President Obama's Premature Victory Lap

Tyler Durden's picture

Submitted by Lance Roberts via RealInvestmentAdvice.com,

President Obama Creates 15M Jobs

In a recent op-ed by President Obama for the economist wrote that his team has created a “more durable, growing economy” with “15 million new private-sector jobs since early 2010.”

No. Not Really.

But, hey let’s give him, and the mainstream media that recirculated this overly-optimistic spin, an “A” for effort. The chart below shows the total number of jobs created by each President going back to Ronald Reagan. Since the President takes office on January 20th, I have calculated the job gains from February 1st through the end of their Presidency. (Importantly, President Bush only served one term following Reagan.)

employment-president-total-101116

“But, hey, he still created almost 11 million jobs. That’s good, right?”

But even this measure of job-creation is inaccurate for several reasons.

First, the President DOES NOT create jobs but hopefully fosters an economic environment that is beneficial for job growth. Given the onset of a massive number of additional regulations, the attack by the EPA on companies progress the Administrations “climate change agenda,” higher levels of taxation and higher health care costs due to the Affordable Care Act, it is actually surprising job growth has been as strong as it has. According to the NFIB, small businesses make up roughly 80% of all businesses that hire employees in the country. It is difficult for them to hire when their top three concerns are Government Regulations, Taxes and Labor Costs. (Note: When labor costs become a rising concern, as they are now, it has generally been a decent leading indicator of a recession.)

nfib-concern-composite-101116

Most likely, had the President not done anything, job growth would have actually been the same or better. This is simply due to the fact that employment increases are affected by increases in the working-age population. Which brings me to my second point. 

What is never discussed in the monthly job reports are the number of jobs created versus the growth in the working-age population of the country. This is an important and overlooked concept. If 1-million jobs are gained, but the working-age population gains 2-million, there is a deficit of sufficient job creation to keep up with those needing work. When comparing job creation to working-age population, a different story emerges.

employment-totpopchg-101116

With the exceptions of Presidents Reagan and Clinton, the working age population has significantly outpaced the level of actual job growth leaving a rising level of individuals unemployed.

Importantly, as opposed to the total labor force calculation, this measure includes ALL individuals available, and of age, to work. 

It is here that we find the problem with the employment reports. The problem shown above is most often explained away by a rather sweeping statement:

“The problem with the labor force is due to the large number of ‘baby boomers’ retiring.” 

As I discussed recently in “Don’t Blame Baby Boomers For Not Retiring,” that argument doesn’t fly.

“This divide is clearly seen in various data and survey statistics such as the recent survey from National Institute On Retirement Security which showed the typical working-age household has only $2500 in retirement account assets. Importantly, ‘baby boomers’ who are nearing retirement had an average of just $14,500 saved for their ‘golden years.’”

retirement-medianaccount-balances-092516

With 24% of “baby boomers” postponing retirement, due to an inability to retire, it is not surprising the employment level of individuals OVER the age of 65, as a percent of the working-age population 16 and over, has risen sharply in recent years.

employment-12mo-avg-65-over-092516

This should really come as no surprise as decreases in economic and personal income growth was offset by surges in household debt to sustain the standard of living. The reality is “baby boomers” are not retiring at a record clip. They simply can’t afford to.

 

If You’re Not Counted, Do You Not Count?

The most recent release from the Bureau of Labor Statistics on employment for the month of September was mostly disappointing with fewer jobs created than originally thought. But that begs the question of who is actually counted:

In order to be considered as unemployed by the BLS one must be:

  • Unemployed, obviously, AND;
  • Have ACTIVELY looked for work in the prior 4-weeks, AND;
  • Are currently available for work.

If you do not fit that criterion you are not counted in the “official” employment report known as the U-3 report. Today there are more than 94-million individuals that do not fit the criteria and are simply not counted.

This is where the employment measures get a lot more obscured. As stated, out of the total population of 254,091,000 working-age individuals (16 and over) more than 94-million are not counted as part of the labor force currently. In other words, 37% of the working-age population is excluded from the employment statistics.

