RUSH: So all you people that are finding jobs out there, isn’t it great, isn’t it fabulous? Everywhere you look people are getting hired. You can see it in the unemployment number. Why, do you know we created seasonally adjusted 200-some-odd-thousand jobs? Do you know what the raw number is? From the Bureau of Labor Statistics’ own table, the raw number, before there’s any seasonal adjustment, the raw number is that from December to January, we lost two million jobs.
JOHNNY DONOVAN: And now, from sunny South Florida, it’s Open Line Friday!
RUSH: Don’t ask me about seasonal adjustment. I’ve been trying to figure this out all morning, and I can’t. But the raw numbers, 130 million jobs in December, 128 million jobs in January, give or take a couple hundred thousand either side. But when the seasonal adjustments take place, there is a gain of 200, whatever they’re reporting, 33,000 jobs. Now, what’s happening is the labor force is shrinking. There are fewer jobs. Even the Drive-Bys, so excited, they can’t wait to report the good news, but even they are reporting that the labor force participation rate, number of jobs out there, is continuing to dwindle, and most of the jobs being created are low wage.
But none of that’s gonna matter. None of it’s gonna matter. I don’t want to be an “I told you so,” but way back last year, even recently toward the end of last year, this being an election year, I predicted. But you knew. You knew what was gonna happen when this year started. You knew that the statistics are that no president has ever been reelected when the unemployment rate’s over 8%. So guess what it’s gonna be by the time we get to Election Day? It’s just that simple.
How are you, folks? Great to have you here. It’s Super Bowl Friday, and although I haven’t officially set it up, I did get a confirmation note back from the Hutch about a half hour ago. We are gonna talk a little Super Bowl with Ken Hutcherson in the last hour today. You know, he loves being on this show so much he’s never thrown away the hotline number. I think the hotline number is the number one number in his Rolodex, ahead of family, anything. So I think he knows how to get hold of me. If he doesn’t I’ll hear about it in mere moments. (interruption) You know how to get hold of him? Oh, well, academic. Snerdley knows how to get hold of him on his own, just like a good call screener should.
Telephone number, 800-282-2882. The e-mail address, ElRushbo@eibnet.com. Great to have you here, Open Line Friday. You get to talk about what you want, the one day of the week, doesn’t matter what I want to talk about, when we go to the phones, it’s your show.
In December, the number of jobs in this country — this the from the Bureau of Labor Statistics’ own table today, they do the unemployment numbers. The number of jobs in December, 132,952,000. The number of jobs in January, 130,400… so there are actually two and half million fewer people working in January than there were in December. But those are raw numbers. That’s before the seasonal adjustment take us place. Table B-1 is where this is from, from the BLS numbers. Now, I don’t pretend to understand the seasonal adjustment. I’m not taking issue with it. It seems like the statistical formula that’s used, given what they’re trying to accomplish, makes sense. All I know is that the raw number is down two and a half million jobs. I’m not making it up and it’s not in a Drive-By story and it’s not some Looney Toon blog. It’s the government. The Bureau of Labor Statistics.
Tyler Durden at Zero Hedge: “Great news from today’s BLS report, right? Wrong,” he says. “As is well known banks have been firing workers left and right: These are the jobs that actually matter in the grand withholding taxes scheme of things. Yet someone is getting hired supposedly. Well, as we suggested before the NFP report, this is merely rotation from high paying jobs to ‘low-wage jobs.’ And no, it’s not our words — this is what CRT Capital says. Per Bloomberg: About 113k of NFP gain from ‘low wage jobs,’ David Ader, strategist at CRT Capital Group, writes in note. Additionally, ‘we didnÂ’t see the drop in courier and messengers as expected.'”
Christmas, they hire all kinds of couriers and messengers to take gifts all over the place in the cities. We didn’t see the drop in those jobs that normally you get. So the regime is still counting them. We’ll probably get ’em next week during the adjustment that nobody pays attention to. “Long-term stress remains at the U6 measure.” That’s 15.1% and that’s the combined total of people who’ve given up looking for work. Remember, the unemployment number is people still looking for work and can’t find any, up to 99 weeks of unemployment, maybe a little longer, but the U6 is everybody, including those who’ve quit. It’s 15.1%, and the unemployment rate for blacks, 13.6%. For teenagers, 23.2%, and for Hispanics, ten and a half percent. And yet everybody is harping on Romney for not caring about the poor. It’s Obama’s that has these numbers.
