Unemployment fell from 8.1% to 7.8%, aided by an increase in part-time employment: “Some 582,000 Americans took part-time positions because of slack business conditions or those jobs were the only work they could find,” notes Bloomberg News. Still, 114,000 new jobs were created in September, reported The Washington Post. This figure is only a “modest number” of jobs compared to the overall size of the economy, notes the New York Times. The U.S. economy has also been temporarily propped up by the flight of foreign money into U.S. treasuries (due to the European financial crisis), and cheap natural gas prices (natural gas production has expanded despite impediments from the Obama administration). But in the longer term, there are some very bad omens, like the big drop in durable goods orders, which sank 13.2 percent in August, perhaps foreshadowing another recession. Factory orders also recently fell, and manufacturing employment fell in September.
James Pethokoukis of AEI argues that the new job figures are lackluster:
Only in an era of depressingly diminished expectations could the September jobs report be called a good one. It really isn’t. Not at all.
1. Yes, the U-3 unemployment rate fell to 7.8%, the first time it has been below 8% since January 2009. But that’s only due to a flood of 582,000 part-time jobs. As the Labor Department noted:
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
2. And take-home pay? Over the past 12 months, average hourly earnings have risen by just 1.8 percent. When you take inflation into account, wages are flat to down.
3. The broader U-6 rate — which takes into account part-time workers who want full-time work and lots of discouraged workers who’ve given up looking — stayed unchanged at 14.7%. That’s a better gauge of the true unemployment rate and state of the American labor market.
4. The shrunken workforce remains shrunken. If the labor force participation rate was the same as when President Obama took office, the unemployment rate would be 10.7%. If the participation rate had just stayed steady since the start of the year, the unemployment rate would be 8.4% vs. 8.3%. Where’s the progress?
Just 114,000 new jobs is not nearly enough to return the economy to good health, says Pethokoukis. “The U.S. economy needs 2-3 times that number every month to close the jobs gap (which is the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month).”
The Obama administration has created a political climate that discourages businesses from expanding and creating jobs. Obamacare’s burdens on employers may eventually eliminate as many as 800,000 jobs. Obamacare has caused layoffs in the medical device industry, and wiped out jobs in other industries. The Dodd-Frank Act has also wiped out thousands of jobs and driven thousands more jobs overseas. The Obama administration has discouraged hiring by interfering with employers’ merit-based hiring, and by imposing a wide array of costly, harmful new labor and employment rules on American manufacturers.
Even some liberal businessmen have grown disenchanted as administration policies and red tape hamper the economy. For example, Steve Wynn called Obama “the greatest wet blanket to business and progress and job creation in my lifetime.”