However, even with the exclusion of 1/3 of those of working-age, the labor-force participation rate, the number of individuals employed versus those counted as part of the labor force is still hovering at the lowest levels since the 1970’s. 

employment-lfpr-101116

Importantly, there is also a stark difference between today and the 1980-90’s where the LFPR was rising versus a steady decline. Demographic trends, structural shifts in the employment makeup, and statistical measures all feed into this phenomenon and there is little data on the horizon which suggests this will change anytime soon.

If we really want to know how each President has fared in creating a better economic environment for average American’s, we should measure how they fared in improving the overall participation in the workforce. The chart below shows each President’s performance in the monthly net changes of the LFPR.

employment-netchg-lfpr-100916

This paints a very different picture about the success of job creation in the country post the last recession. This is particularly the case when:

  • 1 out of 5 households has NO ONE employed,
  • 1 out of 3 individuals are dependent on some sort of social support program, and;
  • Over 20% of personal incomes are comprised of government transfers.

But, despite all of the rhetoric, discussions, debates, excuses and finger-pointing in regards to the latest jobs report; there is only one chart of employment that truly matters: the number of full-time employees relative to the working age population. Full-time employment is what ultimately drives economic growth, pays wages that will support household formation, and fuels higher levels of government revenue from taxes.

Since this is a real measure of economic success, we can once again compare each President’s performance of the growth of full-time employment under their tenure.

employment-netchg-fulltime-wap-101116

The “good news” is that for those that are currently employed – job safety is high. Businesses are indeed hiring, but prefer to hire from the “currently employed” labor pool rather than the unemployed masses. More importantly, businesses are hiring only enough to keep up the incremental demand of population growth rather than expanding on the assumption of future growth.

This is the “new normal” of an economy where real economic prosperity remains elusive as the Federal Reserve’s interventions continue to create a wealth effect for market participants which, unfortunately, is only enjoyed by a small minority of the total population. For the other 80%, it remains a daily struggle to make ends meet.

 

More Deaths Than Births

But here is the real problem for President Obama’s victory lap. IF employment was indeed growing at the fastest pace since the 1990’s, then wage growth, and by extension, economic growth should be at much stronger levels as well. That has YET to be the case outside of mandated minimum wage increases.

However, if the economy was actually growing we should see an expansion of businesses created by entrepreneurs stepping out their own. As I have addressed previously, this has NOT been the case. 

Both the formation of firms and establishments, have dropped off precipitously since the financial crisis and remained low.

 

This is important because new businesses typically hire faster and produce higher levels of productivity than firms that have been around for a while. Thus the decline in business formation can explain some of the labor market’s post-recession problems, and is at least part of the reason for the steep drop in productivity.”

firms-birthdeath-analysis-bi

This decline in business formation is crucial to the issue of the employment reports. Part of the reporting problem, which has yet to corrected by the BLS, is the continued overstatement of jobs through the“Birth/Death Adjustment.” 

Employment-BirthDeath-Analysis-033116

“This chart CLEARLY shows that the number of “Births & Deaths” of businesses since the financial crisis have been on the decline. Yet, each month, when the market gets the jobs report, we see roughly 180,000 plus jobs.

 

Included in those reports is an ‘ADJUSTMENT’ by the BEA to account for the number of new businesses (jobs) that were “birthed” (created) during the reporting period. This number has generally ‘added’ jobs to the employment report each month.

 

The chart below shows the differential in employment gains since 2009 when removing the additions to the monthly employment number though the “Birth/Death” adjustment. Real employment gains would be roughly 5.26 million less if you actually accounted for the LOSS in jobs discussed in the first chart above.”

employment-birthdeath-adjusted-091816

Actually, I am being generous. The chart above just assumes NO births or deaths of businesses. However, given that we have been LOSING businesses since 2008, the differential is markedly worse. 

So, before President Obama takes his final victory lap with claims of creating the most robust employment recovery since the 1990’s, the data clearly suggests otherwise.

Of course, if you ask the 37% that are no longer counted as part of the labor force, they will tell you the same thing. 

Just some things I am thinking about.

 

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alexcojones's picture

Down into the Dustbin - or Sand trap of History, Asshole

JFK and Obama--Profiles in Courage and Cowardice
pods's picture

The only thing that will save Obama's legacy is that the next president is going to look worse than him once the FED runs out of gas.

