The economic recovery that isn't
(MoneyWatch) COMMENTARY According to the Federal Reserve the economy is doing much better. Its monthly survey of U.S. business conditions showed economic conditions improving in the past month and noted hiring was stable or increased in most of the country. Last week, the Labor Department said hiring slowed in March to half the pace from the previous three months.
Makes you wonder what country the Fed's board of governors are living in. It's not the same one as the rest of us, that's for sure. According to a Washington Post poll, nearly 70 percent of Americans still believe the nation is in a recession.
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It's interesting to note that the Fed's survey, which was released Wednesday, is based on anecdotal evidence and not statistics. These are supposed to be some of the top economists in the nation and they haven't figured out that the plural of anecdote is not data?
Here is some data to show that the "recovery" of the last two years exists in name only.
Start with the fact that even though hiring slowed in March and unemployment claims increased, the unemployment rate dropped to 8.2 percent for the month. Even if you take that number at face value, this is bad news. That's because the drop was caused by people leaving the work force, not getting jobs.
In March of this year, the Labor Department said there were 88.2 million people who were "not in the labor force." That's an increase of 2.3 million people from March of 2011. Were it not for people dropping out of the labor force, the unemployment rate would be well over 11 percent.
As Robert Oak writes: "The employment to population ratio is now 58.6 percent, finally ticking up one percentage point from last month, but still at record lows. You have to go back to the severe recession of 1983, October to find such low ratios."
According to the Job Openings and Labor Turnover Survey, in February there were 3.6 people available for every job opening. However, that only counts the number of people who are officially unemployed. If you include people marginally attached to the labor force, as well as those employed part time who want full-time work, that number rises to 6.73 people for every job.
Since the recession officially began in December 2007, the U.S. has lost 5.285 million jobs. Just to keep up with population growth the United States needs to create at least 9.94 million jobs.
You call that a recovery?
