May 31, 2012
Tomorrow, the Bureau of Labor Statistics will release May unemployment data. If the unemployment rate stays at or above 8 percent, it will mark the 40th consecutive month of 8 percent unemployment, the longest sustained period of such unemployment since the Great Depression. This would be extremely disappointing news for our country. If the rate falls below 8 percent, you might expect many of the president’s supporters to maintain that his policies have brought the unemployment rate below the 8 percent barrier. As a reminder, the administration claimed that the unemployment rate would not reach 8 percent if his failed stimulus bill became law.
Regardless of what the data shows tomorrow, below are some key economic facts that can be used by Members when discussing the report:
- The unemployment rate has fallen over the past eight months because the percentage of able Americans seeking employment has plunged to a 32-year low as fewer people search for jobs.
- Since 2008, the year President Obama was elected, median family income has declined by $1,154.
- In 2011, economic growth was 43 percent lower than in 2010.
- Economic growth for the first quarter of 2012 has already been revised down to an anemic 1.9 percent.
- President Obama’s policies have failed and mired the nation in the weakest recovery since the Great Depression even if the unemployment rate continues to inch downward.
THE FACTS ABOUT THE ECONOMY UNDER PRESIDENT OBAMA
Any way you look at it, we are suffering though the weakest recovery since the Great Depression. The following figures demonstrate—regardless of what the unemployment rate might be—that the President’s agenda is detrimental for the economy as a whole and especially for the nation’s most vulnerable citizens.
- Job Growth Slowest Among Post-War Recessions: According to data from the Minneapolis Federal Reserve, after the same amount of time following a recession, the average job growth in the past 10 recoveries was 6.9 percent. Under President Obama, jobs have grown by just 1.9 percent.
- GDP Growth Revised Down, Trending Down: On May 31 the Bureau Of Economic Analysis announced that the economy grew at a 1.9 percent pace in the first quarter of this year, slower than the 2.2 percent rate initially reported. GDP growth in the first quarter of 2012 was down from the 3 percent growth in fourth quarter of 2011. On an annualized basis, GDP growth in 2011 was 1.7 percent, down from 3 percent in 2010.
- 1 in 2 People are Now Poor or Low-Income: According to a December Census Bureau report, nearly half of all Americans are now classified aspoor or low-incomeas a result of the Obama Economy. The 97.3 million Americans who fall into the low-income category combined with the 49.1 million who fall below the poverty line now equal 146.4 million people or 48 percent of the U.S. population.
- Record Number of Americans on Food Stamps: The number of Americans receiving food stamps as of February 2012 was 46.3 million. Today, 15 percent of Americans receive food stamps, an increase of 44 percent since President Obama took office.
- Half of Recent College Graduates Are Jobless: More than 50 percent of recent college graduates are unemployed. About 1.5 million, or 53.6 percent, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed.
- Ease of Starting a Business in the U.S. Fell from 4th to 13th: According to the World Bank’s Doing Business 2012 report, the U.S. now ranks 13th in the world in the ease of starting a new business and has been steadily declining since President Obama took office. In 2011, the U.S. was 8th. In 2009, the U.S. was ranked 6th. It was 4th in 2008 and 3rd in 2007.
- Economic Growth Lagging Far Behind Historic Recoveries: In an economic failure unprecedented in postwar America, the Bureau of Economic Analysis statistics for the first quarter of 2012 show that 18 quarters after the start of the recession, this recovery has still not matched its pre-recession real per capita GDP level. On average, America's postwar economy has recovered all lost real per capita income by the 6th quarter after the recession’s start—about a year and a half—while this recovery has still not recovered after 18 quarters—over 4 years.
- The American People Know that the President’s Policies are Making the Economy Worse. According to a May 21 NBC/WSJ poll, only 33 percent of respondents believe the economy will get better in the next year, down five points from April and seven points from March. In addition, approval of President Obama’s handling of the economy stands at 43 percent, down two points from last month, his worst showing on this question since December. And just a third of respondents (33 percent) think the nation is headed in the right direction. In a May Washington Post poll, 83 percent of those in the poll rated the state of the economy as “poor” or “not so good,” a much higher portion of negative views than at any other time in the 10 years preceding the recession.
The following statistics (denoted with an asterisk [*]) are based on April unemployment data and are subject to change when new data is released on June 1, 2012. These statistics will be revised accordingly and re-circulated on June 1.
- Total Employment Still Down: While the unemployment rate has fallen in recent months, the actual number of people in the U.S. with a job has decreased by 322,000 since President Obama took office.*
- Percentage of Working Americans at a 30-Year Low:The labor force participation rate, which measures the percentage of able Americans working or looking for work, was at a 32-year low of 63.6 percent in April. Much of the recent decline in the unemployment rate can be attributed to the historic drop in labor force participation as more and more American give up on finding a job.*
- Youth Unemployment Worst since the Great Depression: The unemployment rate among youth job seekers between the ages of 16 and 19 was 24.9 percent in April. Youth unemployment has been above 23 percent for 34 months, the longest streak since the Great Depression.*
BACKGROUND ON UNEMPLOYMENT RATE TRENDS
Since President Obama took office, his failed economic policies have been underscored by the fact that the national unemployment rate has been above 8 percent for 39 consecutive months. In recent months, however, the unemployment level has steadily fallen. From September 2011 to April 2012 the unemployment rate fell from 9 percent to 8.1 percent. While this may appear to be good news for millions of struggling Americans, unfortunately the labor market remains weak overall and the number of jobs in the country has remained relatively flat over the past three years. The unemployment rate is not an account of how many Americans have a job, but rather a ratio of how many Americans have a job compared to how many Americans are actively searching for a job. Thus, as a smaller percentage of people search for jobs in this stalled economy, the unemployment rate will drop even if total employment remains flat or goes down. For instance, from February 2009 through April 2012, the number of Americans with a job (total employment) fell by 322,000, but the unemployment rate actually dropped from 8.3 percent to 8.1 percent over the same time period.
Since the unemployment rate would likely increase if more Americans begin searching for work, the rate may still increase as the summer approaches and more people enter the labor force. In recent months, however, the percentage of able-bodied, working age Americans searching for work has fallen to a 32-year low of 63.6 percent and has been steadily declining for over a year. While the working aged population has grown by 8.48 million since January 2009, the number of people looking for a job has grown by only 129,000. This fact reiterates that there is a massive sense of hopelessness among Americans in the Obama Economy, but if the trend continues it could result in the unemployment rate synthetically falling below 8 percent in the near future, even without ample job growth.
Many times, a falling unemployment rate may not reflect the number of people that have gotten jobs, but rather how many have stopped looking for a job. Consider a hospital with two hundred sick patients, but only enough medicine for 150. It could be said that the under-treated rate was 25 percent (the 50 people who would not receive medicine). If 25 of those 50 patients were to stop seeking treatment, the rate of under-treatment would fall from 25 percent (50/200) to 14 percent (25/175). But has this really improved the situation? That is akin to how the unemployment rate is calculated. Without actual job growth and a healthy, growing labor pool, a falling unemployment rate merely reflects the fact that more patients are choosing to end treatment, as opposed to curing their disease.
For more information or questions please contact Andy Koenig at 6-2302.
For additional information, contact:
The House Republican Conference Policy Office