Economy & Budget

The economy is fantastic. Remain calm. All is well.

The economy is fantastic. Remain calm. All is well.

The unemployment rate is up, the economy has contracted for the first time in three years, yet my Twitter feed keeps telling me the underlying dynamics of the economy are just awesome.

We added 157,000 jobs in January and the unemployment rate ticked up to 7.9 percent. After $7.66 trillion in stimulus spending, a Federal Reserve pumping tens of billions into the economy week after week, we have an unemployment rate that is one tenth of a point higher than the one we had when Barack Obama took office. As Reuters points out, “Economists say employment gains in excess of 250,000 a month over a sustained period are needed.” That stagnation looks something like this:

fredgraph

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There were some upward revisions in the jobs report, as the Labor Department adjusts payroll figures based on tax filings by employers for unemployment insurance. The fact is that if we measure those who’ve quit looking for jobs as well as those working part-time for economic reasons the unemployment rate is 14.4 percent. “Indeed, if labor force participation were the same as when Obama took office, the unemployment rate would be 10.8%,” points out AEI’s James Pethokoukis. Here’s what that disaster looks like:

laborforce

Even if we were to believe all the rosy projections and spin being offered by mainstream economics and business journalists, we’d still have to admit we’re in the middle of stagnation – perhaps only a shove away from another recession. By any tangible measure, by the measures the White House has laid out, Obamanomics has failed, yet the press, so invested in the president’s success, spins (read David Freddoso’s new book) .

Here’s the Los Angeles Times:

The pace of job creation is consistent with moderate growth and could ease concerns that the economy’s unexpected contraction in the final three months of last year was a sign another recession could be near.

Under what metric is this considered “moderate growth.” Compared to which recovery?

Here’s NPR: “Though Jobless Rate Stays Stuck, Job Growth Looks Much Stronger.”

The New York Times, among many others, continue to claim that “dysfunction” in Washington has “dampened consumer confidence,” regurgitating the White House’s preferred excuse these days. But what Republican obstructionism are they talking about? The GOP swiftly surrendered on the fiscal cliff, giving Obama his tax hike on the wealthy while increasing spending. The GOP gave the White House the clean debt ceiling hike it wanted. Isn’t it more likely – or, at the very least, just as likely — that the threat of higher taxes is holding back growth? You wouldn’t know it reading media reports. It also persists in peddling the myth that cuts in government spending have undermined economic growth when in the fourth quarter of 2012, Washington spent $908 billion, which was $30 billion more than it spent in the last quarter of 2011 and nearly $100 billion more than it spent in the third quarter of 2012. But why let facts get in the way?

Unemployment broken down:
Men – 7.3 percent
Women – 7.3 percent
Whites – 7.0 percent
Blacks -13.8 percent
Hispanics – 9.7 percent
Teens – 23.4 percent

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