The U.S. unemployment rate was reported at 4.9% last week, the first time it’s been below five percent since early 2008. Unfortunately, that low number masks what’s really going on in the U.S.: underemployment is still near double-digits, wage growth is a joke, and 15% of Americans receive food stamps. The U.S. economy is not doing well and that 4.9% unemployment rate proves it.
President Obama Champions Rigged Unemployment Data
The U.S. unemployment rate fell below five percent for the first time since early 2008. But you’d be hard pressed to hear any cheering. Not because people aren’t happy the data shows the U.S. economy is chugging along, but because no one believes the U.S. economy is doing well. It’s fair to say most Americans don’t really believe what they hear coming out of the Oval Office.
First, the so-called “good” news. The Bureau of Labor Statistics announced last week that the U.S. unemployment rate dipped to 4.9% in January, as the country added a princely 151,000 seasonally adjusted jobs. (Source: “Employment Situation Summary,” Bureau of Labor Statistics, February 5, 2016.)
Naturally, a desperate President Obama in need of positive reinforcement opined, “After reaching 10 percent in 2009, the unemployment rate has now fallen to 4.9 percent even as more Americans joined the job market last month. Americans are working.” (Source: “The Employment Situation in January,” White House web site, February 5, 2016.)
He’s right; Americans are working. Sadly, they’re working two or three jobs to make ends meet. The biggest gains were made in retail trade, food services, and drinking places. Retail trade added 58,000 jobs in January, while employment in food services rose by 47,000 jobs. Over the past year, food services has added 384,000 jobs.
So, low-paying jobs are taking the place of higher-paying jobs. And there’s more to the data than just the unemployment rate. The underemployment rate is at a seasonally adjusted rate of 9.9%. Not seasonally adjusted, it’s at an eye-watering 10.5%.
If Obama wants to take credit for the state of the U.S. economy, he’s free to do so.
15% of Americans Receive Food Stamps
“The United States of America right now has the strongest, most durable economy in the world,” Obama said in the same video address.
The unemployment rate is at 4.9% and the stock market, while off to a rocky start, is still near record levels. It doesn’t matter that the stock market is overvalued and unsustainable, that the underemployment rate is above 10%, and that fourth-quarter gross domestic product (GDP) came in at paltry 0.7%. It’s all about perception—and relativity. The rest of the world is doing worse.
Take away the vanity mirror in Obama’s pocket and the average American, if they’re lucky enough to have a job they want, is stuck with stagnant wages. Yes, wages increased by 0.5% in January, but that’s a pretty inconsequential number. And wages have only begun to rise. What about the last seven years?
Perhaps this is why Americans are not feeling very optimistic. It’s tough to feel good about the so-called recovery when you don’t have enough extra money kicking around to pay your bills, let alone pump it into the overvalued stock market.
Since the stock market bottomed in March 2009, the S&P 500 has gained, even with the current chaos, 176%. The number of Americans receiving food stamps has also increased to 36.6%. Since 2008, the year before the markets crashed, food stamp usage has increased 38.3%. (Source: “National Level Annual Summary,” U.S. Department of Agriculture, last accessed February 8, 2016.)
Today, 45.76 million Americans participate in SNAP (the Supplemental Nutrition Assistance Program). Somehow, in the midst of a 4.9% unemployment rate and rising wages, 15% of the U.S. population still receives food stamps. It simply doesn’t add up.
Could it be because the low-paying jobs Obama created can’t keep up with the “official” inflation rate of 0.7%? Or maybe they’re having difficulty living with an unofficial inflation rate of 10%? (Source: “Chapwood Index,” Chapwood Index web site, last accessed February 8, 2016.)
I can almost picture a smiling Obama, standing in front of a food bank with a “Mission Accomplished” banner waving in the background.
Who needs reliable, well-paying jobs when you can point to a number like 4.9%? Maybe the 15% of Americans on food stamps? The end justifies the means for Obama. The man who wowed the crowds with his oft-repeated campaign staple, “it is time for change,” was right for once. Sadly, it was eight years in the making.