persons are entering the system in mass.

The Obama Administration previously extended unemployment checks for up to 99 weeks or 1.9 years. A real growing economy solves this problem, and as we have now read the economy isn’t exactly growing like we are led to believe when more people are losing jobs than gaining jobs.

The U.S. can’t spend its way to prosperity. History has shown that this socialistic ideology hasn’t worked in the last 50 years (Report).


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