Jobless rate shoots to 8.9%

posted at 10:04 am on May 8, 2009 by Ed Morrissey

The economic indicator that hits closest to home lurched farther into negative territory, according to the Labor Department.  They announced that unemployment has now hit a 26-year high of 8.9%, extending a streak of record-busting reports over the last six months.  The BLS tried mitigating the news by showing a decrease in joblessness claims, but that’s because of one particular employer:

U.S. employers cut 539,000 jobs in April, the fewest since October, according to government data on Friday that signaled the economy’s steep decline may be easing.

However, the Labor Department said the unemployment rate soared to 8.9 percent, the highest since September 1983, from 8.5 percent in March. Payrolls figures for March and February were revised to show job losses were 66,000 more than previously reported.

The administration will hammer on that 539,000 number in order to show progress, but that’s deceptive.  The loss in private-sector employment actually came to 611,000, more than the 590,000 jobs anaylsts expected.  How did they get to 539,000?

Losses in April were tempered by a big 72,000 jump in government payrolls and overall, private sector employment fell by 611,000 last month.

Governments used stimulus money to hire workers in April.  Most of those jobs are on “shovel-ready projects,” and won’t be permanent employment, while the rest will expand bureaucracies needed to manage those jobs.  More to the point, all of those jobs cost American taxpayers, including the unemployed, to maintain.  That doesn’t create wealth and opportunity as much as it sucks both out of the market, and allow politicians to claim credit for growth that doesn’t exist.

We’re remaking the WPA, not reducing unemployment.  Since government is the least efficient way to transfer resources to people and projects, we’re going about this in a manner guaranteed to prolong the agony rather than end it, just as FDR did during the Great Depression.  We need capital to flow back into the market rather than into the Beltway, and we need to build investor confidence rather than threaten them with “madman theories of the presidency.”

Update: I’m hearing that 66,000 of the 72,000 government jobs were temporary positions with the Census Bureau.  If anyone has a cite for that, shoot it over to me.

Update II: HA commenters come through with several cites on the Census jobs.  I’ll go with the CBS Marketwatch link, for an argument-against-interests cite:

Government added 72,000 jobs, mostly temporary census jobs. State and local governments added 6,000 jobs, despite widespread accounts of layoffs.

Prosperity through beancounting!


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Comments

ernesto on May 8, 2009 at 11:02 AM

Hee. I was on very good terms with a ‘cougar’ in my English class…that’s not a bad idea at all!

Dark-Star on May 8, 2009 at 11:23 AM

Kensington on May 8, 2009 at 10:08 AM

Join the crowd. Everyone’s fleeing NY. Just don’t vote for a democrat if you leave. If you vote D; stay in NY. Please.

lorien1973 on May 8, 2009 at 11:24 AM

Kensington on May 8, 2009 at 10:08 AM

What field? Maybe you could get some adjuncting gig at CUNY.

ernesto on May 8, 2009 at 11:24 AM

Join the crowd. Everyone’s fleeing NY. Just don’t vote for a democrat if you leave. If you vote D; stay in NY. Please.

lorien1973 on May 8, 2009 at 11:24 AM

Flee upstate, but NYC’s the greatest place in history. I couldn’t imagine fleeing. where would someone who really loves NYC go?

ernesto on May 8, 2009 at 11:26 AM

Thanks Ed for covering this. It seems the MSM can’t correlate that the reason that there is a lower loss in jobs is because of the rise of govt. jobs. Now I’m wondering if they’ll put it together that working temp Census Bureau jobs does not increase GDP nor will it increase the economy beyond a few months of a minor boost…

Tuari on May 8, 2009 at 11:27 AM

Several months ago the interest rates fell toward zero. That alone normally triggers a strong boom. we of course saw the Dems start tamepring with banks and pressureing Bush to get involved with banks so banks set the brakes. Now we have obama who tells us no collaterilized loan contracts are enforcible unless his people say they are, we have building stopped.

Fuel price bubble broke after last summer, That will boost cars and trucks but we faced obama who declared punishment to those that wanted decent autos.