Now, more from Tyler Durden at Zero Hedge. “A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%,” meaning the universe of jobs. “Looks like the good folks at the BLS heard us: it appears that the people not in the labor force,” the number of jobs not available to be filled, “exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month!”
That’s part of this two and half million fewer jobs. Are you hearing me on this, folks? It is corrupt as it can be. Well, now, the wait a minute, though. There’s nothing new here in the seasonal adjustment. Normally we never talk raw numbers. Nobody ever reports or talks about raw numbers. I happened to see today the raw numbers, and little red flags are going up, my curiosity is being piqued here. And then I see that the labor force participation rate, 1.2 million people dropped out of the labor force in one month, and it happens to be December to January. “So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7%.”
That means the number of people working and looking is just 63% of our population. When you take those numbers and when you shrink the labor force, you are reducing the overall universe of jobs, and therefore the unemployment rate can do nothing but come down. It can do nothing but fall when you reduce the universe number that employed and unemployed are being measured against. Now, we noted the other day, the Congressional Budget Office, let’s not forget their report. We’re looking at 1% economic growth in 2013, 2.2% economic growth this year. And the CBO report that we had admits that the labor force numbers are skewing the real unemployment number down. That was part of their report that we told you about on Wednesday. And if it were more accurate, the unemployment rate would be 1.25% higher than it currently figures to be.
It’s all in the story that we had on Wednesday. I ought to go back to the archives and get it. But the CBO explained all of this. And they said, if the labor force participation rate doesn’t decrease, if they don’t reduce it, then add 1.25% to 8.3, and you have a 9.5% unemployment number today, and a 16% unemployment rate U6. Now, that’s not the only good news. Look at this. This is from a outfit called the Partnership for Strong Communities. “Report Finds Marginal Declines in US Homelessness Report.” Folks, this is a scoop, since this miracle has not been reported anywhere else that I have seen. We are supposed to believe here that the number of homeless went down from 2009 to 2011, which just happens to coincidence with the time Obama’s been in the White House.
“A new report from the National Alliance to End Homelessness (NAEH) shows a nationwide 1% decrease in homelessness, although NAEH notes that this is not indicative of a permanent trend.” Nope. If we get a Republican back in the White House, homelessness will shoot right back up! “The NAEH report, ‘The State of Homelessness in America 2012,’ used data from the U.S. Dept. of Housing and Urban DevelopmentÂ’s collection of Point in Time (PIT) homeless counts gathered from all the states from 2009-2011. The report showed a nationwide 1% decrease in homelessness…” You know what’s bogus about this? We don’t know! Remember the homelessness census that we had to do way back when?
For you young-uns, there used to be a guy by the name of Mitch Snyder in Washington, Community for Creative Non Violence. Martin Sheen was a big supporter. Martin Sheen would go to Washington now and then on a cold winter night, he’d kick a homeless guy off his sewer grate, and Martin Sheen would sleep on it to “show solidarity” with the freezing homeless. And a lot of celebrities did it. And then they’d have homelessness dinners where they’d eat cardboard or some such thing and then after it was over, then they’d go chow down somewhere. They pegged the number of homelessness at three million for years, decades. Three million! Nobody ever, ever knew. It was a wild guess.
The media ran with it. There was no authority for it, no source authority. Finally, they decided to do a homelessness census — and what a boondoggle that was! They sent government census-type people into the worst neighborhoods in the country to try to count the homeless sleeping in their cardboard boxes. And the homeless, of course, were violent people in many cases and these census people got scared. The number they came up with, as I recall, was about 750,000. Now, this was in the late eighties-early nineties. That was when this was hot and heavy.
RUSH: Grab audio sound bite 24, 25. I just got these. This is Obama in Arlington, Virginia. He was at Fire Station No. 5. Do you know what I heard him say today? He said to local communities (impression), “Why don’t you hire some of these veterans that are coming home as cops and firemen?” And that, ladies and gentlemen, is a wonderful illustration. Obama’s got no problem laying off 80,000 soldiers. He will not lay off any cops or firemen, but 80,000 soldiers? Fine! Now they’re coming home, and he wants the local communities to hire them as cops and so forth. That’s right. Downsize the military. Now, here’s Obama. He’s in Arlington, Virginia, Fire Station No. 5. We got two sound bites, and here’s the first one.
