Jack Welch and headline writers across the country fixated on the wrong number when dealing with unemployment.
The economy with all of the Ben Bernanke-led Fed stimulus and QEs only created 114,000 jobs in September, down from months prior. That’s the real number. The real, currently undisputed jobs-added numbers over the last three months read something like this: July, 181,000; Aug., 142,000; Sept., 114,000.
Do you see a trend? That’s the real problem.
So when ex-GE CEO Welch tweeted: “Unbelievable jobs numbers. These Chicago guys will do anything. Can’t debate so change numbers,” in referencing the Sept unemployment rate drop from 8.1 percent to 7.8 percent, he fell into a trap.
It’s not about the unemployment “rate”; it’s really about the raw numbers. The rate is an amateur economist’s number, one used by partisan political hacks, with or without an economics degree. Or, as I like to call them, “eco-ticians.”
Anyone foolish enough to celebrate a 7.8 percent unemployment rate either doesn’t understand economics or is wildly removed from how severe that questionable number actually is.
In terms of the raw data, in September the economy created 67,000 fewer jobs than in July, a fall of 37 percent.
With close to 15 million classified as long-term unemployed/underemployed, the 114,000 jobs created don’t even register.
Most legitimate economists feel that we need 150,000 to 175,000 a month just to stay even, and 300,000 to 400,000 per month for three to four years just to get back to semi-respectability — 5.5 percent unemployment.
Let’s leave off with some irony. Jeffrey Immelt, Welch’s hand-picked successor at GE, is chairman of the President’s Council on Jobs and Competitiveness. The council has not met since Jan. 17, almost 10 months ago. And it’s been reported widely that Immelt will not vote for President Obama in November.