The export of money for oil was reduced by 1 trillion dollars. That is money that is not spent here but Obama policies interfere with the impact of that 1 trillion dollar boost.

seven on May 8, 2009 at 11:28 AM

Flee upstate, but NYC’s the greatest place in history. I couldn’t imagine fleeing. where would someone who really loves NYC go?

ernesto on May 8, 2009 at 11:26 AM

Here?

Upstater85 on May 8, 2009 at 11:30 AM

Here?

Upstater85 on May 8, 2009 at 11:30 AM

As many friends as ive got in valhalla right now, id rather not join them thank you very much :-)

ernesto on May 8, 2009 at 11:32 AM

People hoping for jobs. That’s the change!

jencab on May 8, 2009 at 11:34 AM

NYT says “pace of loss is easing”. MSNBC says “the totals of jobs lost beats expectations”. They are all a bunch of sick, twisted *****.

LibTired on May 8, 2009 at 10:21 AM

Hell, the closer it gets to 100% the slower the pace will be. The pace of loss doesn’t mean jack to those who are out of work. It is only balm for the blind followers of ‘Him’

oldernwiser on May 8, 2009 at 11:34 AM

Well I guess you could always join a “cult” to run away from your problems…
Oh wait….

izoneguy on May 8, 2009 at 11:36 AM

I HAVE A SOLUTION!!!:

1) Obama hires EVERYONE for a Census job

2) Unemployment goes to 0%

3) The Census wouldn’t need to occur b/c everyone is already accounted for on the payroll.

4) We get a paycheck from the government (which was our money in the first place)

5) Everyone gets government health care in the benefit plan

This can all be done by next month when May’s employment numbers are released.
Obama then can breath more easily and spend more time eating burgers and working on his pecs.

Thoughts?

LordMaximus on May 8, 2009 at 11:39 AM

Thoughts?

LordMaximus on May 8, 2009 at 11:39 AM

I also have an idea. Obama steps down.

Upstater85 on May 8, 2009 at 11:39 AM

Here’s a graph for the trolls – who will not enter one of these threads.

This graph should be in front of every republican if they get on a news program.

lorien1973 on May 8, 2009 at 11:49 AM

Tuari on May 8, 2009 at 11:27 AM

actually they’re quite capable of getting into the details, but doing so will not paint a prettier picture for their favorite person.

gsherin on May 8, 2009 at 11:49 AM

oldernwiser on May 8, 2009 at 11:34 AM

I guarantee you, that if unemployment goes from 12% to 11.9%, you will not hear stories about “jobless recovery” or the drop “just means that people are giving up” as they did with Bush.

lorien1973 on May 8, 2009 at 11:52 AM

gsherin on May 8, 2009 at 11:49 AM

And that’s why, after this little “bump” of improvement in a few sectors, and after the credit card bubble, from the unemployed not being able to make payments, and the commercial retail sector, hurt by the lack of sales, both hit… we’re essentially screwed and we blew our cash wad already. China isn’t lending, sure we can print more, but when inflation hits massive proportions, what happens then? 0 and his administration, both parties, Congress, they can’t see the big picture here and we’re going to get seriously hurt because of it. I WISH we had Carter now instead of this…

Tuari on May 8, 2009 at 11:55 AM

The Good News Media is framing all the headlines to be that the “rate” is headed in the right direction. NYT says “pace of loss is easing”. MSNBC says “the totals of jobs lost beats expectations”. They are all a bunch of sick, twisted *****.

LibTired on May 8, 2009 at 10:21 AM

SECOND LOOK AT THE SECOND DERIVATIVE!

DrSteve on May 8, 2009 at 12:00 PM

lorien1973 on May 8, 2009 at 11:52 AM

Too true.
when peoples benefits start to run out, those numbers (people collecting) will fall and we will hear another stanza of how wonderful life is under ‘Him’

oldernwiser on May 8, 2009 at 12:02 PM

lorien1973 on May 8, 2009 at 11:49 AM

It would help more if the republicans had a graph that had accurate estimates. That would speak alot louder than “see, dems are wrong”. That alone hasn’t really cut it, even though the democrats have been wrong often.

ernesto on May 8, 2009 at 12:02 PM

lorien1973 on May 8, 2009 at 11:52 AM

that and the media somehow find like 1 or 2 people that claim they’re Republicans and just can’t believe how awesome Obama is and how his policies are great and how they don’t like how Republicans are running ads against him.

gsherin on May 8, 2009 at 12:02 PM

Tuari on May 8, 2009 at 11:55 AM

yep, this guy is a unbelievably clueless and seems to think adding more government burdens somehow helps.

