U.S. Unemployment still stuck on high
After a relatively large expansion in private-sector employment in April of 224,000, the Obama administration led people to believe that the growth rate would continue in May. The White House leaked to several media sources that the number of new jobs would exceed a half-million positions, mainly through temporary Census Bureau expansion, and that the private sector would gain around 150,000 — somewhat less than April but still ahead of population growth. Instead, the actual BLS numbers missed both marks:
Total nonfarm payroll employment grew by 431,000 in May, reflecting the hiring of 411,000 temporary employees to work on Census 2010, the U.S. Bureau of Labor Statistics reported today. Private-sector employment changed little (+41,000). Manufacturing, temporary help services, and mining added jobs, while construction employment declined. The unemployment rate edged down to 9.7 percent.
In order to keep up with population growth, private-sector employment has to expand by at least 100,000 jobs a month. So far, the Obama administration has only seen that once, in April. Falling back to 41,000 is a drop of 75% of the growth from the previous month and puts the US back in a net job loss situation.
The problem of marginally-attached workers grew, and is reflected in the A-16 table. Comparing May 2009 to May 2010, the number of discouraged workers rose from 792,000 to 1,083,000, while the number of discouraged workers remained steady at 2.2 million. The number of people not in the labor force but who want work — including the “discouraged” workers — rose from 5.865 million to 6.381 million in the past month (not seasonally adjusted — BLS does not provide historical data with seasonal adjustments).
The Washington Post certainly expected better:
The headlines right now are ominous — from the European debt crisis to a gargantuan gulf oil spill to renewed political tensions in several corners of the world. Financial markets have faltered as a result.
But the U.S. economic recovery is still plugging along.
That is the message from the latest wave of economic data, including several reports Thursday. And Friday morning, the Labor Department plans to release what is expected to be the best report on job growth in years, though the numbers will be boosted by temporary hiring by the Census Bureau.
It points back to a spectacularly bad attempt at expectations management by the White House. Either they didn’t know what was coming, or thought that they could spin it into sunshine. The stumble on private-sector growth negates the “we’re gaining strength” claim coming from the Obama administration, and it fits into a narrative of stagnation and incompetence. No one will look at a +41K month as a big step in the right direction, not after the administration’s bragging about the four-times-stronger number in April.
Update: Rob Port notes that 95.5% of all job growth in May came from the government.
Update II: CNBC reports that Wall Street isn’t impressed, either:
US employers added 431,000 jobs to nonfarm payrolls in May, but 411,000 of those were temporary census workers. The private sector added just 41,000 jobs: Manufacturing, temporary help and mining added jobs, while construction declined. That number was also well short of the more than 500,000 economists had expected. The unemployment rate, however, fell to 9.7 percent from 9.9 percent in April.
“This number is extremely disappointing,” said Todd Schoenberger, managing director at LandColt trading. However, he said, it should come as no surprise. “Considering first time jobless claims have been inching higher over the past four weeks … and GDP came in at a lackluster 3%, American companies are going to be reluctant to hire.”
“The two areas of potential vulnerability for the economy remain payrolls and housing and they’re both staggering a good deal,” Art Cashin, director of floor operations at UBS, said on CNBC this morning. “From a market standpoint, I think we’re going to switch over and start issuing Dow 10,000 helmets!”
The Dow was down 160 points shortly after opening and treading back towards the 10,000 mark.
Update III: Why did the unemployment rate go down? People have begun exiting the labor force again (via Jonah Goldberg):
The unemployment rate fell to a seasonally adjusted 9.7% in May from 9.9% in April, according to a separate survey of 60,000 households. Economists were expecting the jobless rate to sink to 9.8%.
The decline wasn’t particularly good news, however, because the drop was due to 322,000 people dropping out of the labor force. While unemployment dropped by 287,000 to 15 million, employment also fell, dipping 35,000 to 139.4 million.
The participation rate dropped by two tenths to 65%.
Those are not indicators of a growing economy.
Why the White House Bribed Romanoff
We now know that Obama’s Deputy Chief of Staff, called Colorado House Speaker Andrew Romanoff in September, 2009, to offer him one of three enumerated jobs if only he would drop out of the Democratic Senate primary in which he was challenging appointed Senator Michael Bennet. But the question is why?
In the case of the Spector/Sestak bribe, the answer is obvious: The Obama Administration wanted the Pennsylvania Senator to switch parties so that they would have a filibuster proof majority in the Senate. To persuade him to switch, the White House had to do its utmost to clear the field and assure him a safe path to the Senate nomination in his new political party. So, Rahm Emanual asked former President Bill Clinton to dangle positions in front of Sestak to get him to drop out of the race.
But Michael Bennet was no great friend of the White House. Having never been elected to a statewide position, he lacked a political base and was never a particularly strong candidate. He only got the Senate seat as an appointment to fill the seat vacated by Senator Ken Salazar who gave up the seat to become Secretary of the Interior in the Obama Administration. So why was the Obama Administration trying to clear the field for Bennet and assure him of the nomination?
The answer likely lies in the politics of health care. Bennet had been a question mark from the beginning of the health care debate. The Huffington Post reported, on November 22, 2009, that he was willing to lose his Senate seat if he had to in order to back health care reform. The Post reported that his dramatic announcement ended months of silence on the subject and relieved White House concerns that he was not going to back the bill.
