Posted 12/07/2012 06:54 PM ET
Economy: A rip-roarer for job creation and a major drop in the unemployment rate. At least, that's how the mainstream media sum up November's job numbers. But scratch the data and a different story surfaces.
A lot of pundits thought the November jobs data were pretty good, with 146,000 new jobs and a drop in unemployment to 7.7%. But look closer, and you see recession mode.
With nonfarm payrolls swelling by 146,000 and the jobless rate easing from 7.9% to 7.7%, November looked pretty good to many pundits. But the underlying trends aren't so favorable, and the future, with a slowing economy about to drive off a fiscal cliff, isn't bright at all.
Start with payroll jobs. The 146,000 wasn't awful, but to make a serious dent in joblessness, we need to add at least 200,000 a month for a prolonged period. In this poisoned atmosphere for business, that won't happen.
Since 2011, businesses have added about 151,000 jobs a month. But since June that's slowed to just 139,000. We're clearly going the wrong way.
And by the way, remember those big payroll gains in September and October, right before the election? Forget it. The Labor Department has revised down its job estimates for those two months by 49,000.
OK, but we still have private-sector job growth, right? Not really. In the last six months, 621,000 of the 847,000 new jobs created have been in government, not the private sector, according to CNSNews.com. That's 73% of all jobs — not a healthy labor market.
As for that big "drop" in the unemployment rate, all of it was due to the fact that 540,000 Americans are no longer looking for work. They either dropped out, took early disability or retired. Since the start of 2009, 9.7 million Americans have fallen into this category.
All told, more than 24 million Americans who want jobs don't have them, driving the labor force participation rate to 63.6%, just above August's 31-year low of 63.5%. This is the worst labor market in a recovery ever.
And it may get worse. The quarterly Wells Fargo/Gallup small-business survey found that 21% plan to cut jobs over the next six months — a surge from 10% last June and a record high.
IBD's own research shows that small businesses account for nearly 80% of all new job creation in America. A small-business slump means no jobs. It's that simple.
Why is the labor market refusing to recover as it has in the past, with millions of new jobs each year amid rapid economic growth? In a word, Obamanomics.
Thanks to ObamaCare, "stimulus" spending of $860 billion, threats of higher tax rates on small business owners and entrepreneurs, the economy's going nowhere. We may soon enter a new small-business recession that can be blamed on no one but Barack Obama.