Saturday, July 7, 2012

A Jobs Number That Obama Can't Spin

Every month, coincidental with the release of the Employment Report, the Bureau of Labor Statistics provides a single statistic that most economists believe to be the best indicator of the current and past employment situations.  That statistic is the Employment-to-Population ratio (EPR).  Simply speaking, it is the percentage of how many working age people -- ages 16 to 64 -- have jobs.  Unlike the workforce participation rate, it doesn't muddy up the water with people who are too young or too old  to be in the workforce; while still accounting for population growth.  And, for sure, its a better number than the highly manipulated unemployment rate and the number jobs that are supposedly added each month.

Prior to the recession, the EPR was above 63.   When Obama took office in January of 2009, the ratio was 60.6.  By the end of 2009, it had fallen to 58.2; with the ratio only bouncing back to 58.7 in both April and May of 2010.  But, since then, the ratio has never again reached 58.7.  When you look at the chart of the EPR over the last 10 years, you see a pronounced drop; beginning in 2007.  After finally bottoming out in late 2009, the "trend" has been almost straight-line sideways ever since.

No matter how many times Obama claims to have created 4.3 million jobs, the EPR tells a much different story.  Certainly, a much truer story.  And, that story is that Obama has done nothing in the last 3-1/2 years to improve the employment situation for the work-capable segment of our population. 

Finally, like every summer since 2007, I would expect the EPR to start falling again.  Certainly, Friday's lousy employment report only reinforced that belief.

Note: The month-by-month data and the chart can be found at:

No comments: