If you’re a member of the Obama Administration or a supporter of same, you were probably pretty excited yesterday when the Labor Department announced that 295,000 jobs were added to the nation’s payrolls in February. That’s just barely above replacement levels considering the growth in the population, but it sounds like a big number and it’s certainly better than the stinker numbers we were looking at the first quarter of 2014.
Obama himself appears quite convinced that this number proves his economic policies are working.
But there’s a problem: The new-jobs-added number is only part of the story, and I’m starting to suspect that Obama’s staff doesn’t even tell him the whole story. Another very important part of the story is that first-time unemployment claims jumped last week to 320,000, which is up from 313,000 the previous week.
That’s more than the number of new jobs created. So it may be that the U-3 unemployment rate – the one that doesn’t count those who’ve stopped looking for work or have otherwise left the work force – has declined to 5.5 percent. But the number of people filing first-time unemployment claims is rising, so the whole picture is not nearly as positive as that one isolated number would suggest.
I wonder: Does Obama even know this? Does anyone tell him? If they do, does he understand why it matters? Given Obama’s overall poor understanding of economics, I can envision a scenario in which Obama’s advisors give him the Cliff Notes summary of the latest economic reports, along with their recommended political talking points to accompany the numbers.
And off he goes, talking up the new job creation. Is it really that implausible? He rarely holds a press conference or gets asked about the details of these economic reports, and most of the White House press corps are political and not economic reporters who just eat out of the White House’s hand anyway. What serious risk is there of a reporter challenging Obama about new unemployment claims and Obama standing there looking foolish like he doesn’t know what’s going on? (Besides, contrary to what Obama supposedly told David Axelrod, he is an excellent BSer and could probably fake his way through it pretty effectively. His friends in the MSM wouldn’t call him on it even if they knew he was BSing.)
There is always a lot more to the economic picture than a particular number reported in isolation. For instance, there is always a lot of attention paid to the quarterly reports on GDP growth. We hear that the economy grew by 1.0 or 2.0 percent – which is not very good – or that it grew by 4.0 or more, which is much better.
But context matters here. Growth from what to what? Usually they don’t even tell you the entire gross domestic product. If I told you that in the fourth quarter of 2014, the GDP was $16.8 trillion, what would your reaction be?
“Is that good?” (Not really.)
Growth of 5 percent from a crappy number is not the same as 5 percent of growth from a healthy number. But all they tell you is that it’s 5 percent. Until they revise it downward later when not as many people are paying attention.
The point is that there is a lot to get your head around if you’re going to truly understand the state of the economy. Most people don’t have all the information, so they either form their impression from the shallow reporting they hear, from the proclamations of politicians, or from their own personal experience. Very few people really know or understand the whole story.
And every time Obama speaks about this, I become more convinced that he is one of those who not only doesn’t understand the facts, but doesn’t even know very many of them.
