Some recovery

Some recovery

May 14th, 2012 in Opinion Free Press

Is the economy having fun yet?

You wouldn't know it from recent unemployment reports. Only by using the most ridiculous accounting gimmicks can it be claimed that joblessness actually fell in April, for instance.

Officially, the rate ticked down from a high 8.2 percent to a high 8.1 percent, and 115,000 jobs were created.

But those gains were more than offset by the numbers of Americans who simply gave up looking for work and dropped out of the workforce altogether last month. Because they are not actively seeking employment, they are no longer counted in the unemployment rate. The labor market participation rate fell in April to a three-decade low -- only 63.6 percent -- as about 342,000 Americans left the workforce. That is not, in fairness, exclusively a result of people giving up the job search. Baby boomer retirements make up part of that. But people ending their job hunts are a significant part of the picture.

Reuters news service put it mildly: "Even a slight drop in the unemployment rate to 8.1 percent had a dark tone because the fall was due entirely to people dropping out of the workforce," it reported.

And an investment strategist with Prudential Fixed Income told Reuters, "The bottom line is you don't have evidence that this economy has reached escape velocity."

The bad news on jobs was many-faceted.

There had been hope that the economy would create a better, if not thrilling, 165,000 jobs last month rather than the 50,000 fewer that actually materialized.

And April was the third consecutive month in which job creation slowed.

If those numbers don't excite you, you might want to go into seclusion for the next couple of years. The Federal Reserve predicts that it will be at least 2015 before the labor market gets back to "full health," Reuters noted. That's more than two and a half years away.

"We've got to do more if we're going to recover all the jobs lost in the recession," President Barack Obama said in a speech in Virginia in response to the painful new numbers.

And by "more" he means, of course, more government intervention and spending and higher taxes on "the rich," all of which have proved historically to suppress economic growth rather than encourage it.

But there is more that the American people can do, particularly starting in November, to turn things around. We can elect members of Congress and a president who understand the economic benefits of limited government.

Or we can just wait around under existing policies for a strong job market to return -- in 2015.