With Obamacare coming down the pike, Congress still spending the nation into oblivion, and the IRS still unpunished for its illegal actions, one might think things couldn’t get worse.
You’d be wrong. The economy is still punishing Americans with unemployment, according to the Bureau of Labor Statistics’ report released this morning. The key results:
• The country added 169,000 jobs – barely enough to maintain itself, and not enough to actually gain.
• Fewer people are looking for work as compared to a year ago.
• The reports for June and July were adjusted downwards by 74,000 – meaning that many fewer people gained jobs compared to the estimates in prior months.
• Ed Morrissey notes “a half-million people…disappeared out of the labor force in a month.” This means people stopped looking for work.
• The number of people looking for work is at a 35-year low, according to CNBC.
For the last four years, the nation has seen reports like this one. The official unemployment rate drops – as it did in August – but nothing else seems to go well. Yet we’ve officially been out of the recession since June 2009, the point at which two straight quarters did not see the economy shrink.
What’s the deal?
The answer is found in CNBC’s article:
Despite the miss, markets reacted positively to the report as stock market futures rose and interest rates dropped, while the U.S. dollar lost ground against most of the world’s currencies.
Some surmised that the number was good enough to show economic expansion but just tepid enough to keep any Fed stimulus removal tepid.
“We have no reason to expect something different from the (Fed) announcement on the 18th,” said Liz Ann Sonders, chief market strategist at Charles Schwab.
The Fed is buying $85 billion a month in Treasuries and mortgage-backed securities, but the tapering talk has pushed interest rate independent of the Fed’s wishes.
Translation: The Federal Reserve is buying the vast majority of Treasury bonds and mortgage-backed securities each month. Investors who would otherwise jump into these areas are then forced to shift their money to the only area left – the stock market.
The Fed has said it will continue on this course of action (known as “quantitative easing”) until the economy improves. Before the 2007 recession, the Federal Reserve propped up the fake boom of the Bush years with artificially low interest rates. Now, the Fed is propping up the fake recovery of the Obama years by pouring billions into treasuries.
But, hey, Big Businesses in the stock market are doing well, so who cares about a few million average Americans who can’t find work?