U.S. employers added 192,000 workers in February, amid an improving economy and more seasonable weather, and the unemployment rate unexpectedly declined to 8.9 percent, the lowest level since April 2009.

So what’s the bad news? In short the primary reason unemployment is falling is that labor force participation rate is at a 27 year low. We have to go all the way back to March 1984 to find a participation rate this low. As Ed Morrissey notes:

The lower denominator makes the overall jobless rate look better than it should. If we were at the same participation rate as we saw in mid-2008, we would probably add two or three points to the unemployment rate. And at some time, those workers will re-enter the job-seeking population and the rate will rise accordingly.

So while the media is trumpeting the good news about the falling unemployment rate you might want to ask yourself why there’s no mention of the shrinking workforce or the gross disparity between the Department of Labor report and private-sector surveys such as Gallup. Which shows unemployment at 10.3% and underemployment at 19.9%.

The short answer is that the DoL has been steadily shrinking the work force by eliminating those who fall off unemployment rolls without finding a job or who failed to check-in with a state employment office in the past month. This little bit of statistical voodoo grossly understates the level of real unemployment. It’s easy for the Bureau of Labor Statistics to pretty up the numbers when they’ve chopped 500,000 from the workforce in their latest revision.

Related

• True Unemployment Still Over 10% – AJ Srata, The Strata-Sphere
• The new underclass and Barack Obama – James Pethokoukis, Reuters
• Utah Considers Return to Gold, Silver Coins – Fox News
• Democrats keep misleading on claimed budget ‘cuts’ – Glenn Kessler, The Washington Post
• ‘Good’ Jobs Report Has Dark Side – Rick Santelli, CNBC
  

I really can’t add anything here other than pointing you to a rather chilling analysis from Investor’s Business Daily: U.S. Won’t Recover Lost Jobs Until March 2020 At Current Pace.

This election is probably one of the most critical in history, if can’t break the Democrats hold on Congress we’re doomed to years of high unemployment, limited economic growth and diminished liberty.

WASHINGTON (MarketWatch) — The U.S. economy lost 95,000 nonfarm jobs in September as local and state governments shed positions at a faster rate than the private sector was adding, the Labor Department reported Friday.

The drop of 95,000 was much wider than the 8,000 decline expected by economists surveyed by MarketWatch, and the 57,000 jobs lost in August.

The nation’s unemployment rate remained steady at 9.6% as fewer new workers joined the labor market than in the previous month. Economists had expected a slight increase in the jobless rate.

Unemployment has now been above 9.5% for 14 straight months, as the Associated Press notes that’s the longest since the 1930s.

As a practical matter, with the mid-term elections just a month, this isn’t good news incumbent Democrats seeking re-election. They’re controlled Congress and the nation’s purse strings since January 2007 and what do have to show for it? I mean other than 14 months of 9.5% plus unemployment and a stagnant economy?

Related

• Gallup Finds U.S. Unemployment at 10.1% in September – Gallup
• Will election workers skew Friday job stats? – New York Post
• Job losses in 2009 likely bigger than thought – Reuters
• Dollar’s Fall Roils World – Wall Street Journal (Subscription Required)
• Greenspan Says U.S. Creating `Scary’ Deficit By Borrowing – Bloomberg

Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions “a depression, and not just some garden-variety recession,” and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered “euphoric response.”

“Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times,” he said.

Mr. Rosenberg’s argument it compelling, I’m not sure agree with him, but like I said I’m a pessimist on the economy. I’ve thought all along this so called recovery was more akin to a dead cat bounce than an actual meaningful sustained recovery… And that’s what the data seems to indicate. All the indicators I’m looking at, employment, housing, durable goods, and consumer confidence are pointing to anything but a recovery. Are we actually in a depression? I don’t know, but I think it’s safe to say this isn’t a garden variety recession.

