US unemployment rate decreases from 6.3% to 6.1% in July 2014

[eric82oslo]

While the unemployment rate remains near a record high 11.6% in the eurozone (10.3% for the entire European Union), the US unemployment rate saw a precipitous drop in July by a whooping 0.2% to reach only 6.1%. This is the lowest unemployment level in the US since 2008 and just barely half of the eurozone equivalent. Also, the US economy added 288,000 new jobs during June (far more than expected by experts), while the leading European economy in Germany actually saw an increase in its unemployment instead, experiencing a negative job growth.

Despite almost continuing improvement of employment levels during Obama's reign, he still doesn't seem to reap any benefits from it, except for his 2012 reelection victory that is (which is already old news by this stage). While China (to some degree; see ghost towns, high levels of company debt) and Europe (to a very large degree) are struggling, the US is perhaps seeing its most healthy economic recovery since the recession kicked in. Then why doesn't this trickle down to Obama as well? How come he doesn't get more credit for his turnaround? Three of the states which were hardest hit by the financial meltdown, Nevada, Florida and Michigan, are now three of the states with the most impressive economic turnaround. Hardly coincidential, is it?

More on this story here: http://www.bloomberg.com/news/2014-07-03/payrolls-in-u-s-rise-more-than-forecast-jobless-rate-at-6-1-.html

[Tender Branson]

Here's the chart:

[Clarko95 📚💰📈]

Then why doesn't this trickle down to Obama as well? How come he doesn't get more credit for his turnaround? Three of the states which were hardest hit by the financial meltdown, Nevada, Florida and Michigan, are now three of the states with the most impressive economic turnaround. Hardly coincidential, is it?

The reason why he doesn't get more credit for the recovery is because it's been weak; people aren't feeling the recovery personally. Yes, unemployment has dropped and 9.7 million jobs have been created since February 2010, but many of these jobs have been low-paying and lack benefits, with a smaller share being higher-paying (hence the debate about college education and economic polarization).

Many of the jobs lost during the recession were middle-paying jobs; for example, 2.3 million manufacturing jobs were lost, and only 600,000 or so have been recovered. The middle class has shrunk dramatically since 2000. Older workers are hit hardest, having outdated skills and not finding work easily again. They despair, and their families and friends also despair and that affects their perception of the economy even if they are doing fine themselves.

Many people feel the federal government and Federal Reserve are more interested in re-inflating asset bubbles than actual stimulus spending (Fun Fact: of the $787 billion stimulus, $425 billion was a tax cut and only $362 billion was spending. Meanwhile, the Fed and the government have pumped something like $5.5 trillion into the global financial system via bailouts, spending, and 0.25% interest rates). People understand to a degree that the 2008 recession was not a regular recession, but they also believe Obama has focused too much on legacy building initiatives (healthcare, immigration reform) than on restoring the economy.

2% annual GDP growth, about 2-2.3 million jobs created annually, and a 4.1 percentage point drop in unemployment are very good by themselves, but in the context of the hole that was dug from 2007-2009 it simply isn't enough for people to feel good enough about the economy to rate Obama positively.

[Lief 🗽]

Thank you, President Obama, for this bounty of jobs you have bestowed upon us!

[Tender Branson]

Here are the latest EU figures (May 2014):



And a chart comparing the EU, €-Zone, US and Japan:

[Antonio the Sixth]

Thank you, President Obama, for this bounty of jobs you have bestowed upon us!

[Matty]

the number of full time jobs plunged by half a million.

[eric82oslo]

According to this graph, we're actually seeing a new morning in America:



Now all we need is that comforting voice-over with that soothing voice.

[eric82oslo]

The long term unemployment number has in fact more than halved since its peak in 2010, from close to 7 million at in 2010 to just barely more than three million today. Quite impressive I think! It has seen a much sharper decline than the overall unemployment rate.

[eric82oslo]

Gallup's Job Creation Index has also reached its highest level since 2007.

[AggregateDemand]

The fluctuations are driven by marginally attached employment and discouraged workers, as well as part-time growth in the new 29 hour economy. Poverty-rates and unemployment rates for the youngs are still at all-time highs, and GDP growth is still below the federal deficit.

The numbers are better than numbers moving in the other direction, but this economy still has another decade of recovery ahead at this rate.

[politicallefty]

There were positive revisions to April and May as well, accounting for an additional 29,000 jobs:

April +282,000 to +304,000 (+22,000)
May +217,000 to +224,000 (+7,000)

There's also other good news:

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[jaichind]

US Labor Force Participation Rate mostly held flat from last month which has been the trend for several months now.

[Tender Branson]

US Labor Force Participation Rate mostly held flat from last month which has been the trend for several months now.

As the big baby-boomer generation retires (a group that's bigger than those who are currently entering the labour force), the overall rate goes down. If for example 4 million 65 year olds are retiring each year, and only 3 million youngsters are entering the labour force - it will decline by 1 Mio. each year due to demographics.

[jaichind]

US Labor Force Participation Rate mostly held flat from last month which has been the trend for several months now.

As the big baby-boomer generation retires (a group that's bigger than those who are currently entering the labour force), the overall rate goes down. If for example 4 million 65 year olds are retiring each year, and only 3 million youngsters are entering the labour force - it will decline by 1 Mio. each year due to demographics.

Sigh.  We seems to re-ligate this every time unemployment numbers come out.  Yes, you are right about the generational trends.  But one easy way to account for that is to look at Labor Force Participation Rate by age bracket, especially working age bracket.