I keep giving people the example of Pepsi or Coke is they have a bottling plant in Germany or China and how stupid it is that they would have to pay more taxes on money they earn over there selling to their customers over there.

gsherin on May 8, 2009 at 12:05 PM

ernesto on May 8, 2009 at 12:02 PM

Given that the republicans dont stand for anything, saying the democrats are wrong is all they got.

lorien1973 on May 8, 2009 at 12:07 PM

Only in Obamaland is a loss of 540,000 good news, never mind that they see the rate going to 10%, but it will be higher. We will lose another 1.5 to 2 million jobs, that puts it at around 12%

WoosterOh on May 8, 2009 at 12:12 PM

Given that the republicans dont stand for anything, saying the democrats are wrong is all they got.

lorien1973 on May 8, 2009 at 12:07 PM

Ding!

Some of the Republican leadership seems to be getting their act together, but their message delivery still stucks a$$.

BadgerHawk on May 8, 2009 at 12:14 PM

Yeah, I’m expecting it’ll top out at 11 or 12%. Just from what I’m seeing in my business; I’m up to 5 vendors who have gone out of business, I suspect a 6th will be soon. Vendors who are in business are ordering nothing or next to nothing.

If they don’t start doing so in about 2 months, they expect Christmas to be just awful. And if christmas is awful, 2010 is going to be epically bad.

lorien1973 on May 8, 2009 at 12:15 PM

Prosperity through beancounting!

Our new flag: United Banana Republic of America

What else is cooking?

In addition the “birth-death adjustment” was +226,000, close to double the previous month. That’s the computer model that “estimates” the number of jobs that are created in the economy but unreported.

February was revised down from -651k to -681k (-30,000) and March was revised from -663k to -699k (-36,000). See a pattern there? That’s 66,000 jobs that were reported as existing but revised out later.

Rae on May 8, 2009 at 12:18 PM

lorien1973 on May 8, 2009 at 11:49 AM

Wow great graph. Thank you. Hey do you have source information on the numbers used to compile?

elduende on May 8, 2009 at 12:19 PM

elduende on May 8, 2009 at 12:19 PM

Ace’s site has it. The graph is from Obama’s recovery.org. The dark line is unemployment if the porkulus passed; the light line is if it didn’t pass.

lorien1973 on May 8, 2009 at 12:28 PM

If you want to look into the future, look to Michigan. What obama is proposing is what Granholm has been doing for over 8 years now. Unemployment in my county (Lenawee) is 15% (Detroit 22%/Muskeegon 23%). This doesn’t factor in those still collecting unemployement in our Union run state (another 4-5%) or those 28,000 that move out of Michigan every Month that have lost jobs but no longer count! Or displaced workers that used to make 60k a year and now make $9.00 an hour. Go to Taco Bell in Michigan and everyone working there is over 30 years old. There are no rush hours in South Eastern Michigan anymore. My 1hour and 20 minute commute in 1998 is now a 45 minute drive. Most of you know it will be bad, but I’m telling you..you have no idea how bad this is going to get until you look at Michigan. Obama is nationalizing our big government/anti-freemarket/union run economy.

MichiganMatt on May 8, 2009 at 12:42 PM

Over 15% of Americans are under-employed.

Add that to the mix.

Those 15% under-employed Americans are proving that Americans WOULD AND WILL do those low paying jobs that progressives swore Americans wouldn’t do. What the progressives meant is that progressives draw the line as to what THEY won’t do, rather sponging off others than roll up the sleeves and dig in, rather importing illegal aliens to the workforce or legal green card skilled workers to the workforce than allow Americans employment.

maverick muse on May 8, 2009 at 12:57 PM

DRILL HERE. DRILL NOW.

maverick muse on May 8, 2009 at 12:59 PM

Gee, that’s funny.

My Verizon wireless news headline yesterday was that jobless claims “dramatically decline(d)”.