OBAMA: This morning we received more good news about our economy. In January, American businesses added another 257,000 jobs. The unemployment rate came down because more people found work. And altogether we’ve added 3.7 million new jobs over the last 23 months.
RUSH: Now, I… (sigh) All I can tell you is every word of this was predictable. You knew this was coming, so hang in there and be tough and don’t get depressed. Obama keeps complaining about the high unemployment rate of veterans. What’s causing that? Who’s causing that? Why is Obama complaining about the high unemployment rate of anybody when he’s out there touting all these new jobs being created? Here’s the second sound bite of Obama in Arlington, Virginia, Fire Station No. 5.
OBAMA: These numbers will go up and down in the coming months, and there are still far too many Americans who need a job or need job that pays better than the one they have now. But the economy is growing stronger. The recovery is speeding up. And we’ve gotta do everything in our power to keep it goin’. We can’t go back to the policies that led to the recession, and we can’t let Washington stand in the way of our recovery. So I want to send a clear message to Congress: Do not slow down the recovery that we’re on. Don’t muck it up. (applause) Keep it movin’ in the right direction.
RUSH: Obama warning Republicans: “Don’t muck up the economy. We gotta keep it goin’. We can’t go back to [the Bush years] the policies that led to the recession.” Now, back to these numbers. (I have 45 second here to try to squeeze this in.) The non-seasonally adjusted numbers say that the economy lost 2.5 million jobs December to January. Those are the raw numbers I just gave you. But the Bureau of Labor Statistics is saying, using seasonally adjusted numbers, that the number of jobs increased by 233,000 or 243,000 or whatever it is. That’s a difference of 2,739,000 jobs. That is one heck of a difference! How do you “seasonally adjust” 2,700,000 jobs? The raw number and the seasonal adjustment, I’m sorry, I don’t understand how they get there.
RUSH: The Quincy Journal, QuincyJournal.com, out of Madison, Wisconsin. “If labor unions’ strength lies in numbers, a new report indicates unions’ most powerful days may be behind them.” This is a story about union membership in Wisconsin is dwindling. “Membership in organized labor unions dropped last year in Wisconsin by 16,000, according to the latest data from the U.S. Bureau of Labor Statistics. That left 13.3 percent of the employed population — 339,000 workers — represented by unions, down from 14.2 percent in 2010.” Now, what could explain this? I mean, if we got all of this great job-creation going on, all these employment numbers ratcheting up…?
Look at this: 200,000-some-odd jobs in Wisconsin. Union jobs are decreasing. Union membership is decreasing. What’s going on? Does it have anything to do with what Scott Walker is doing? Might it have something to do with the fact that the people of Wisconsin have been educated now about what they are paying government union members in Wisconsin, how much more government union employees make than private sector people in Wisconsin than the people who pay them? Could it be because there are fewer jobs? Could it be because we aren’t creating new jobs?
Could it be that union membership in Wisconsin is down because the number of jobs available is down? When you look at the raw data — which is my point today. When you look at raw data in states or in communities or something that is as narrowly focused as union membership, you don’t see numbers that would correspond with the unemployment news that’s been coming out the last couple-three months from Washington. Washington’s telling us all these jobs are being created, and you look around the country: Banks laying people off; now union membership Wisconsin is down. The raw numbers from December to January: 2.5 million fewer jobs in January than December.
RUSH: The Washington Times’ take on the numbers. “The big drop in the unemployment rate in recent months,” is due, economists say, “because of young people dropping out of the labor market as it is the result of businesses adding jobs.” In fact, the unemployment rate is more tied to people leaving the labor force than it is tied to businesses adding jobs. That, I think, is pretty safe to conclude.
RUSH: Forty-eight percent of all Americans are either considered to be “low income” or living in poverty. But the economy is getting better out there. And we had dueling endorsements yesterday, the Battle of Endorsements: Trump endorsed Romney and Jesus Christ endorsed Obama’s tax plans. Well, he did! That’s what Obama said. There are fewer nonfarm payroll jobs in America today than there were back in 2000 even though we’ve added 30 million to the population. That is a staggering number. The American population’s grown by 30 million since 2000, and there are fewer payroll jobs. Back in 1980, less than 30% of all jobs in America were low-income jobs. Today, more than 40% are low income. BLS numbers here, folks.
