Pethokoukis, Economics, U.S. Economy

5 horrible job stats Obama failed to mention during his Knox College speech

Credit: Century Foundation

Credit: Century Foundation

Listening to President Obama’s speech at Knox College in Galesburg, Ill., one might get the impression the US labor market has rebounded with a vengeance: “Today, five years after the start of that Great Recession, America has fought its way back. … Add it all up, and over the past 40 months, our businesses have created 7.2 million new jobs. This year, we are off to our strongest private-sector job growth since 1999.” And Obama only mentioned “unemployment” a single time.

Sounds like things must be pretty good for US workers, right? But a new report from the Century Foundation highlights a few job stats that didn’t make it into Obama’s final draft:

1. Over 69 percent of the jobs created in Q2 2013 and over 57 percent of all the jobs created in the first half of 2013 were created in the three lowest wage sub-sectors of the economy, Retail Trade, Administrative and Waste Services, and Leisure and Hospitality, that otherwise account for an aggregate of only 33 percent of all private sector jobs.

2. These jobs, in the aggregate, pay an average of only $15.80 per hour, compared with the other two-thirds of private sector jobs, which pay $27.16 per hour. Relative to unemployment benefits and other assistance, jobs at $15.80 per hour put less than $3.00/hour more in the pockets of a newly working consumer.

3. About half of the jobs created during the first half of 2013, and a large majority of the jobs created in Q2 2013, appear to have been part-time jobs that offer employees as little as one hour of work per week, and up to 35 hours of work.

4. After falling from a recession high of 9.2 million to a post-recession low of 7.6 million at the end of Q1 2013, the number of people saying they are working part time because they can’t find full time work (part time for economic reasons) crept back up to 8.2 million, double pre-recession levels.

5. Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population. If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today. 

4 thoughts on “5 horrible job stats Obama failed to mention during his Knox College speech

  1. The correct unemployment measure to use now is U-6, which currently stands at 14.3% (14.6% unadjusted).

    This counts un- and underemployed.

    Obamascare is the driving force behind this horrible number. I will not assign blame to Barry for the policies of his predecessor, but he certainly gets full “credit” for this horrendous recovery, which his signature legislation destroying jobs and continuing our weak recovery (recovery summer #4! This time we MEAN it!!!!!!).

    I’m astonished that the economy has done this well this long.

    • I don’t believe that the economy really has performed that well, we have just been able to inflate it artificially thru printing of money and other policies, which could be creating a whole new bubble in my opinion.

  2. Obama has not helped.

    But the real villain is the reckless and cavalier disregard the Fed has had for American workers and businesses. The Fed pays slavish homage to and pompously pettifogs about “fighting inflation,” while we have microscopic rates of inflation and extended weak economic growth.

    The Fed is cloistered, insular, opaque, not accountable and zealously genuflecting to its own exalted mission statements. we get sanctimonious sermonettes instead of aggressive stimulus.

    Sadly the right wing is wrong on the Fed–the Fed is not expansive, the Fed has had a monetary noose around the neck of the American economy since 2008.

    The Fed caused the recession by tightening in 2008 to “battle inflation” and then never acted aggressively enough to bring the economy full upright. In the meantime, we drifted dangerously close to deflation and ZLB.

    Recoveries do not last forever. We now face the prospect of hitting the next recession with inflation already under 1 percent and interest rates flat as a board.

    That is called Japanland.

    • So you think the problem is interest rates, i.e. the price of money, which the Fed has severely distorted.

      Why do you incorrectly assert that the “right wing” started ZIRP?

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