For those who would see recovery in current economic data, there are these facts to ponder.
The first is that most of the decline in the unemployment rate has been a result not of more people working, but of more people leaving the labor force.
In November, unemployment went down to 7.7 from 7.9 percent in October, the lowest unemployment rate since late 2008. But at the same time unemployment declined, so did labor force participation--which fell to 63.6 in November from 63.8 percent in October. Half a million Americans have left the labor market in recent months.
Long term economic growth--and even growth in the short run--depends on an expanding labor force. Since January 2009, the labor force participation rate has declined by almost two percentage points.
That's three and a half million Americans who have given up looking for work. If the labor force participation rate were now at its January 2009 level, unemployment would be 10.7 percent. That's higher than unemployment was in 2009, when the recession was at its most severe.
Moreover, more than 70 percent of new civilian jobs created in the United States in recent months are in government. Since June, according to the Bureau of Labor Statistics, the economy has added about 847,000 jobs. About 621,000 of these are in local, state and federal government.
Economic growth in the long run cannot be sustained by a declining labor force participation rate and more government jobs. The current recovery is a fraud, a deceit. There remain about four million fewer private sector jobs in the economy than there were in 2008.
More Americans are worse off each month than the month before. The African American unemployment rate is 14.3 percent, up from 13.4 percent just a few months ago. The length of time that people remain unemployed is twice what is was in 2008. The number of Americans on food stamps continues its inexorable rise.
Concerning food stamps, the most recent monthly data show that 47.7 million Americans use them, close to one in six Americans. About 30 percent of children under eighteen in the United States are on food stamps. Use of food stamps has continued to grow in recent months, up 600,000 between August and September 2012. Since 2009, spending on food stamps has approximately doubled.
Real average hourly earnings are declining. These increased 1.7 percent nominally in the past year, but inflation was 2.2 percent. This means that, during this "recovery," real hourly earnings have declined about half a percent.
Typically, coming out of a recession--particularly a sharp recession--recovery and employment are booming and buoyantly expansionary. This is certainly not the case today. Though many economists believe the rate of economic growth has sped up in recent months, this is very misleading. Rather, more adults than ever are not working and the length of time they are not working has become longer. Meanwhile, government has added jobs while the use of social services is increasing and real earnings are declining.
This is not economic recovery. This is long term economic stagnation.
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