Funny how Bennet’s announcement came less than two months after Romanoff was offered a job to drop out of the race!
If a connection can be documented between the offer and the vote (no other motivation seems credible) the transaction becomes particularly sickening. Trading a job for a vote is the crassest and most obvious form of bribery. But what else can account for Bennet’s sudden morph from being on the fence over health care to an ardent supporter who would lose all rather than see it die?
Realizing the True Cost of Obamacare
The New York Times finally decides to spill the beans
Much of the focus on Obamacare has rightly been on its fiscal recklessness. But in a New York Times story —the type of story the Times couldn’t seem to find space for prior to Obamacare’s passage — we see a clear glimpse of the kind of care that Obamacare would likely spawn.
With the nomination brewing of Dr. Donald Berwick — a gushing admirer of the British National Health Service — to head Medicare and Medicaid and with Americans already clamoring for repeal in ever-greater numbers, the story, although tardy, is an important one. It highlights the very real dangers of having millions of the decisions made by doctors and patients across America replaced by the decisions of government administrators in Washington — who rely on studies they don’t understand and pick studies to rely on that aren’t worth understanding.
In this case, the relied-upon study was completed by Dartmouth researchers, who were thrust into the national limelight by an administration searching to find an angle, any angle, to try to sell its unpopular overhaul. As the Times writes, “The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.”
The Times piece largely stands on its own, and it provides a disturbing account of how much damage powerful government officials could do to people’s lives if they are allowed to impose their decisions nationally, especially when those decisions aren’t rooted — as they almost always wouldn't be adequately rooted — in legitimate empirical evidence in, as President Obama likes to say, “what works.” Centralizing this much power in the hands of the few would prove fatal not only to liberty but to the quality of American medicine.
The Times writes:
In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.
Wasteful spending — perhaps $700 billion a year — "does nothing to improve patient health but subjects you and me to tests and procedures that aren’t necessary and are potentially harmful," the president’s budget director, Peter Orszag, wrote in a blog post characteristic of the administration’s argument.
Mr. Orszag even displayed maps produced by Dartmouth researchers that appeared to show where the waste in the system could be found. Beige meant hospitals and regions that offered good, efficient care; chocolate meant bad and inefficient….
However, the Times writes, “Measures of the quality of care are not part of the formula.”
The Times adds, “For all anyone knows, patients could be dying in far greater numbers in hospitals in the beige regions than hospitals in the brown ones, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better.”
For example, there are “big city hospitals like those at the Ronald Reagan UCLA Medical Center and NYU Langone Medical Center — which look profligate by Dartmouth’s measure but may rank much higher by other quality indicators.”
Same Pundits, Same Hypocrisy
I could go on about one-sided political analyses. But the worst of them recently might have been media's hesitancy to criticize President Obama's halting response to the Gulf oil spill. Obama himself had to declare his "ownership" of the situation before many journalists and pundits would do the same. The Sunday shows generally ran with this theme. Obama's to be judged (only) from this point forward, they said, but it's still BP's fault and responsibility.
Maybe. But I don't recall many of these same talking heads giving George W. Bush as much as a 48-hour grace period after Hurricane Katrina before calling for his head on a platter.
Save the Washington spin award, however, for the verbal contortions about Pennsylvania Rep. Joe Sestak. The issue is whether the Obama White House offered him a job in exchange for Sestak dropping his Democratic primary challenge to incumbent Sen. Arlen Specter and whether such an offer might have broken any laws.
The spin came right out of grammar school. Everybody else was doing it, too! It's just politics, you know.
That actually might be my view, too. But rest assured that had such an offer come from a surrogate of the Bush administration -- as Bill Clinton was the surrogate for the Obama White House in the case of Sestak -- the media indignation would have blown the doors off.
Sestak himself said emphatically at one point on television that he was indeed offered a job if he would leave Specter alone. He didn't say what job, but he hinted that it was a plum one.
Most insiders believe Clinton may or may not have offered Sestak some sort of modest appointment to a non-paying federal advisory board, as the White House claims. Regardless, they think that in his original televised comments, Sestak was referring to a prospective appointment to a full-time -- and prestigious -- job. That would be a clear violation of law.
Polls are panned by many, but the aggregate of multiple polling results by multiple pollsters rarely lies. President Obama's approval rating is about 47 percent. That's not good, but it's probably better than it would be if media were as tough and skeptical with this administration as they were with previous Republican ones -- or even with Bill Clinton's.
Here's the deal: The big broadcast news organizations want Washington insiders, and they want them to keep the deck stacked in favor of Democrats. Often they don't even realize their own biases.
The cable networks all play to certain audiences. Often they go overboard to flatter the ideologies of their loyal viewer bases. They simply won't accommodate pragmatic voices that decline to speak on behalf of agendas.
The vast majority of Americans don't read newspapers. They don't watch TV news and commentary shows. They just don't care. So does it really matter what the Washington pundits say? Yes and no. Even though most people don't tune in to their every word, the pundits still have the power to turn an offer to a candidate of a non-paying job into an "ElectionGate" scandal. But only if they want to. After all, they're the real gatekeepers.
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