RUSH: In the meantime David in Myrtle Beach, South Carolina. Great to have you, sir, on the Open Line Friday. Hello.
CALLER: Hi, Rush. Yesterday I had to make a tough decision to close a small business which I’ve been owner/operator of for the past eight years. And I heard the sound bites earlier of the president speaking of the “improving economy.” I guess I didn’t get the memo ’til today. So, you know, we’re… (sigh) We’ve been hit pretty tough down here, and… (sigh) I don’t know. I don’t know what. I don’t know what they’re thinking, if they just are so separated from reality or what, but (sigh) I don’t feel an improving economy for sure.
RUSH: Oh, they’re not just separated from reality. They are living a different reality. They are projecting a different reality. And they’re attempting to tell everybody else, like you, that your reality isn’t real. So what kind of business did you have that you had to shut down?
CALLER: Wholesale lighting. We dealt with residential builders and, you know, we’ve watched it go down over the past few years here.
RUSH: Okay. Let me ask you a quick question, because one thing Obama said yesterday when he was talking about the economy roaring back and we gotta keep it going… One of the things he said, David, that he had to do to keep this recovery going was to eliminate the tax subsidies that the oil companies are getting. Would that help you if Obama raised taxes on Big Oil?
CALLER: No. You know, fuel’s been one thing that’s been killing us, but I look at the taxes when the pumps here when we fill up the trucks and, you know, that’s been killing us. So I don’t see that happening. The regulations, the hoops that we have to jump through in small business are killing us.
RUSH: So I just want to be clear. The president said yesterday that in order to help guys like you, your business, we’ve got to raise tax on the oil companies. And you just said that wouldn’t help you?
CALLER: No, I don’t see where that would help me. No.
RUSH: Yeah. Well, I didn’t think it would. In fact, raising taxes on the oil companies would probably raise your fuel prices.
CALLER: I would think so. That’s kind of the way business works.
RUSH: Well, you could be number 608 this year to go buy a Volt.
CALLER: Yeah, well… (chuckles) I don’t think we have too much luck delivering stuff to a construction site in a Volt.
RUSH: I’m sorry to hear this. I know this has to be hard.
Obama said that this morning. I’m sorry, he said the oil company tax this morning. People like you all over the country, they’re shutting their doors. They are shutting down. Some are not. I don’t mean to say that there aren’t individual examples, pockets of examples. Nothing is static. In every economy, somebody is doing well when somebody’s hurting. Not because. It’s not a causal relationship always. But my favorite example of this is the seventies. The price of oil plummeted so low that domestic producers in Louisiana and Texas had to cap their wells. They couldn’t bring the oil out of the ground without losing a lot of money.
Now, the consumer was benefiting like crazy with cheap gasoline prices. The domestic oil business was shut down in many states. And Shell Oil. Shell Oil has announced losses in the billions because of Obama’s moratorium on drilling in the Gulf of Mexico. And yet we’re told all this wonderful news is happening out there. All this wonderful economic news is happening. This great economic growth is taking place. And the evidence is not there to support that. This poor guy, David, I could have asked: Would cutting the payroll tax have helped save his business? No. It wouldn’t have. He doesn’t have customers. He’s in the housing market of South Carolina. What did I say, the unemployment rate there is 10.8% in South Carolina? That’s above Obama’s federal national average.
I could ask this guy who shut his business: Everything Obama’s done, if he did it more would it help you? He’d answer “no” to every question. This employment number… If you’re just joining us, I want to give you the raw numbers again. In December, there were 132.9 million people working. In January, there were 130.4 million jobs. So 2.5 million fewer people working. Raw numbers, not seasonally adjusted — and I will admit, I don’t understand the seasonal adjustment and how it’s done. I don’t understand former. I am not commenting on it. I’m not sure saying it’s ridiculous or it’s wrong or it’s inaccurate. I don’t know it.
So 2.5 million fewer jobs in January from December. The unemployment rate goes down from 8.5% to 8.3%. The seasonal adjustment. This is what I don’t understand. Maybe somebody from the BLS is out there can call me. Maybe the Hutch will know when he calls us to talk Super Bowl. I don’t know how you go from 132.9 million people working in December to 130.4 million people working in January. That’s a loss of 2.5 million jobs. I don’t know how you get from that to an increase of 233,000 jobs after the seasonal adjustment. I just don’t know. This is the first time that I have been directed to and seen Table B1 in the release that comes out every month from the Bureau of Labor Statistics that mentions these raw numbers.
