Jobs Picture

By John Ballard

Unemployment is expected to show flat or grow for the rest of the year despite more jobs coming back.
Why?
Seems like "discouraged workers" not being included lately will return to the market, joining those still looking. Business Week...

An exodus of discouraged workers from the job market kept the U.S. unemployment rate from climbing above 10 percent in December, economists said.

Had the labor force not decreased by 661,000 last month, the jobless rate would have been 10.4 percent, according to economists including David Rosenberg at Gluskin Sheff & Associates in Toronto and Harm Bandholz at UniCredit Research in New York.
[...]

The participation rate, or the share of the population in the labor force, fell to 64.6 percent in December, the lowest level since 1985, from 64.9 percent.

The labor force will probably grow this year as the economy continues to expand and Americans believe jobs will be easier to get. That will mean the unemployment rate will head higher because there won�t be enough jobs available to satisfy the demand for work.

�The exodus from the labor force can�t contain the unemployment rate indefinitely,� said Ryan Sweet, a senior economist at Moody�s Economy.com in West Chester, Pennsylvania. �We expect unemployment to resume rising over the next few months, peaking near 10.5 percent in the third quarter.�

This is what the president explained to the GOP at their meeting in Baltimore.
He should have followed the Grayson model and brought along a couple of charts and an easel. The audience seems to have missed plain language.

Note the dates.

Barack Obama's administration came into office near the ugly tip of that chart.

Here's another chart that looks very much the same.

Tim Geitner is getting to be as unpopular as Rahm Emanuel, but when he said "We came into office with the economy falling off a cliff" this is what he meant.
Something turned it around.
I don't think it was magic.