Hidden unemployment numbers stymie Obama’s job growth claims

Neil Munro | White House Correspondent

There’s so much hidden unemployment in the labor force that even Friday’s improved jobs numbers failed to decrease the official unemployment rate of 8.3 percent…

In February, the private sector added 233,000 new jobs, but 476,000 non-working people began looking for a job. According to Bureau of Labor Statistics (BLS) rules, only by seeking work did those individuals officially become unemployed.

That’s because BLS does not count workers as unemployed unless they have actively searched for work in the last four weeks. As a result, millions of non-working people are not counted as unemployed by BLS officials.

The statistical quirk is the flip side of the administration’s effort to minimize the high level of unemployment for the last three years, and it may hinder progressives’ efforts to claim victory on the jobs front in November.

If more non-working people begin searching for jobs, “the economy is going to have to create an average of 246,000 jobs between now and November, just to keep the unemployment rate at eight percent, and so we are not even at that pace yet,” said Doug Holtz-Eakin, an economist and the president of the American Action Forum.

If the BLS rules weren’t in place, the current unemployment rate would be somewhere around 11 percent, analysts say. The unemployment number would be as high as 15 percent if part-time workers seeking full-time employment were recognized in the unemployment rolls.

This quirk today helped Republicans discredit claims by liberals in the White House and the media that President Barack Obama’s policies are reviving the economy.

“I don’t think anyone should be happy with 8.3 percent, and I don’t think anyone should play this as a victory,” said Holtz-Eakin.

White House spokesman Josh Earnest emphasized the numerical accumulation of new hires and downplayed the unemployment rate.

“Today’s jobs numbers are a continuation of a trend that is encouraging. … Over the last six months, we’ve seen 1.3 million private-sector jobs created,” he said.

”We’re digging out of a very deep hole. … There’s a lot more work that remains to be done,” he said, without mentioning the unemployment rate.

Earnest also tried to downplay the entire subject of jobs and unemployment.

“As you know, we don’t get too excited about one month’s jobs numbers beating expectations, and we don’t get too disappointed if there’s one month of jobs numbers that fails to meet expectations,” he said.

“The president and his team are trying to set low expectations so they can clear the hurdle” in November, Holtz-Eakin said. “I don’t think the people [share those] lower expectations.”

Republican Rep. Michele Bachmann pushed the same theme.

“Today’s jobs numbers from the Bureau of Labor Statistics may elicit elation from President Obama, but for the millions of Americans who remain unemployed and the millions more who have given up looking for work or are underemployed, today’s unemployment rate of 8.3 percent is another reminder that this President still doesn’t understand that government doesn’t create jobs,” she said in a statement Friday.

But the White House’s spin is already shaping the coverage by the media. For example, the New York Times’ top-of-the-page headline declared, “U.S. extends its run of solid job growth another month.”

For some people, “it appears that we are looking at a world where expectations are so low that 8.3 percent unemployment is okay,” Holtz-Eakin told The Daily Caller.

“It shouldn’t be [because] there are millions of Americans out there who would like to get jobs and have those jobs cover their monthly bills, and that’s the agenda that should be the focus of his attention,” he said.

“There is more to economic performance than just counting jobs. … [Swing voters] are looking at their budgets and not liking what they see,” he said. “They are hurt by high gasoline prices, they are hurt by high food prices, they continue to see their health insurance premiums go up when the president promised they would be lower, and those aspects of economic performance are ones that the president simply has not delivered on and indeed continues to go the wrong direction,” he added.

This fight over expectations is a key battle as the November elections approach.

Obama and his allies have tried to manage expectations, arguing that the nation’s unemployment rate and debt would be even greater without Obama’s direction of the economy.

By contrast, free-market advocates say the president’s progressive policies are preventing a faster recovery from the impact of the government-inflated property bubble.

In dueling rhetoric and image-making, GOP officials want voters to judge Obama by his failure to achieve the goals he promised in 2008, while Democrats want the voters to compare Obama to the not-yet-nominated successor to former President George W. Bush.

Some left-of-center economists acknowledge the reality of off-books unemployment.

“Finding a job remains very difficult,” said Chad Stone, chief economist at the Center for Budget and Policy Priorities. The “most comprehensive alternative unemployment rate measure — which includes people who want to work but are discouraged from looking and people working part-time because they can’t find full-time jobs — was 14.9 percent in February, down from its all-time high of 17.4 percent in October 2009,” he wrote the center’s blog.

“By that measure, almost 24 million people are unemployed or underemployed,” he said.

In February, the private sector added 233,000 new jobs, but 476,000 optimistic or desperate non-working people began looking for a job and were added to the unemployment rolls.

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