Two economic data bits were released this week which illuminates a malaise in our economy that has not been seen since maybe the Great Depression of the 1930s. Earlier this week the number of layoffs for the month of June came in at some 46, 000, a full 40% higher than June of 2014. And today it was announced that this pathetic economy, supposedly in recovery, created only 223,000 new jobs. But what is worse, the Workforce Participation Rate (which measures the percentage of working aged adults working or looking for work, i.e. people in the workforce) has dropped to 62.6%.
When Barack Obama became president in January 2009, the Workforce Participation Rate stood at 65.7%, a full three percentage points higher than the current rate. This is an unprecedented drop in so short a time, and the current level is the lowest it has been since the Carter years of the late 1970s. As the Workforce Participation Rate shrinks, the headline unemployment number (which does not count those who have stopped looking for work because the job market is so bad) also decreases because their are fewer people in the job market in total.
Not only are there fewer people looking for work and actually working, but the number of new jobs created six years into this supposed recovery has barely kept pace with historical averages since the end of WWII. During economic recoveries job growth spikes, the worst the recession, the more jobs are created in the recovery. During the Reagan recovery of the 1980s the economy saw months in which almost a million jobs were created. During the past six years job growth has not even averaged 200,000 jobs a month.
And if all of the previous data is not illustrative of a severely enervated job market, the number of unemployed adults in the U.S. now stands north of 92 million, an all time record high. The reason for the pathetically weak job market is the pathetically weak economy. The Gross Domestic Product of the United States actually shrank in the first quarter by 2 tenths of one percent. This shrinkage comes on the heels of six years of below the post WWII average of 3.2% per quarter. Again, the GDP should grow at 4-5% a quarter during a recovery, and at a greater rate during a recovery from a severe recession. During the Reagan recovery the economy saw some quarters growing at 6-7%.
So while the Obama administration crows about how well they have stewarded the "worst economy in 70 years," ask the 92 million unemployed or the 50 million on food stamps how that stewardship has improved their lives. Unless one thinks fewer jobs, more illegal immigrants, higher health care costs, higher fuel costs (remember gas was $1.75 gallon in 2009), and less growth in the economy is somehow an improvement. But then there were all those people who thought a naked emperor was wearing clothes.