Though the unemployment rate dropped to 6.7% in December 2013, the lowest point since in more than five years, the economy added an unimpressive 74,000 jobs, according to the jobs report released this morning by the Bureau of Labor Statistics (BLS).
Coming off consecutive months of solid gains, economists expected the economy would add 200,000 jobs in December. The ADP survey released earlier this week estimated that 238,000 jobs were added to private payrolls. Unfortunately, the BLS report comes in well below those expectations, adding the fewest number of jobs since October 2008.
The disappointment isn’t limited to the total number of jobs added, but also that 347,000 people left the workforce in December. That brings the labor force participation rate to 62.8%, where it was in October 2013 and, also, its lowest point since 1978.
Here’s the chart via Zero Hedge (click to enlarge):
The October jobs report surprised analysts, many of whom thought that the government shutdown would have a negative impact on the economy. Not only were 204,000 jobs added last month, the two previous months were revised upward by 60,000.
The bad news is that the unemployment rate ticked up slightly to 7.3%, as did the U-6 unemployment rate, now at 13.8%. The worse news is that number of workers not in the labor force exploded by 932,000 in October, according to Zero Hedge, bringing the labor participation rate to 62.8%. Not only is this the lowest rate since the aftermath of the 2007-2008 recession, it’s the lowest since 1978.
The Employment Policy Institute (EPI), a leftist think tank, offered a rather grim take on the jobs report and the long-term outlook.
The Bureau of Labor Statistics released the latest jobs numbers on Friday showing that the economy added 195,000 in June. The White House, which has been plagued by lackluster economic numbers since coming into office in 2009, praised the report, claiming that the stimulus bill “helped bring the recession to an end and put us on the path to recovery.”
That’s wishful thinking. The stimulus bill — the American Recovery and Reinvestment Act of 2009 — was an $831 billion bill that the Obama Administration said would keep unemployment under 8%. Well, they were wrong. Unemployment topped out at 10% in October 2009, eight months after the stimulus bill was signed into law. According the the June 2013 reports, unemployment is still high, at 7.6%, and there are signs that the job market is being hampered.
The effects of ObamaCare on employment have been well noted. Businesses had been looking for ways to avoid the employer mandate, which requires them to offer insurance coverage to any employee working 30+ hours a week, and had begun slashing hours. It appears, based on last month’s jobs report, that there has been a surge in part-time hiring, which some attribute to ObamaCare:
Since he’s been in office, President Barack Obama has constantly railed against higher-income earners and talked about the need for tax hikes. Throughout the course of the “fiscal cliff” discussion, Obama stressed the need for a “balanced approach,” meaning a combination of tax hikes and spending cuts.
However, the “fiscal cliff” deal that was passed by Congress yesterday is horribly unbalanced — cutting spending by $1 for every $41 of tax hikes — and costs upwards of $4 trillion. But Zero Hedge put out this chart this morning that really puts it all in perspective:
You may have heard at the end of last week that gross domestic product (GDP) grew by 2.2% in the first quarter of 2012. While the number is still good news, showing our economic is growing, the rate of growth was much lower than anticipated, leading many to fear that our recovery may continue on the slow trend we’ve seen in the last two years.
However, what hasn’t been mentioned much is the rate of growth in the national debt in the first quarter. It’s no secret that the United States government is still hemoraging money, creating a river of red ink from Washington. And while we may have some growth in the economy, fiscal concerns seem like an afterthought to many in the nation’s capital.
That’s not a pretty sight, folks.
Nearly two weeks ago, the Congressional Budget Office (CBO) issued a report on the budget outlook for this year, noting that taxpayers can expect yet another trillion dollar deficit — $1.08 trillion, to be exact, under President Barack Obama. But a new estimate from the White House from the yet to be released budget proposal shows a slightly higher deficit — $1.33 trillion — than the CBO, showing that the Obama Administration has no intention of reducing the red ink flowing out of Washington:
President Obama’s Monday budget request to Congress will forecast a fiscal year 2012 deficit of $1.33 trillion and will include hundreds of billions of dollars in proposed infrastructure spending, The Wall Street Journal reported on Friday.
The projected deficit is higher than 2011’s $1.296 trillion deficit and slightly higher than the Congressional Budget Office’s roughly $1.15 trillion projection released last week. The budget, according to draft documents viewed by Dow Jones Newswires and The Journal, will forecast a $901 billion deficit for fiscal 2013, which would be equivalent to 5.5 percent of gross domestic product. That is up from the White House’s September forecast of a deficit of $833 billion, or 5.1 percent of GDP, the newspaper said.
According to The Journal, the White House’s projected 2012 deficit would be about 8.5 percent of GDP.