In the wake of the Christmas Day bombing, the Obama White House dispatched Homeland Security Secretary Janet Napolitano out to the networks to insist that “the system worked,” a claim that got roundly ridiculed and gave the administration a public-relations bloody nose. They apparently have learned little in the nine months since, as Obama sends Labor Secretary Hilda Solis to CNBC to insist that we’re having the best recovery in a generation, with a big assist from . No, really:
Solis says that the US economy has added 630,000 jobs since the beginning of the year, which is true, but is also a measure of economic impotence. The US workforce adds 100,000 or more working-age adults per month to the population, which means that adding an average of 80,000 workers a month is supply exceeding demand. We have to add at least 100K new jobs each month just to tread water in terms of the population.
Next, Solis tries explaining that the manufacturing sector is growing, but that’s more than a little misleading. Manufacturing grew in July by 36,000 jobs, but the sector itself dropped output the last two months reported by Commerce, 1.8% in May and 1.2% in June. With orders and sales dropping, the job recovery in manufacturing is at serious risk.
Solis offers a chart to show improvement, but both the Labor Secretary and CNBC fail to offer this chart from Calculated Risk that explodes the idea that this is the best recovery in a generation, at least in terms of job generation:
I suspect what they’re talking about is this chart of quarter-on-quarter GDP change, as produced by the New York Fed:
Does anyone spot the fallacy in this argument? They’re talking about the rate of change from quarter to quarter, which is a function of the size of the drop. Previous recoveries didn’t need to show as much expansion because the preceding drop wasn’t nearly as steep.
It’s all spin, and the argument that we’re having the best recovery evah! is particularly tone deaf when looking at the employment figures. The administration is about to Chip Diller itself out of a legislative majority.