In what’s become a familiar tradition every first Friday of the month, the BLS published its employment report, which shows the unemployment rate dropping even though the jobs numbers were dismal. According to the BLS Establishment Survey of various industries, only 88,000 non-farm payroll jobs were created in March, even though the employment-age population grew by 167,000 over the same time.
So why did the U3 unemployment rate tick down a point to 7.6%?
You guessed it – the labor force shrunk. And it shrunk dramatically.
Peeking into the numbers of the BLS Household Survey, you will find that the labor force shrunk by 496k, taking the labor force participation rate down to its lowest level since 1979. There are now 663k more people not in the labor force, which means that 90 million Americans who are of working age are not in the labor force.
Obama will likely blame today’s job report on the sequester. But the reality is that professional and business services, which includes a lot of government contractors, added 51,000 jobs while retail lost 24,000. That tells you it was all about the fiscal cliff tax hikes on consumers, not the sequester.
Parting question: is now the time to add another million foreign workers per year?
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