Contributed by Mike Walker, Col. USMC (retired)
New Job Numbers
All,
Most were happily surprised at the drop in unemployment rate, while some others were suspicious about the rate going below 8% right as the election draws near.
I am not a fan of conspiracy theories and do not believe in one now. Nonetheless, someone has to explain how this happened and why this is good news. Here is why:
It has been bantered about that the decrease is due to a rise in involuntary part-time employment. That is dubious news as the number is seldom discussed and an INCREASE had traditionally been seen as BAD not good news (see: http://www.newswiretoday.com/news/110482/).
Additionally, a jobs number in the range of 114,000, the September number, is NOT good.
The figure of 300,000 to 400,000 jobs per month is considered "robust growth." (see: http://www.usnews.com/news/articles/2012/04/04/march-job-gains-good-but-market-may-have-hit-plateau?vwo=ecfb2).
Together, the numbers do not make a lot of sense:
2012 Month Unemployment Rate New Jobs Created Involuntary Part-time Employment
April 8.1% 115,000 7.7 million
May 8.2% 69,000 8.1 million
June 8.2% 80,000 8.2 million
July 8.3% 163,000 8.25 million
August 8.1% 96,000 8.03 million
September 7.8% 114,000 8.61 million
The bottom line is that two pieces of bad news (weak job creation and an increase in involuntary part-time employment) is double bad news while the declining unemployment rate is good news.
But what does it all mean?
Mike
