Jobs Report: 5.1 Unemployment Rate Doesn't Tell the Whole Story

The monthly jobs report in the U.S. comes from the Bureau of Labor statistics'(BLS) Current Population Survey(CPS). The CPS is a survey conducted by the United States Census Bureau for the BLS. The BLS uses the data to provide a monthly report on the Employment Situation in the U.S. This report provides estimates of the number people who are employed and unemployed in the United States.

In August, the economy added an estimated 173,000 jobs and the unemployment rate dropped to 5.1%. This is lower than the estimated 217,000 jobs most economists had expected.Employment in health care rose by 41,000. Employment in financial activities rose by 19,000 in August.
in August. 

Though America has added jobs in recent months, this is a good reason to be optimistic. There is some concern  that the increase in jobs has not been seen as widely in the manufacturing, according to Thomas Hemphill & Mark Perry :

"In September 2012, President Obama announced a national goal to create 1 million new manufacturing positions by the end of 2016. Since that announcement, the US manufacturing sector has created payroll jobs at a rate of only 11,000 per month and fewer than 300,000 jobs in total over the last 27 months. That rate of factory job creation would generate only about 560,000 new jobs by the time Obama leaves office -- a 440,000 job shortfall compared to the president's unrealistic goal of 1 million new factory jobs by the end of next year."

"We'll be lucky if we gain 600,000 jobs by next December. Even in that case, factory employment would only return to the January 2009 level of about 12.5 million payroll jobs, which at that time was the lowest level since the late 1940s, and 7 million jobs below the 1979-peak of 19.5 million factory jobs."


27 thousand jobs in manufacturing mining and logging were lost last month, undoing all the gains from the previous month. The lack of manufacturing jobs is a concern because they provide stability and strength to the economy.

So is the 5.1% number telling us the full story? The number you see in the headlines is referred to as the U-3 number which does not include:

• People who have been out of work for more than a year
• Those in part-time positions for people who would prefer full-time employment
• People so discouraged that they’ve stopped looking for work

When we include these numbers, referred to as the U-6, the unemployment rate is nearer to 10% down from 12% last year. It is important to note that both numbers have been decreasing steadily since the beginning of the recession, and especially within the last two years. It is unclear why the news media only uses the U-3 number in their report.

The unemployment rate drop can also be attributed to fewer people being counted as out of work but instead being considered outside of the workforce. The jobs report’s survey puts the number of unemployed persons down 237,000 to 8 million. The number of people out of the workforce climbed 261,000 to a fresh record of 94 million. We currently have the lowest labor participation rate in decades.

This can be attributed though to increased retirement by the baby boom generation. The survey includes all working age adults (age 16 and up). 94 million includes all stay at home mom's, people in college, and those who are retired.

Why does the unemployment number matter so much right now? The Federal Reserve has waited for the economy to show enough strength to start increasing interest rates. Most economists believed that if August showed strong numbers in job growth that would be the signal to being increases. One concern has been wages, which have not shown much growth for the last year, but which grew 8 cents in the month of August, which is cause for optimism.

While the report may not change views that the U.S. economy remains strong, the global markets remain unsteady including significant decline in China. This instability could further complicate the Fed's decision at a policy meeting mid month.

The reason why the interest rate is so important to job growth as explained by CNN Money:

"One of the Federal Reserve’s mandates is is to maintain full employment. When unemployment rises, it can try to stimulate growth by cutting rates. The idea is that cheaper borrowing makes it easier for consumers to spend and for businesses to expand and hire new workers. The flipside is that higher interest rates and tighter money supply can make hiring less likely. That’s one of the reasons the Fed has been so hesitant to raise rates in recent years, and there’s a risk that a too-early rate hike will cut off job growth."

Overall the continued growth is a good sign for the economy and it is likely we will start to see interest rates increase in September. Most of the indicators for the U.S. economy are showing good signs.

Confederate Flag Discussion Distracts From Major Issues Facing Our Nation

Image Source: Flickr

In case you have been hiding under a rock the last few weeks a mentally unstable young man entered a black church in South Carolina and killed 9 African-Americans. It was later discovered that Dylann Roof was a white supremacist with pictures found of him in front of the Confederate flag. Since then there has been a national debate about whether or not the confederate flag should come down from the South Carolina statehouse, which finally happened today.

Whether you see the Confederate flag as a symbol of hatred and racism, or of heritage and history, what we must realize is that this issue doesn't really affect most of us. Every day this story  has been the top of every news hour, and each day more important issues continue to be ignored. Why? Because they don't bring as much emotion to our hearts and excitement to our minds. Those in the news industry care more about the money they can make by talking about sensationalist stories rather than more pressing issues.

While the U.S. has been surrounded by news about the Confederate flag, major issues loom over the horizon. Our national debt has recently passed the $18.3 trillion mark. It is inexcusable for us to continue in a path that puts our spending on the backs of our children and grandchildren. If we were really paying attention to the news we would see the real effects of this debt on a nation as we observe Greece fall to pieces. Not to mention the increasing threat of a new financial crisis and our inability to handle it.

