It is being reported that Obama is leaving behind a somewhat healthy job market and a recovering economy. The media is trying to suggest that the U-3 unemployment rate has fallen to 4.7 percent from a peak of 10 percent – and that it is way down even after accounting for people who have left the labor force. The media is also reporting that Obama has created 11.3 million jobs.
I feel that the messages being put out by the media are misleading; if not, entirely false. I feel it is imperative to share the cold hard truths about our current economic situation with you. Remember: it is better to informed than surprised.
Here are a few more things to consider. U-3 unemployment is on the rise. It was 4.5% and it’s now 4.7%. True, U.S. private employers added 153,000 jobs in December, but that’s fewer than in November. Even private payroll gains in the month earlier were revised down. According to Mark Zandi, Moody’s Analytics’ chief economist, job growth is slowing. He also said “The gap between employment growth in the service economy and losses on the goods side persists. Smaller companies are struggling to maintain payrolls while large companies are expanding at a healthy pace.” Private industries produced a monthly average of 174,000 jobs in 2016, but that’s slower than the 209,000 monthly pace in 2015, according to ADP. And maybe Obama has helped create 11.3 million jobs. Does it matter that about 94% of those jobs were not meaningful employment? Does anyone want to talk about how GM has laid off thousands of workers recently? Or etc., etc., etc.?
Does this really sound like a healthy economic situation? I would like to point out that Obama is still in office and it’s pretty obvious that he’s leaving us with an economy in decline. Unfortunately, Trump will be blamed for what is about to occur, which for those who are unaware – will be “2008 – 2.0 X 2“.
Some would like to argue the stock market gains. Okay, let’s examine the words of Cyril Morong, an associate professor of economics at San Antonio College. He says that “yes, the Dow is close to all-time highs now, but its recent growth rates are not great compared to inflation. If it had grown just 5 percent per year since 1999 (still sluggish), it would be about 26,350 instead of just 19,942.16.”
As I said on a recent podcast, there are some serious systemic problems that a lot of people are willfully ignoring for some reason. Our current economic situation is not as pretty as the media is making it look. Don’t pay attention to the U-3 Unemployment number. It’s not a real indication of what is really going on. Investopedia says that “The U-3 unemployment rate is a comparatively narrow technical measure that leaves out a whole swath of out-of-work people who are willing and able to take a job but who don’t fit the narrow BLS definition of “unemployed.” For example, a stonemason who wants to work but who has become discouraged by a lack of opportunity in the midst of a deep economic recession would not be included in U-3 unemployment. A marketing executive who is laid off at age 57 and stops scheduling new job interviews due to her experience of age discrimination would not be included in U-3 unemployment. A person who only works one six-hour shift per week because no full-time jobs are available in his area would not be included in U-3 unemployment.”
Don’t be fooled by the propaganda.
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