Friday, August 7, 2009

The News Isn't Good, It's Just Not as Bad

Look, I'm glad the unemployment rate dropped in July. But let's keep things in perspective, shall we?

As Chris Isidore of observes, economists expected more than 300,000 jobs to be lost in July. Actual job losses were a shade under 250,000 — "the fewest job losses since August 2008."

Good news?

Well, for those who look only at the numbers — and not at the human suffering behind the numbers — I suppose it is good news.

But it reminds me of the "good news" I heard a few months ago, when job losses in May were not as bad as they were expected to be.

Many in the administration hailed the news as a sign that unemployment was easing. Then the jobless report for June came out — nearly half a million jobs were lost and the national unemployment rate went up to 9.5%. In a month's time, the employment situation didn't look as rosy anymore.

Today's figures reduced the unemployment rate by a statistically insignificant 0.1%. But, for those who want to latch on to any scrap of good news as a reason to proclaim that happy days are here again, let me remind you that no jobs are being added. Indeed a quarter of a million people, most of whom, presumably, were employed on Independence Day, have joined the ranks of the jobless.

Remember when job losses in five digits was considered alarming? A monthly job loss in six digits is the norm now.

The administration may claim that a certain number of jobs were "saved" by the stimulus package, but I have seen no evidence to back that up. And, as I wrote earlier this week, the president apparently abandoned his campaign pledge to give tax credits to businesses that hired people in the United States in 2009 and 2010 when his much–ballyhooed stimulus package was being hammered out in February.

That promise was articulated in Ohio at a time when the state was still considered to be straddling the electoral fence. Perhaps it was all rhetoric that was merely intended to win votes. But, at the time, Barack Obama sure sounded — as I wrote this week — like job creation was going to be a priority.

He spoke of his great concern that economists were anticipating that the unemployment rate would reach 8% by the end of 2009 and said, "We can't wait until then to start creating new jobs."

But, since winning the election and taking office, Obama apparently has had other priorities.

Well, because job creation has not been one of them, there is a new problem emerging.

By next month, Julianne Pepitone reports for, hundreds of thousands of Americans will run out of unemployment benefits.

Even with the extensions that have been granted, "[m]ore than 650,000 Americans will have used up all of their unemployment benefits by September, in what experts say could be the start of a looming crisis," Pepitone writes.

Paradoxically, these people may slip, unnoticed, through the cracks because "they will soon be unaccounted for in government unemployment reports," Pepitone writes.

"The Labor Department doesn't track anyone who has moved beyond 26 weeks of unemployment in its weekly data on continuing claims (the number of people who request benefits after their first week). And, said Stella Cromartie, spokeswoman for the Bureau of Labor Statistics, the agency does not currently have plans to begin tracking this population."

The irony is that these people, who are every bit as unemployed as they were when they were terminated in 2008, won't be counted as unemployed by the government, possibly permitting the government to claim that employment actually is improving when, in fact, it is doing no such thing.

"[B]y late summer the government may begin reporting significant declines in continuing filers," Pepitone says. "But it won't be cause for celebration. Instead of indicating that the economy is on the rebound, it could mean that more people are falling off the radar."

As we continue to learn, the government's bean counters can play all kinds of games with numbers.

But what about the games they are playing with lives?

No comments: