Suitably Flip

Unemployment at 5.5%, AP at Cloud 9

Finally, a story about the economy that the Associated Press doesn't need to spin and distort in order to render it bad news.

(The did anyway, of course, just for the extra gloom factor.)

The nation's unemployment rate jumped to 5.5 percent in May -- the biggest monthly rise since 1986 -- as nervous employers cut 49,000 jobs.

The latest snapshot of business conditions showed a deeply troubled economy, with dwindling job opportunities in a time of continuing hardship in the housing, credit and financial sectors.
...
That was the biggest one-month jump in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.

The April-May rise in unemployment (from 5.0% to 5.5%) was indeed the largest jump since February 1986.  But payrolls only decreased by 50,000, meaning most of the 0.5% increase was due to people entering the labor force (disproportionately those between the ages of 16-24) and looking for work, not people getting laid off.  The story also leaves out the fact that, at 5.5%, we're still below the average unemployment rate over 22 years since 1986.

That's not very convincing evidence of a "deeply troubled economy."

The shocking statistic "highest since October 2004" is also presented as though it signaled some kind of aberration.  What they don't mention is the fact that unemployment remained at 5.5% or above for nearly 3 years just before October 2004, all while the U.S. economy was mounting a tremendous economy recovery, characterized by accelerating economic growth, and which kicked off a 26-quarter (and counting) run of unbroken economic expansion.

The employment report was surprisingly weak.  That's true.  But we can keep the violins in their cases for the time being, as the U.S. economy is clearly not in "deeply troubled" state.  Convinced otherwise, the AP goes ahead and makes the inevitable logical leap on your behalf.

The country's economic problems are a top concern for voters -- and thus for President Bush, lawmakers on Capitol Hill and those vying to win the White House this fall.

You want to see deeply troubled, look no further than the U.S. economy under Jimmy Carter (hereafter, the "Protobama").  In not one of Carter's 48 months in office did the unemployment rate fall as low as 5.5%.  Meanwhile, inflation averaged 10.3% (the man knew his malaise), worlds apart from the current rate of 2.4%.

Disappointing news?  Yes.  Economic Armaggedon?  Meh.

Update:  Ed Morrissey makes an excellent point, vis a vis the 18-24 year-olds entering the labor force and finding fewer jobs.

Why have these new job seekers found it difficult to get jobs? One reason is that Congress made jobs costlier just in time for this economic slowdown. Congress raised the minimum wage last year by seventy cents an hour, from $5.15 to $5.85. It will rise again in July to $6.55 an hour, and next year will hit $7.25 per hour. That makes entry-level labor as much as 27% more expensive this summer, when consumers have already slowed down their spending. The natural loss of work from the slowdown amplifies the effect of the minimum-wage increase, because businesses now cannot afford to raise prices to maintain their entry-level positions.

Comments

Unemployment at 5.5%, AP at Cloud 9

Finally, a story about the economy that the Associated Press doesn't need to spin and distort in order to render it bad news.

(The did anyway, of course, just for the extra gloom factor.)

The nation's unemployment rate jumped to 5.5 percent in May -- the biggest monthly rise since 1986 -- as nervous employers cut 49,000 jobs.

The latest snapshot of business conditions showed a deeply troubled economy, with dwindling job opportunities in a time of continuing hardship in the housing, credit and financial sectors.
...
That was the biggest one-month jump in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.

The April-May rise in unemployment (from 5.0% to 5.5%) was indeed the largest jump since February 1986.  But payrolls only decreased by 50,000, meaning most of the 0.5% increase was due to people entering the labor force (disproportionately those between the ages of 16-24) and looking for work, not people getting laid off.  The story also leaves out the fact that, at 5.5%, we're still below the average unemployment rate over 22 years since 1986.

That's not very convincing evidence of a "deeply troubled economy."

The shocking statistic "highest since October 2004" is also presented as though it signaled some kind of aberration.  What they don't mention is the fact that unemployment remained at 5.5% or above for nearly 3 years just before October 2004, all while the U.S. economy was mounting a tremendous economy recovery, characterized by accelerating economic growth, and which kicked off a 26-quarter (and counting) run of unbroken economic expansion.

The employment report was surprisingly weak.  That's true.  But we can keep the violins in their cases for the time being, as the U.S. economy is clearly not in "deeply troubled" state.  Convinced otherwise, the AP goes ahead and makes the inevitable logical leap on your behalf.

The country's economic problems are a top concern for voters -- and thus for President Bush, lawmakers on Capitol Hill and those vying to win the White House this fall.

You want to see deeply troubled, look no further than the U.S. economy under Jimmy Carter (hereafter, the "Protobama").  In not one of Carter's 48 months in office did the unemployment rate fall as low as 5.5%.  Meanwhile, inflation averaged 10.3% (the man knew his malaise), worlds apart from the current rate of 2.4%.

Disappointing news?  Yes.  Economic Armaggedon?  Meh.

Update:  Ed Morrissey makes an excellent point, vis a vis the 18-24 year-olds entering the labor force and finding fewer jobs.

Why have these new job seekers found it difficult to get jobs? One reason is that Congress made jobs costlier just in time for this economic slowdown. Congress raised the minimum wage last year by seventy cents an hour, from $5.15 to $5.85. It will rise again in July to $6.55 an hour, and next year will hit $7.25 per hour. That makes entry-level labor as much as 27% more expensive this summer, when consumers have already slowed down their spending. The natural loss of work from the slowdown amplifies the effect of the minimum-wage increase, because businesses now cannot afford to raise prices to maintain their entry-level positions.