The one who destroys the debt money circus will be looked at quite favorably, but I doubt there is one of those out there, as they might get hung for the misery that has to come when it collapses.

pods

nyse's picture

True Pods -- people cant connect the dots between the true cause and its associated effect bc it often comes in the next guy's term. What a complete and utter joke.

 

The info put out by the govt doesnt help with the confusion any (actually it does achieve thier goal, which is to confuse and hide the truth)

Son of Loki's picture

I just read this morning over 68,000 energy engineers fired in Houston area alone under Obama's oil bashing campaign.

That's so awesome!

Nobodys Home's picture

I also love what he did to the coal and lead industries!
Any politician of the top echelon that invests in the only cap and trade exchange and then puts the competition out of business must be one fart smeller!

larz's picture

Hey our jeenyus in cheif signed the paris accord

cheech_wizard's picture

I'm ready... I hereby revive the American Lobster Party!

Standard Disclaimer: I promise moar free drawn butter...

Nobodys Home's picture

Das Rayciss! I demands reparations fo makin my great great Grandaddy eat lobstah!

AllTimeWhys's picture

We should carve his face on Mt Rushmore for the sole purpose of stuffing his nostrils full of dynamite and blowing it right off the moment we're finished, i bet Teddy's face would crack up.

Tactical Joke's picture

"I reject your reality and substitute my own." - B. Sotero

Countrybunkererd's picture

as in "I created 15M jobs"... NO, the PEOPLE AND BUSINESSES CREATED THEM.  It is their debt, their sleepless nights, their life, and their ass on the line.  The .gov is a sucking vampire on all of that.  If the .gov was out of the way, healthcare wasn't what it is now, and etc.  the number would be much higher.

I would give Odumbass/Odipshit/Odirtbag/... credit if he would have removed the .gov.  But as it stands he is the Obunghole.

Nobodys Home's picture

Change we can hope for...or hope we can change on....or something. What did that guy what's his name say?
He got the Corbel Sleaze Prize right?

Withnail's picture

I'd like to see what it was without seasonal adjustments, courtesy of the BLS. 

http://banksterbubble.com/newsflash-from-the-december-jobs-report-the-us...

That link (on David Stockman's site as well) explains in detail that, in Dec. 2015, America created only 11,000 real jobs, but the BLS exaggerated it to 292,000.

Plus, because his Obamacare program hired plenty of people who are paid taxpayer salaries, he is spending over $3.00 to increase GDP by $1. Not smart, but by the time America figures that out he'll be out of office and enshrined in the media as an "enlightened liberal."

Plus, once Obamacare was implemented, so many employers couldn't afford it that they took full-time workers and changed their employment status so that they were working two part-time jobs instead of one full-time jobs. And neither of those part-time jobs offered enough hours to qualify for Obamacare. Is Obama the type of guy who takes a large egg, cuts the yolk in half and thinks he's created TWO large eggs?   

And when he demanded that employers provide for Obamacare by fiat, did he not realize that he can't just create additional sales for those businesses so they could afford it?  

And to think he said on TV that he'd like to be remembered for "avoiding another Great Depression." 

alexcojones's picture

     "Months, perhaps years, before his perplexing rise to power, mentors guided the young Barack Hussein Obama. Elderly politicians, mistakenly called 'statesmen,' corporate billionaires and CFR members groomed him on his conduct, his platform and the unwritten rules of governance, should he achieve high office. And Obama did not disappoint his backers, having done their bidding as soon as that highest office was achieved. Had he done otherwise, adhered to an ethical standard of behavior, his backers would have reminded the president elect how others had paid before him, in cold blood at the hand of a 'lone gunman,' for betraying them."

  - Written EIGHT years ago, weeks after the asshole was "Selected"

max_leering's picture

and he got the reminder phone call on 1/20/2009, while cruising down PA Ave - with the Wookie - that simply told Odumbo "nothing changes... got it?... NOTHING CHANGES!!!"

 

 

 and it hasn't

coast's picture

and while the MSM is spouting "pusygate"

one of the things that caught my attention this morning was that the US government’s debt level has soared to just a hair under $19.7 trillion.

To give it some context, that’s up over $120 billion in just six business days.

It’s almost as if Barack Obama is intentionally and desperately trying to breach the $20 trillion mark before he leaves office in January.

Of course, this hasn’t been reported anywhere because the media is too busy pretending to be shocked that Donald Trump is a womanizer.

