Job Growth Going in the Wrong Direction

For some time I’ve been suggesting that the unemployment rate is higher than what is announced by the Obama Administration. I had it pegged at closer to 20 percent when you factor in those who are under-employed or just stopped looking. Now a September Gallup Poll bears out my contention that the stimulus package has failed to create jobs, and unemployment is heading up, not down.

The Gallup Poll has found that unemployment is at 10.1% in September, and that underemployment is at 18.8%, up from 18.6% at the end of August. Gallup released data that shows unemployment stayed at more than 10 percent from January 2010 through the end of May of 2010. Then it leveled off at more than nine percent through July and August, heading to more than 10 percent in September.

Certain groups continue to fare worse than the national average. For example, 15.8% of Americans aged 18 to 29 and 13.9% of those with no college education were unemployed in September.

While underemployment usually slips below the radar screen, it is at a deplorable rate of 18.8% in September from 18.6% in August. In fact, underemployment did hit 20.4% in April and has yet to fall below 18.3% this year.

Private sector jobs continue to disappear.
A new ADP National Employment Report shows a decline of 39,000 private-sector jobs, and indicates that the government’s national unemployment rate in September will be in the 9.6% to 9.8% range. This is based on Gallup’s mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.

Don’t be fooled by government statistics.
Gallup, like many economists, believe that heading into the November election, the Obama administration will under-report job losses. They also fear that the sharp increase in the unemployment rate during late September does not bode well for the economy during the fourth quarter, or for holiday sales. They conclude: “In this regard, it is essential that the Federal Reserve and other policymakers not be misled by (government) jobs numbers. The jobs picture could be deteriorating more rapidly than the government’s job release suggests.”

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