Saturday, September 8, 2012

August jobs report = "morning in America"?

The big story yesterday was the monthly jobs report, which showed 96,000 jobs added in August, and the unemployment rate dropping to 8.1%. Tepid numbers on the surface, and they look slightly worse when you realize that June and July were both revised down, with a reduction of 41,000 jobs between them, making the gain only 55,000 vs. what was previously reported.

But I also think our media overreacted to these numbers. I checked the newsstand today, and the Wisconsin State Journal is calling the jobs numbers "A blow to Obama." REALLY? I know it's not rainbows and ice cream, but I have a hard time buying that a report that shows private sector job growth for the 30th straight month is a major setback. And as this chart shows, the slow-but-steady recovery to the Bush Recession continues, with more than half of the jobs lost between August 2008 and July 2009 gained back in the last 3 years.

But given that the media really needs this Romney-Obama race to seem close so people will keep watching and buying ads, they're going to try anything in their power to keep Obama from pulling away after a great DNC. So they'll put out the alarm bells from a jobs report that doesn't really change the way things have been for the last few months.

My bigger concern from that report comes from the manufacturing figures, which shows a seasonally-adjusted drop of 15,000 jobs in that sector. That seems to go against the Dem convention theme of "Obama's auto bailout led to a manufacturing recovery." But the jobs report points out that many of the manufacturing "losses" weren't losses at all.
A decline in motor vehicles and parts (-8,000) partially offset a gain in July. Auto manufacturers laid off fewer workers for factory retooling than usual in July, and fewer workers than usual were recalled in August.
This is the flip side of the cosmetically low unemployment claim numbers in July, which happened because of carmakers continuing to crank out vehicles instead of having summer shutdowns. So it's better to look at the 2-month manufacturing trend with this in mind, and it shows an increase of 8,000 jobs since June, with 6,500 of those gains in "Motor vehicles and parts." So auto manufacturing is staying strong, and with this week's news of auto sales being up 20% vs. August 2011, the automobile sector looks to be in good shape and should add jobs for the near future.

If people concentrate on the unemployment rate, the rate of 8.11% is the second-lowest since Obama took office in January 2009. Now many will point out that much of August's drop is due to more people dropping out of the work force, and for that one month, that's true - there were 368,000 fewer in the work force on a seasonally-adjusted basis than July.

But if you look at the unadjusted numbers year-over-year, you see over 900,000 MORE people in the work force vs. this time last year, and 2.2 million more ID'ing themselves as employed, which explains how the unemployment rate is down by nearly 1% in the last 12 months. This chart will show how unemployment was rising in the 12 months before Obama took over, and crosses over when Obama became president in January 2009. Much like with the overall jobs numbers, the trend in unemployment rates is a good one, once the stimulus and other policies stabilized things in the middle of 2009.

What's doubly interesting is that the modern-day GOP gives nearly a god-like status to Ronald Reagan, while demonizing Obama as anti-American and everything Reagan allegedly wasn't. Well, when it comes to the economic circumstances both presidents arrived in office to, and in how their first terms have gone, they're pretty damn similar. In fact, it can be argued that Reagan didn't have it nearly as tough as Obama when he came to D.C. in 1980, and unlike Obama, Reagan's policies made things worse in the first 2 years. And 3 months before the presidential elections, unemployment had gone both for both Obama and Reagan, but the rate wasn't much different than the ones they inherited.

For Reagan's 1984 presidential re-election, the theme was one of optimism, that America had dug its way out of the stagflation economy of the previous decade. Watch this classic ad from that campaign, and answer a simple question- replace Reagan's name with Obama, and tell me what's different today?

So why is our media grumping about this latest jobs report? Has this country forgotten the depths of the mess we were in 4 years ago? Or is our media that far in the bag for a corporate America that loved Reagan's giveaways, and aren't as kind to Barack Obama? I think we know the real answer.

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