Related

• Yes Folks, Hindenburg Omen Tripped Again – Wall Street Journal
• Asian markets continue retreat from risk – Financial Times
• U.S. deficit forecast masks true scope of problem – James Pethokoukis, Reuters
• Youth Unemployment Hits Record High – CNBC
• July New-home sales drop to record low 276,000 yearly rate – Market Watch
• Second Quarter GDP Growth Revised Downward – Wall Street Journal
• What Biden didn’t mention on stimulus – Associated Press
• The Most Fiscally Irresponsible Government in U.S. History – Mort Zuckerman, U.S. News
• Bad statistics for summer employment for youth – McClatchy

Suffices to say and up tick in new jobless claims was entirely expected by anyone with half a brain… and that’s exactly we got:

WASHINGTON (MarketWatch) — The number of people filing first-time claims for unemployment benefits climbed 13,000 in the latest week to 472,000, indicating continued weakness in the labor market.

Although claims have fallen 22% from one year ago, they are up 4% since the start of 2010, according to data from the Labor Department. Weekly claims typically would have to fall below 400,000 to signify improved nationwide hiring trends.

Economists surveyed by MarketWatch had expected initial claims to fall to 455,000. See our complete economic calendar and consensus forecast.

The four-week average of initial claims — a better gauge of employment trends than the volatile weekly number – rose by 3,250 to 466,500, the highest level in almost three months.

While claims tend to align with job growth over the longer term, the weekly data is prone to sharp fluctuations. A clearer picture of job growth will emerge Friday when the government releases its monthly employment report for June.

Tomorrow’s monthly unemployment report should be interesting, economists are reportedly expecting the economy will have added 110,000 jobs in June, excluding the departure of temporary Census workers from government payrolls. Personally, I’m kind of pessimistic about about those forecasts, most of today’s economic news today is discouraging… Manufacturing declined in June, so did construction spending, and pending home sales. All in all this is look more like a dead cat bounce than a recovery.

Ed’s got a great chart illustrating just how unexpected today’s news is over at Hot Air.

What say you:

The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows caused layoffs to rise.

In addition, many state agencies in the mid-Atlantic and New England regions that process the claims were closed due to the storms and are now clearing out backlogs, a Labor Department analyst said.

The department said Thursday that first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.

Bad weather can cause job losses in construction and other industries sensitive to weather.

I’m sorry but I have to ask… Unexpectedly by whom???

JWF sums things up nicely:

It’s comical how every story about job losses always calls it unexpected, with pointy-headed experts baffled by the news. Maybe someone can ask Professor Obama about this grim news today during his six-hour lecture to Republicans.

Um, yeah, I’d pay money to see that!

Anyway, it’s not the weather that’s driving these new jobless claims it’s the slumping consumer confidence and  home prices coupled with the Millions of Americans who are underwater on their mortgages… roughly 300,000 of them are facing foreclosure each month. Americans simply don’t have the discretionary capital to invest or consume they they used to. Bottom line we’re not going to see anything resembling a meaningful recovery until that changes.

Related

• US Jan mass layoffs edge up on weak manufacturing – Reuters
• Read His Lips: Obama Calls for Increasing Payroll Taxes on ‘Households’ Earning Less Than $250,000 Per Year – CNSNews.com
• Obama May Prohibit Home-Loan Foreclosures Without HAMP Review – Bloomberg.com

The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economic recovery.

Initial claims for state unemployment benefits increased 31,000 to 473,000, the Labor Department said on Thursday. That compared to market expectations for 430,000.

Another report from the department showed prices paid at the farm and factory gate rose a faster than expected 1.4 percent from December after a 0.4 percent gain in December, as higher gasoline prices and unusually cold temperatures helped boost energy costs.

To be honest I’m more concerned the sharp rise in producer prices than I am about the increase in new unemployment claims. In short, inflation is starting to rear its ugly head; frankly I think we’re head for a dead cat bounce rather than a recovery. What say you?

Related

• Fed Raises Discount Rate Quarter Percentage Point – Wall Street Journal
• U.S. stock futures fall as economic data disappoints – MarketWatch.com
• Jobless Claims in U.S. Rose Last Week to 473,000 – Bloomberg.com
• Leading Economic Index in U.S. Increased 0.3% in January – Bloomberg.com
• Obama ‘Agnostic’ on Deficit Cuts, Won’t Prejudge Tax Increases – Business Week
• Dear Mr. President: Why We Are Not Hiring – C. Edmund Wright, American Thinker

Anyway, the Associated Press got to use it’s favorite adverb, “unexpectedly“, again today:

The job market is lurching toward improvement. It just has a long way to go.