And yet the debt is a much, much bigger story... though admittedly one that is far less entertaining.

The election is merely a fight over who gets to be the band conductor while the Titanic sinks. And the debt is precisely the reason for this.

Total US public debt has skyrocketed over the last eight years by $9 trillion, from $10.6 trillion to $19.7 trillion.

And in the 2016 fiscal year that just closed two weeks ago, the government added a whopping $1.4 trillion to the debt, the third highest amount on record.

Plus, they managed to accumulate that much debt at a time when they weren’t even really doing anything.

It’s not like the government spent the last year vanquishing ISIS or rebuilding US infrastructure. They just… squandered it.

True Blue's picture

For purposes of clarity, you should have added quotes to the words "public debt" -as it is not "public" -it is Government debt, incurred by people who deliberately keep secret what exactly they are doing with it. If there is no accountability to the "public" for the spending, then the debt isn't "public" either.

Make the Klinton Foundation et al pay it.

Seasmoke's picture

Mission Accomplished.

corporatewhore's picture

false consciousness--thinking you live in a Kardashian America with no regard to the absolute nothingness/bleakness of your economic and social reality.

This velcro and crazy glue economy is barely hanging on.   Lots of layoffs due to business just cratering here in flyover.

Money Counterfeiter's picture
Money Counterfeiter (not verified) Oct 13, 2016 4:46 PM

Obama was a distraction for the Federal Reserve theft of $4.4 trillion.  A stupid boy toy.

1980XLS's picture

Even the fantasy jobs were created out of thin air via debt.

NEGRO MAGIC.

$20T

Pop the Corks!

Nobodys Home's picture

You an angry white Newhampshireite aieght!

blue51's picture

Puppet Obama , was misspelled .

Yes We Can. But Lets Not.'s picture

Policy and performance do not produce immediate result.

Obama's legacy, including economic/prosperity, will have crystallized in a decade or two.

Bill and Hillary Clinton's legacy from 1990 on may be fully crystallized - perhaps hardened is a better term here - within a year.

sanjuandon's picture

the number of jobs created is flase....most if not all and then some of the "jobs" have been added via the Birth/Death adjustment.....created out of thin air by the bureaucrats adjustments for what they think is going on in the econmy.   when Trump is president they will unwind all of those adjustments but no one will care that they were bogus in the first place.   this country sucks becasue very few people truly care...they just keep reading the times and listening to democrat lies and they think everything is ok.   what a fucking joke.   

Mass_hysteria's picture
Mass_hysteria (not verified) Oct 13, 2016 4:59 PM

You know what, everything is hoax, a fraud, fake. All these government numbers.

 

"we created this and that many jobs"

 

and the numbers are always different

 

It's all a lie, im sick of it all, so sick. but im a beginner in the investing quadrant so i have a long way to go before I can get the f out of the system

Mass_hysteria's picture
Mass_hysteria (not verified) Oct 13, 2016 5:00 PM

"wages are up"

 

"growth"

 

"new jobs"

 

ALL A FUCKING LIE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!SICKOF IT!!!!!!!!!!!!!!!

gregga777's picture

Welcome to the Obamaization of America

The Real Brainard Bloodbath Beckons
by David Stockman • September 14, 2016

http://davidstockmanscontracorner.com/tuesday-was-a-warm-up-the-real-bra...

"There are 210 million American of working age between 18 and 68, implying about 420 billion potential labor hours per year. That’s based on the idea that every adult is potentially capable of contributing 2000 hours per year to society’s need for work and production. However, according to the bean-counters at the BLS, only 240 billion labor hours were actually supplied to the US economy in the most recent year."

"In fact, the resulting total of 180 billion hours of unmonetized potential labor implies the actual “unemployment rate” is 43%. So, yes, we do have some slack!"

John Williams' Shadow Government Statistics http://www.shadowstats.com says unemployment, as it was calculated before the United States of America's Feral Gangster Government defined away 37% of the workforce, is ~23%.

The Feral Gangster Government's Bozos of LYING Statistics says unemployment is less than 5%.

Hmmm. So. Whom should you believe?

