Bad Unemployment Report Tangles Debt Deal

If the debt ceiling deal wasn’t complicated enough, Friday’s terrible unemployment report poured sand into the gears that ground negotiations to a halt. Nothing came out of Sunday’s meeting of Congressional leaders at the White House on resolving America’s debt crisis. Last week, the Bureau of Labor Statistics (BLS) said a paltry 18,000 jobs were created when many economists expected 4 or 5 times that amount.

The “official” unemployment rate jumped up to 9.2%. That was all that was needed to polarize the Republicans and Democrats even more than they already were. One side says it does not want to raise taxes, and the other side says it does not want to cut spending. Both say it’s because of the bad economy. All will agree America is in deep financial trouble.

What a difference a day makes as the mainstream media gets it wrong — again. The day before BLS released its dismal unemployment numbers, it was widely reported that payroll company ADP said that private sector employment increased by 157,000. Good news, but hardly a dramatic turnaround. The U.S. needs in the neighborhood of 300,000 jobs a month for nearly 10 years to clear the backlog of the unemployed and underemployed.

Yet, Reuters reported last Thursday, “With gasoline prices falling, automakers cranking up production and the decline in house values moderating, the dark clouds over the U.S. economy are starting to lift. The jump in private employment was the latest indication the economy was pulling out of its first-half slump, a view bolstered by better-than-expected June sales at retailers, but analysts still see only a modest recovery ahead.” (Click here to read the complete Reuters report.) How many times has the mainstream media gotten the “recovery” story wrong?

As I have been reporting for months, the economy is heading down, not up. Economist John Williams from Shadowstats.com said in his latest report government accounting gimmicks made the economy look better than reality. He says, “The weak data—now rattling the markets and consensus expectations—reflect some catch-up from the extremely poor quality of economic reporting in recent months. . . . The current intensification of the economic downturn is real, but the happier news of late-2010 simply was not as strong as earlier indicated.”

And as far as the “official” unemployment number of 9.2%–forget it because it is a big fat statistical lie. The number for the real unemployment rate for 2011 right now jumped to 22.7%! (if unemployment was done the way BLS did it before 1994.) Williams goes on to report the new number of people out of work is, “the highest level seen in the current, protracted economic downturn.”

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