Thursday, December 13, 2012

Economic Stagnation Is the New Normal

Stagnating economy, the New Normal--we're in for a "long ride"--

RealClearMarkets - Under Obama, Economic Stagnation Is the New Normal: " . . . Friday's "Employment Situation" report from the Bureau of Labor Statistics (BLS) showed that 5.4 million Americans have dropped out of the labor force since Barack Obama took office. The labor force declined by 350,000 in November, despite an increase of 191,000 in our working age population. The unprecedented decline of labor force participation under President Obama is not news. However, it also appears that millions of brain cells have dropped out of the mental labor force of America's economic analysts. How else can we account for headlines like these? "Jobs report: A pleasant surprise" (Jared Bernstein) "The employment emergency is over" (Felix Salmon) "Fiscal cliff? What fiscal cliff? No evidence in jobs numbers" (Stephen Gandel) In case anyone didn't notice, the BLS jobs report was terrible. Unemployment didn't go down in November (from 7.9% to 7.7%) as the BLS reported, it actually went up. The true unemployment rate, calculated at the labor force participation rate that existed when Bush 43 left office (65.8%), increased from 10.7% to 10.8%. This put the true unemployment rate 1.3 percentage points higher than when Obama's so-called "economic recovery" began, almost 3.5 years ago. As of November 2012, total employment was still 3.2 million below its peak, which occurred five years earlier. This is particularly ghastly, because America's working age population has increased by 11.2 million since then. . . . We had fewer full-time jobs last month than we did in January 2005, which was almost eight years ago. Assuming that November's CPI comes in as expected (2.0% annual inflation rate), the real wages of ordinary ("production and non-supervisory") workers were 1.9% lower in November 2012 than they were in November 2010. They were also 9.0% lower than they were in November 1964, for that matter. Question: How can anyone look at something as dismal as Friday's BLS report and see anything but economic stagnation? . . . "

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