                    Jan 2000    Jan 2009      Mid 2013     Mid 2014
Age 25-34     84.5%          81.4%          81.3%        80.8%
Age 35-44     85,1%          84.0%          82.6%        82.3%
Age 45-54     82.9%          82.0%          80.1%        79.8%

We are in worse shape in terms of labor participation now than a year ago and significantly worse than Jan 2009 let alone Jan 2000.

[King]

Historically, in comparison to the Great Depression, we didn't recover until the 50s. That's a really long time.

So, why are your expectations for this recovery so much higher?

[sg0508]

My guess is, the "real" unemployment rate in America (counting part-timers who want full-time work and those unemployed, but having given up) is near 18-20%.

[eric82oslo]

My guess is, the "real" unemployment rate in America (counting part-timers who want full-time work and those unemployed, but having given up) is near 18-20%.

It's 15.7% according to Google.

[Matty]

I think the reason why Americans are not "buying into" this economic recovery is because of the nature of the jobs being created. Most are part time with little benefits. Likewise, people simply leaving the labor market because of the lack of good jobs is artificially lowering the unemployment rate.

There is definitely an economic recovery, but it's not being felt by most Americans. I just hope the employer mandate isn't too harmful. (It will certainly cause damage, though).

[m4567]

If job creation remains solid throughout the year, he may get some credit. If the trend continues into 2015, the "morning in america" hype may be on.

[Beet]

Depends on what you mean by 'recover.' I'd argue we were fully recovered from the Depression by 1942. By GDP, we had full recovery by 1937 or 1939 at the latest. Then again by GDP we had full recovery from 2008 some years ago.

[King]

Historically, in comparison to the Great Depression, we didn't recover until the 50s. That's a really long time.

So, why are your expectations for this recovery so much higher?

My expectations are not higher. However, considering I live in this era and not in the 30s, along with the fact that this crisis is a lot more important, I would hope for the economy to recover quicker even thought I know it will not...

What makes this crisis more important?

[King]

Historically, in comparison to the Great Depression, we didn't recover until the 50s. That's a really long time.

So, why are your expectations for this recovery so much higher?

My expectations are not higher. However, considering I live in this era and not in the 30s, along with the fact that this crisis is a lot more important, I would hope for the economy to recover quicker even thought I know it will not...

What makes this crisis more important?

What was our debt back then in comparison to now? The deficit too? Inflation as well? Not only that, no president during that era has spent so much as the current administration or the previous.

Our debt as a % of GDP was as much as 300% in the 1930s and 1940s to pay for the war, inflation was much worse with several doubt digit 10-18% spike years due to incompetent/inexperienced Fed decision making (as opposed today where inflation is a steady 1-3%), FDR could also take home the title of "most spending by a President in US history" in the context of his present time since the New Deal was the largest federal government expansion in history.

So no, we are actually better off in those parameters today than back then.

[Oakvale]

Historically, in comparison to the Great Depression, we didn't recover until the 50s. That's a really long time.

So, why are your expectations for this recovery so much higher?

My expectations are not higher. However, considering I live in this era and not in the 30s, along with the fact that this crisis is a lot more important, I would hope for the economy to recover quicker even thought I know it will not...

What makes this crisis more important?

What was our debt back then in comparison to now? The deficit too? Inflation as well? Not only that, no president during that era has spent so much as the current administration or the previous.

Our debt as a % of GDP was as much as 300% in the 1930s and 1940s to pay for the war, inflation was much worse with several doubt digit 10-18% spike years due to incompetent/inexperienced Fed decision making (as opposed today where inflation is a steady 1-3%), FDR could also take home the title of "most spending by a President in US history" in the context of his present time since the New Deal was the largest federal government expansion in history.

So no, we are actually better off in those parameters today than back then.

Inflation, currently, is just as bad as it was during the 30s. The fed is incompetent till this very day which is why we are in a mess. Inflation is much higher than 1-3 percent. Lol it's literally impossible for inflation to be that low with the fed pumping close to 100 billion a month into the economy. We are spending far more than back then even if government isn't expanding as much.

Where are you seeing this ~magic secret inflation~ exactly?

[Deus Naturae]

Historically, in comparison to the Great Depression, we didn't recover until the 50s. That's a really long time.

So, why are your expectations for this recovery so much higher?

My expectations are not higher. However, considering I live in this era and not in the 30s, along with the fact that this crisis is a lot more important, I would hope for the economy to recover quicker even thought I know it will not...

What makes this crisis more important?

What was our debt back then in comparison to now? The deficit too? Inflation as well? Not only that, no president during that era has spent so much as the current administration or the previous.

Our debt as a % of GDP was as much as 300% in the 1930s and 1940s to pay for the war, inflation was much worse with several doubt digit 10-18% spike years due to incompetent/inexperienced Fed decision making (as opposed today where inflation is a steady 1-3%), FDR could also take home the title of "most spending by a President in US history" in the context of his present time since the New Deal was the largest federal government expansion in history.

So no, we are actually better off in those parameters today than back then.

Inflation, currently, is just as bad as it was during the 30s. The fed is incompetent till this very day which is why we are in a mess. Inflation is much higher than 1-3 percent. Lol it's literally impossible for inflation to be that low with the fed pumping close to 100 billion a month into the economy. We are spending far more than back then even if government isn't expanding as much.

Where are you seeing this ~magic secret inflation~ exactly?

Asset prices.

It's also worth noting that a ton of the money the Fed pumped out isn't even in domestic circulation. A lot of it went overseas chasing better investment opportunities abroad, and a lot of it is just sitting in bank reserves. Much of the former will flow back in when the Dollar's status as the global reserve currency collapses, and the latter will be lent out by the banks eventually. When those things occur, then we'll start to see some real CPI action.