Unemployment in US Decreasing, But …

Over the last month, the unemployment rate in the U.S. has decreased from 9 to 8.6 percent. Is this the end of the recession and hope for Barack Obama before the 2012 election? Not necessarily, because statistics are deceptive.

The Bureau of Labor Statistics announced yesterday that in November, 140,000 jobs were created in the American private sector, likely because of the shopping frenzy before Christmas. Sales after Thanksgiving on Nov. 24 broke all records. At the same time, 20,000 people working in the public sector lost their jobs last month, so the overall monthly balance amounts to 120,000 newly employed. In addition, statistics from September and October were revised, and it turns out that during those two months, 72,000 more new jobs were created than were previously reported. As an effect, the percentage of unemployed people, which for months has remained at the level of 9 percent or slightly higher, dropped to 8.6 percent. It was higher in March 2009 than it has been throughout nearly the entire presidency of Barack Obama.

This news was immediately announced on American TV stations and Internet portals, but economists warned against excessive optimism; when calculating the unemployment rate in America, only people who actively seek work are taken into account. As many as 315,000 Americans stopped looking for a job last month, as they lost hope that they will ever find one. Because of this, from the point of view of statisticians, they ceased to be unemployed. More than 2.5 million Americans are “heartbroken” (and not included in statistics) since almost half of the more than 13 million unemployed have not had a job for at least six months. This one indicator is the best measure of the crisis which has been troubling the U.S. for over three years. The number of chronically unemployed is relatively the highest since the Great Depression in the 1930s.

If you count the “heartbroken” and people working part-time, sometimes for just a few hours a week because they cannot find a full-time job, as unemployed, the American unemployment rate will amount to nearly 16 percent. According to some, this is the true measure of the labor market, not the rate which is adopted as a standard (currently 8.6 percent).

The average job search time is 41 weeks, which was, until recently, unthinkable in the U.S. There has always been some unemployment, but if somebody really wanted to work, they worked. Things are worst for black people, among whom the unemployment rate officially amounts to 16 percent, but really has reached 23 percent.

All this means, of course, that Obama’s chances for reelection are diminishing. On one hand, polls show that he is winning or is tied with the main Republican hopefuls, Mitt Romney and Newt Gingrich; but on the other, since World War II only one U.S. president has been reelected when the unemployment rate was above 6 percent. It was Ronald Reagan. However, even in his case, in the election year unemployment started to decrease and Americans regained hope. Despite November’s good statistics, for the time being nothing indicates that history will repeat itself next year. In September, the Bloomberg portal asked 51 economists to make forecasts — they stipulated that before the election, unemployment will not drop below 8.2 percent.

For the moment, Obama may count on only two lifelines.

Firstly, he may count on racial loyalty — over 90 percent of blacks voted for him in 2008, and more or less as many intend to support him in 2012. In a simulated poll by Pew Research Institute, Obama got 95 percent of black voters’ support, whereas Romney had only 3 percent.

Secondly, nearly all commentators say that the Republican candidates’ level is very low this time. Even the right-wing guru Charles Krauthammer wrote in yesterday’s Washington Post that Romney and Gingrich have many weaknesses, but Republicans have to do the best with what they have.