The outlook for jobs became a bit less bleak Friday when the government released January’s unemployment rate showing an unexpected decline from 10 percent to 9.7 percent. It was the first drop in seven months.

Still, the government now estimates 8.4 million jobs vanished in the Great Recession. And economists say the nation will be lucky to get back 1.5 million of them this year. They also warn it will take until the middle of the decade for the job market to return to normal.

The economy is growing, and normally job creation would be strengthening. But the job market is weighed down by employers who remain slow to hire because consumers are not spending enough. Companies worry about their prospects once government stimulus aid fades. They also fret about possibly higher costs related to taxes or health care measures from Congress and statehouses.

Heh, I hate to break this to you folks at the AP, but this wasn’t unexpected if you’ve been watching the trends over the last couple of months it was foregone conclusion that the unemployment rate hold steady or decline.

Why? For starters lets take a look at Table A-12 in the Household Survey, the number of long term unemployed, that is those who have been unemployed for 27 weeks or longer, has been rising steadily for the last several months. For statistical reasons those people are no longer considered part of the workforce.

Second take a look at Table B-1 in the Establishment Survey, the total number of jobs in the marketplace has dropped sharply from roughly 133 million in January 2009 to an estimated 129 million in January 2010… In fact if we look at the historical data the drop is even sharper… From 137 million in January 2008.

Bottom line the decline in unemployment is the result of statistical manipulation not real job growth. In short if fewer jobs in the marketplace means you’re naturally going to have a lower percentage of those unemployed.

The number of newly laid-off workers filing initial claims for jobless benefits rose unexpectedly last week, evidence that layoffs are continuing and jobs remain scarce.

The rise is the fourth in the past five weeks. Most economists hoped that claims would resume a downward trend that was evident in the fall and early winter.

The Labor Department said Thursday that new claims for unemployment insurance rose by 8,000 to a seasonally adjusted 480,000. Wall Street economists had expected a drop to 460,000, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the third straight week to 468,750.

The figure is the highest in the past two months. Initial claims dropped sharply in late December, raising hopes among economists that layoffs were nearing an end and the economy would soon start generating net gains in jobs.

When you couple this report with yesterday’s news that planned layoffs have begun increasing again things don’t bode well for this so called recovery… Of course if tomorrow’s announcement from the Bureau of Labor Statistics about unemployment and job creation for January turns out to be bad news, the media will undoubtedly call it “unexpected”.

Related

• Stocks, Commodities Plunge, Dollar Gains on Debt, Jobs Concerns – Bloomberg.com
• House approves $1.9 trillion more debt – The Washington Times
• Companies boost productivity and put off hiring – Investors.com

Anyone who has read this blog for any period of time knows I’m a pessimist on the economy, in short I don’t see any reason to be hopeful:

Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.

In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce.

Still, many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don’t necessarily signal a big consumer pullback and could be a blip.

Right, retail sales fell 0.3 percent in December, overall sales for 2009 fell 6.2 the sharpest decline on government records going back to 1992.

On the jobs front, the Labor Department reports that new claims for unemployment insurance rose by 11,000 to a seasonally adjusted 444,000, sharply higher than the 3,000 new claims forecast by economists.

Add to that a record number of foreclosures:

A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.

The number of households that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.

In December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008.

Banks repossessed more than 92,000 homes, up 19 percent from November. That increase was likely due to lenders working to clear their books at the end of the year, RealtyTrac said.

And the looming dollar crisis:

The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.

“It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally,” said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.

President Barack Obama’s administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.

As a result, Obama is expected to focus on long-term fiscal discipline, while maintaining policy support for an economic recovery in the near-term as the country rebuilds after its worst recession since the Great Depression.

And you can understand why I’m pessimistic about the chances for a meaningful economic recovery anytime soon. I’m sure there’s reasons for optimism, but I can’t find them. Everything I seen is pointing towards 1970s style stagnation.