When I saw CNN's Candy Crowley on Sunday tease an upcoming State of the Union segment saying she'd be discussing Friday's unemployment report after a commercial break, I was hoping to see a complete analysis of the data provided by the Bureau of Labor Statistics.
Much to my shock and dismay, although she and her guests discussed the economy and the jobs market for eight minutes over two segments, there was not one single word said about the declining participation rate or the record 1.2 million one month increase in the number of people not in the labor force (video follows with transcript and commentary):
CANDY CROWLEY, HOST: Here to make sense of some big economic figures: Alice Rivlin, who served as director of the Office of Management and Budget in the Clinton administration; Douglas Holtz-Eakin, who was chief economist for President George W. Bush's Council of Economic Advisers; and our Ron Brownstein, a senior political analyst with us here at CNN.
I'm completely confused by this week, because Friday it's like the best unemployment figures we've seen in three years, and the Dow Industrials go crazy, and the CBO earlier in the week said, you know, the debt outlook is horrible, the deficit is horrible, and by the way unemployment is going back up.
So are we happy or are we worried?
ALICE RIVLIN, FORMER OMB DIRECTOR UNDER BILL CLINTON: I think it was basically a good news week. The unemployment figures and the new jobs in the Friday report were good news. They aren't definitive. That was one month, but it was a good, strong month, an indication that the economy is taking hold.
If it lasts, we'll have the best thing that anybody is able to predict is a good, slow recovery with gradual reduction in the unemployment rate from what is admittedly a very high level.
CROWLEY: But the CBO said 9.3 or something next year, which is craziness.
DOUGLAS HOLTZ-EAKIN, FORMER CHIEF ECONOMIST, GEORGE W. BUSH COUNCIL OF ECONOMIC ADVISERS: Right. Remember, the CBO is -- its job is to find the dark cloud for every silver lining, and so it did that. But the reason it did that, all kidding aside, is that the CBO has to assume that the Bush tax cuts sunset.
That means it has to assume an enormous tax increase next year, and that means it has to assume that we have bad economic growth. And that gets you high unemployment.
So strip that out, I think we got one month's good news in the labor market, that's great, but the truth is the debt is bad and the recovery is not very strong, and we have a long way to go.
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Right. Because there has been more than one good month. I mean, there has been several months of good unemployment news and overall job growth, private sector job growth in 2011 was 2.1 million, which was the best since I think '05.
So there's a general trajectory that is more positive. But trajectory is the key, I think, politically. You know, and I think almost all political strategists agree that kind of direction matters more than level. If it continues to improve, that's obviously good news for the president.
If the CBO is right and we see a turnaround toward the end of the year, with it going back up, that would be more problematic. Although I would point out that most political scientists believe we are in the key period now that the second quarter of the election year is when voters really take that snapshot and it is positive for the president that he is seeing improvement at this moment.
HOLTZ-EAKIN: I would never disagree with a political expert. But a couple of things, unemployment will go up before it comes down in a permanent way. There are a lot of discouraged workers out there, 3 million, 4 million...
CROWLEY: They will come back in.
HOLTZ-EAKIN: ... when they come back, it will go up...
CROWLEY: .. and they will drive up the unemployment numbers.
HOLTZ-EAKIN: ... and that will be confusing to people. Good news will be bad news. And on the ground it's not going to feel that great. Right now the numbers look better, that's fine, but until we see steady job growth that's even this rapid or more, and employment increases that are matched by wage increases, you're not going to see the incomes for people to feel good.
So if we start -- if there is happy talk in Washington when it's not that great on the ground, that's a bad story.
CROWLEY: Well, you know, there's a huge disconnect then.
RIVLIN: Nobody is doing happy talk, not even the president. But we have to ...
CROWLEY: Said the economy was stronger.
RIVLIN: We have to recognize that the economy is stronger, that's what he said, and it has shown that it's stronger for the last several months. And the CBO was actually not making a new forecast. It was telling us what we already know.
If you raise taxes drastically at the end of the year, letting the Bush tax cuts all expire, and if you cut spending drastically next year with the sequester, then it's not good news for the economy. But nobody wants that to happen.
HOLTZ-EAKIN: Right, that's the...
(CROSSTALK)
BROWNSTEIN: Well, that is not really on the table. The debate will be about at the end of the year whether to extend the Bush tax cuts for the top 2 percent. They have to assume that they sunset for the entire population, which really neither side is talking about, is a very unlikely outcome, although conceivable in stalemate. CROWLEY: Well, in fact, the CBO said, listen, it will reduce economic stability and it will increase unemployment if you let those tax cuts expire.
HOLTZ-EAKIN: It's an extraordinarily bad idea. And there's -- the thinking...
(CROSSTALK)
HOLTZ-EAKIN: But it's across the board, for rich -- it's supposed to be the biggest political risk we face, which is post- election, regardless of who wins, we have a lame duck, they're never very organized, they look like a rugby scrum at best, suddenly we've got the sequester and the Bush tax cuts on the table, that's a big risky moment for the economy.
CROWLEY: Let me ask you all to hold fire, because we're going to come back. But up next, more with our economic roundtable
After a commercial break, the four continued to discuss the economy as well as the unemployment numbers without mentioning the dismal participation rate or the record 1.2 million one month increase in the number of people not in the labor force.
Frankly, this was almost unconscionable. Yes, the headline figures - meaning the unemployment rate and the non-farm payroll data - were very strong.
However, our friends at Zero Hedge did some fine reporting on Friday's report digging up the inconvenient truths that most media outlets and CNN in this instance chose to ignore.
For instance:
1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million.
As ZH noted, this caused the labor force participation rate to plummet to 63.7 percent, a 30 year low:
Through eight minutes Sunday, there was not one word about either of these key employment statistics.
Something else Crowley and her guests ignored was the quality of the jobs created in January. As ZH observed:
In January, the number of Part Time workers rose by 699K, the most ever, from 27,040K to 27,739K, the third highest number in the history of this series. How about Full time jobs? They went from 113,765 to 113,845. An 80K increase. So the epic January number of 141.6 million employed, which rose by 847K at the headline level: only about 10 % of that was full time jobs
So the Household survey, which is the one that is used to determine the unemployment rate, found that 90 percent of January's increase in workers were part-time jobs.
You think the media would have pointed out any of these immutable facts if Barack Obama were a Republican seeking reelection?
Yes, that's a rhetorical question.
As a sidebar, if you're not following Zero Hedge for economic and financial data as well as commentary this election season, you likely don't know the whole truth.
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