A. The LYING scumbags at Goldman Sachs' Feral Reserve System?

B. The LYING PLOTUS (Pathological Liar Of The United States) Barack Hussein Obama?

C. The pathological LYING LIARy Rotten Clinton?

D. The LYING Feral Gangster Government?

E. The LYING BLS (US Feral Gangster Government Department of Liars Bureau of Lying Statistics)?

F. The Feral Gangster Government's LYING organs of state propaganda (mainstream media & entertainment oligopoly)?

G. None of the above?

Answer: G.

Rebel yell's picture

First, do no harm. It is time for Democrats to switch from the hypocritical oath which is causing them to vote for a candidate whose actions and past policies are in direct opposition to the entire platform of the DNC, to the Hippocratic oath! In the very least, first do no harm! In the very least, do not organize for the tyrant, Hillary! She is an oppressive,war mongering,authoritarian, corrupt, crony capitalist! Nothing good will come of her being elected! When you elect a psychpath, you wind up with psychopathic policies! That is a guarantee! America will suffer if Hillary is elected! We will go to world war 3! Vote for Jill Stein! She is the candidate whose policies are in alignment with a just society! Do not make America suffer because you are too stubborn to admit that that the DNC is a complete scam! If they were an honest and legitimate organization, they would have supported Bernie Sanders,not the tyrant that they did!
Resist the beginnings consider the end. The Germans 1933-1945 They Thought They Were Free:
http://www.press.uchicago.edu/Misc/Chicago/511928.html

zagzigga's picture

Yeah, she seems like a Republican in Democratic garb. I am apalled at seeing HRC as the party's candidate. Not that Obummer did any better - he is probably the worst wolf in sheep's clothing ever.

monad's picture

Let them eat cake.

Paging Dr. Guillotine. Guillotine? Guillotine?

Guillotine?

Nobodys Home's picture

I got some growth! Look at this....I'm the second cumming of LBJ! Them niggas gonna be votin democratic like fo the next 200 Ye!

OBAMA SHOWS OFF HIS ERECTION TO FEMALES = in da plane
http://www.liveleak.com/view?i=33b_1476311552

ajkreider's picture

This chart combines really good points with really silly ones.  A more interesting chart on jobs would look at the jobs numbers after a year in.  Both Reagan and Obama inherited recessions that were significant, and both would compare much better to Clinton on that count.  

SSA trust receipts will be about 25% higher this year than in 2008, which suggest robust job growth over that time.   The jump in the number of people of working age not working (unemployed plus those not in the labor force) is almost entirely do to people over 65.  This will continue.

zagzigga's picture

If Obummer had the decency to acknowledge the recovery as weak and that it had resulted in some undesirable consequences, then I wouldn't have any issues with him. But as I suspected right from 2008, he is all about seeking glory for himself. "How to soar high(by standing on the shoulders of others)" should be the title for his next book. 

south40_dreams's picture

In five years his legacy will be dead cops, illegal immigrants who went bad, race riots, Radical Islamic Terrorism and economic misery.

 

He's failed at everything except fucking things up

Crusader75's picture

NEW YORK (The Borowitz Report)—Republicans on Friday expressed bafflement that President Obama had garnered a record-high second-term approval rating despite having turned the United States into an economically devastated, crime-ridden hellhole.

Appearing on “Fox & Friends,” the Trump surrogate Rudolph Giuliani said he was “dumbfounded” by the disconnect between Obama’s high approval rating and the President’s near-total dismemberment of a formerly strong nation.

“This country used to be a wonderful place to live,” the former New York mayor said. “Today, all you see is a hellscape of smoldering ruins. Just read Zero Hedge.”

Giuliani blamed the mainstream media for not properly informing the American people about the destruction and havoc Obama has wrought since his first day in office.

“We have an unemployment rate of forty per cent and a murder rate of fifty per cent,” he said. “We are losing a million jobs a day to China and hundreds of thousands of Syrian refugees are swarming over our border with Mexico. Those are the facts.”

He also questioned the methodology used to determine the President’s approval rating. “These pollsters are just talking to people who are still alive,” he said. “They’re not talking to all of the people who have been killed.”

Having witnessed their President transform a once-great country into a dystopian nightmare unfit for human habitation, the American people’s decision to give Obama a record-high approval rating filled Giuliani with bewilderment. “Maybe they approve of the job he did founding ISIS,” he said.