President Obama lauded the drop in the unemployment rate from 9.7% to 9.5% as a sign of “continuing recovery” in a brief speech at Andrews Air Force Base this morning. “Make no mistake: We are headed in the right direction,” the President said before heading to West Virginia for Senator Byrd’s funeral. Most complicit mainstream media coverage has gleaned on the 9.5% figure, but the internal unemployment data tell a very different story.
The jobless rate fell solely because 652,000 unemployed people stopped searching for work and left the labor force during the month of June. People who have ceased looking for work are no longer counted as unemployed. The decline of 301,000 household employees was more than negated by the drop of 652,000 in thew work force.
Private businesses did add 83,000 new jobs to their payrolls last month, but nearly half of those were seasonal hotel and hospitality positions. On the surface, the figure may sound encouraging, but our economy needs to add almost 150,000 new jobs each month jobs just to keep pace with new workers entering the market. We now have 14.6 million Americans actively seeking employment now with millions of others having given up hope.
In a written statement, House Minority Leader John Boehner unloaded on the President this morning, saying, “This jobs report is a disappointment for every family and every small business who heard President Obama declare just weeks ago that our economy is getting stronger by the day… The writing is on the wall for President Obama’s ‘stimulus’ policies and everyone — taxpayers, economists, and the rest of the world — sees it but him.”
Boehner’s assessment of the President’s rosy view of the economy appears to have merit. Housing sales plummetted 33% last month and new home construction declined by almost 30%. Automobile sales also plunged 30% in May and the Dow Jones Industrial Average has dropped over 10 percent over the past 3 months. With dramatic tax increases set to resume in six months, the long-term prospects of genuine improvement in the jobless rate seem remote.