We’ve talked raw numbers. I’ve seen the numbers but not in this context. We have mentioned the number of jobs lost in terms of the universe, the labor force participation rate.
We have mentioned the number of jobs lost in terms of the universe, the labor force participation rate, but this is the first time in the discussion of the monthly unemployment numbers that I have seen anything like this. It probably happens all the time and I just don’t understand seasonal adjusting. No, I don’t. I really don’t. The seasonal adjustment is a time-honored proven and established, accepted way of reporting and measuring unemployment. I just don’t understand it. I need to see a definition of what seasonal adjustment actually means. Gotta know that before you can understand the math behind it. But just plain, simple math, I don’t understand how you lose 2.5 million jobs in a month and in the same month the government says there was after seasonal adjustment a 233,000 increase in jobs.
Now, what we do know about the 233,000 jobs, we do know that most of them are low paying, and what we also know from these two sets of numbers is that the unemployment rate from 8.5% to 8.3% does not mean businesses are hiring. It means that fewer people are in the workforce. That’s what it means. In fact, these two numbers are not the only numbers. I know numbers can run together on the radio. Let me go through this again. In December the number of people working, the number of jobs, is 132.9 million. In January it was 130.4. So that’s a difference of 2.5 million jobs lost.
Now, the BLS also admits that the labor force participation rate dropped by 1.2 million jobs from December to January. So you’ve got 2.5 million fewer jobs, and out of that two-and-a-half million, 1.2 million of them are said to be gone forever. The labor force participation rate, just the number, out of the market. So there’s three numbers here: 132.9, 130.4 equals 2.5 million, and then 1.2 million, both negative, and yet you end up with 233,000 jobs added, according to the regime.
RUSH: I’m trying to get to the bottom of this, this seasonal adjustment business. Stick with me on this, folks. From the Bureau of Labor Statistics: “What is seasonal adjustment? Seasonal adjustment is a statistical technique that attempts to measure and remove the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month. Over the course of a year, the size of the labor force, the levels of employment and unemployment, and other measures of labor market activity undergo fluctuations due to seasonal events including changes in weather, harvests, major holidays, and school schedules. Because these seasonal events follow a more or less regular pattern each year, their influence on statistical trends can be eliminated by seasonally adjusting the statistics from month to month.”
So seasonal adjustment includes adjustment for the size of the labor force. I didn’t know that. Seasonal adjustment is not just what the guess is about the number of jobs from month to month. It also includes adjustment for the size of the labor force. And that’s how they’re able to play games with the labor force participation rate. So that might account for a big chunk of the difference here. One-point-two million — and this is their number — from December to January, 1.2 million people left the workforce, just left it. That’s the labor force participation rate, and they left. That’s half the number, or half the difference right there. If you take the number 132.9 jobs in December, 130.4 million in January, that’s 2.5 million fewer jobs, 1.2 million, about half of that that they just threw out in a seasonal adjustment of people that left the workforce.
I don’t know how they get the 1.2 million. They say it’s statistical. But what they did is reduce the overall number of jobs possible by 1.2 million. So fewer jobs is gonna bring down the unemployment rate because… If the labor force were what it is, or what it was when Obama was inaugurated 2009, the unemployment rate would be close to 10%. It’s only 8.3 because they have used seasonal adjustment to just say that last month, 1.2 million people gone from the workforce. No jobs anymore.
So the Bureau of Labor Statistics looks at the loss of 2.5 million jobs, and they say, “Well, we think 1.2 million have just decided to give up looking for work so we won’t count half of them, just to make things more accurate.” And even with that major cheat, that still leaves more than a million-and-a-half lost jobs unaccounted for. Fewer people looking for jobs brings down the jobless rate. In this case, not more people finding jobs brings down the jobless rate. Fewer people looking for jobs is what’s bringing the unemployment rate down. There isn’t job creation going on. Not to the tune the regime wants you to believe it. It just isn’t happening.
RUSH: So even if the unemployment number is 8.3%, it took us $5 trillion in spending to get there. For the record, the average unemployment rate under Bush was 5.2%. It was only as high as 7.3% one time, and that was the last month of Bush’s regime, and that happens to coincide with the bottom falling out of the national mood after Obama had won. That’s when businesses started firing people, laying people off, was after November of 2008.