Not only should we be concerned about our national debt, but we should have concern for the labor market, which still faces record low labor participation rates, meaning that the fewest percentage of working age adults are currently working or seeking for work in decades. The 5.3% U3 number we hear on the news only includes part of the total number of unemployed persons, more than likely our real unemployment is at least 10%. We also fail to  realize that over 300,000 jobs that were created in the last year were in the food service industry and that wages have stagnated for years.

We are also in the midst of preparing for the campaign to elect the next president of our country. Many are getting distracted by flashy populist statements without considering fully where each individual stands on the issues. I recommend you visit the site ISideWith.com , and take their quiz to see who you side with on the issues.

During the flag debate we also saw Congress give President Obama massive amounts of leeway on trade issues by granting him Trade Promotion Authority, or Fast Track as it is also known. This version of Fast Track doesn't do nearly enough to put in place Congressional oversight over trade pacts that are in the works like the TPP and TTIP. Many have concerns over how these deals will take place, but the media has paid hardly any attention to these deals.

Even with this debate, the real issue we should be discussing is the need to reform the treatment of mental health in our nation, to help prevent tragedies like this from happening again because I can guarantee the real cause wasn't the Confederate flag.

We need to wake up as a nation and not be sucked as deeply into debates that have little real impact on the daily lives of most Americans. We cannot continue to be sucked into sensationalist stories and debates when there are more impactful issues that surround us on every side.

The Jobless Recovery: What the Media Isn't Telling You

As I said before, often the mainstream media doesn't report the whole truth of what is going on in our country. While they may be aware that we are still coming out of a recession, the media reports that unemployment is around 7 percent nationwide. The truth is that our unemployment is closer to 23 percent according to government shadow statistics.

The 7 percent number makes things not sound as bad right? Well that's because it doesn't include people who have been out of work for more than a year, those in part-time positions who’d prefer full-time jobs and people who are so discouraged that they’ve stopped looking for work. This is the lie that the media is telling you.

What you haven’t heard is jobless claims unexpectedly went up 40,000 more than expected last week. Initial claims were at a seasonally adjusted 379,000 according to the Labor Department. That is the highest level since march and it was the second straight week that claims have risen.

Additionally, More than 4.4 million people received unemployment benefits in the week ended Nov. 30, the latest data available. That was 600,000 more than the previous week. The majority of recent college graduates cannot find work in their field, and many who are often are underemployed.

For those who are job hunting, many are ending up at temp agencies, hoping somehow to get enough money to pay next month's rent. But that'll be one more job added to payrolls next month, when that college grad starts temping for 9 dollars an hour.

To top it off, congress was the least productive it has been in decades, and is considered to be the worst ever according to a recent CNN poll. Between government shutdowns and debt ceiling debates it's clear that our leaders aren't focused on helping us.

So what has the media been focused on? Well let's see, Mega Millions, Duck Dynasty, Miley Cyrus, not to mention the whole Black/White  Santa scandal, all of which the CNN, MSNBC and FOX News have spent countless hours debating, discussing and picking apart every detail.

We need to wake up to what is going on in America, unemployment and underemployment are much higher than we are being told, and there must be further discussion on what can be done to solve these problems by the media and our leaders.

Mainstream Media Control

I read a lot of news articles every day, and I try my best to read articles from across the country and world, from different viewpoints. But until recently I didn't know that really many of these organizations are the same at the core.

Did you know that in 1983 the mainstream media was made up of a collection of more than 50 companies, and that now power and control of our news outlets has been condensed to 6 mega huge corporations — News Corp, Disney, Viacom, Time Warner, CBS, and Comcast — who work in conjunction with various political figures to literally decide what news is delivered to the public, and what level of truth is behind that news. They control everything we watch, read, and hear in regards to the news.

The truly terrifying thing about our current reality is that there are so many things wrong with America, with our presidential administration, and our overall standing on the global stage that the media simply isn’t reporting on. This translates to ordinary Americans who are completely unaware of the poor economic health of our country.

While they may be aware that we are still coming out of a recession, the media reports that unemployment is around 7 percent. The truth is that our unemployment is closer to 23 percent according to government shadow statistics.

The 7 percent number makes things not sound as bad right? Well that's because it doesn't include people who have been out of work for more than a year, those in part-time positions who’d prefer full-time jobs and people who are so discouraged that they’ve stopped looking for work. This is the lie that the media is telling you.

So wake up and do your own research! Shake up the world and get involved. Read and observe and most of all get involved in the world around you! The core of American Democracy is civic engagement and it has begun to wither as people have slumped into their chairs and left it up to politicians to decide their fate. In honor of Peter O'Toole I will add this one quote from Lawrence of Arabia "Nothing is written."