I see now whom they sleep with.

madmonkphotog on May 8, 2009 at 1:01 PM

Maybe I’ll sell myself to cougars.

I’ve been out of work for 6 months. Desperate times call for awesome measures

blatantblue on May 8, 2009 at 10:51 AM

+1

Do it. :)

bluelightbrigade on May 8, 2009 at 1:20 PM

Hundreds of thousands…Is that normal?

JetBoy on May 8, 2009 at 10:22 AM

Actually, it probably is.

In 1988 (as a teenager), I worked as a Census pre-canvasser for the ’90 Census. In rural areas, Census employees have to drive every road in a county, update maps, and verify (in person, with the occupant) the mailing address for each property, and map that address on a map. Addresses needed to be verified before Census forms could be mailed, to cut down on any possible fraud using fake addresses. There were at least a dozen of us for our county.

I racked up quite a few miles on my car (they paid standard mileage rates). It wasn’t bad work, but painstakingly long. Although I did learn all the back roads in my county and how to back really well out of driveways… especially the long winding gravel ones…

dominigan on May 8, 2009 at 1:22 PM

Governments used stimulus money to hire workers in April. Most of those jobs are on “shovel-ready projects,” and won’t be permanent employment…

Wanna bet? When has the Federal government ever cut its own employment? Seriously. Ever?

Paul_in_NJ on May 8, 2009 at 1:33 PM

Seriously – thousands of jobs with the Census Bureau are temporary.

corona on May 8, 2009 at 1:35 PM

The administration didn’t want to release a number equal to, or exceeding … NINE percent.

So they went with the old capitalist’s retailer’s trick of saying it’s 8.9%

What a bunch of idiots. They think we are stupid.

HondaV65 on May 8, 2009 at 1:38 PM

I haven’t read all the comments, so I don’t know if anyone has mentioned that in addition to the temporary census workers, the unemployment figure includes a birth/death adjustment of +226,000 jobs based on computer models, which was DOUBLE the B/D adjustment used last month. They added 100,000 more fake jobs this month than last month just to make it look good. The Birth/Death adjustment scam was dreamed up by the Clinton crew as a way to improve their stats. Don’t believe those telling you this report was good news. And just wait until GM is shuttered for weeks this summer. What will that do to their supplies? The ripples through the economy could turn into tidal waves.

Botton line: the 8.9% figure is an extrememly cooked number. Also, keep in mind that both February and March were revised down by 30,000 and 36,000 respectively. Expect the final April numbers to be revised downward as well.

Final thought, U-6 is a better guide than U-3 anyway. U-6 unemployment stands at 15.8%. A guy with a $500k mortgage who lost his job in middle management who has settled for part-time work in the paint department at Home Depot isn’t considered unemployed, yet he’s burning through his savings and won’t be able to keep up his mortgage for long. There are many people in that situation.

flyfisher on May 8, 2009 at 1:46 PM

HondaV65 on May 8, 2009 at 1:38 PM

You got it. As I said in my post above, just wait for the revisions. The final April unemployment will end up greater than 9%, and that’s with their phony Birth/Death adjustments.

flyfisher on May 8, 2009 at 1:48 PM

Here’s how MSN is reporting the same story (their link title):

Job losses slow more than expected

capitalist piglet on May 8, 2009 at 2:13 PM

Highway crews are also starting to go to work, it is spring. That should help some with these numbers.

Terrye on May 8, 2009 at 6:52 PM

The problem is that they suffer under the delusion that all of this is caused by the government not spending enough. Just look at Paul Krugman: the guy is stuck on a mental feedback loop where the failure of spending to stimulate the economy means more spending must be done.

Count to 10 on May 8, 2009 at 11:03 AM

I may have heard that argument before. All the money we throw at education is not working so we better throw more money at it. Pakistan is failing lets throw more money at them. etc.

cobrakai99 on May 8, 2009 at 8:46 PM

You got it. As I said in my post above, just wait for the revisions. The final April unemployment will end up greater than 9%, and that’s with their phony Birth/Death adjustments.

flyfisher on May 8, 2009 at 1:48 PM

I’m SHOCKED, SHOCKED to hear that Obama would release phony birth information!

Dr. Charles G. Waugh on May 8, 2009 at 11:52 PM