Cold Hard Facts of Obama's Economy

There’s an old adage, “Don’t let the facts get in the way of a good story.”

That could be the battle cry within the Obama administration when it comes to Obama’s work on the economy through his five plus years as president. But a close and objective look at the facts shows that the Obama-led and Obama-owned economy tells one and only one story — FAILURE.

Let’s begin on the labor front, where the numbers are atrocious. While the monthly unemployment rate is the headline-grabbing number so many flock to, it is far from the best gauge of labor market strength.

The unemployment rate currently stands at 7.3%. Obama backers will point to the fact… again let’s look at the facts, and rightfully say that the unemployment rate has steadily fallen from its peak of 10% in October 2009 and has remained below 8% since August 2012. These are indeed facts, but they mask the underlying and quite troubling data.

Understand that the unemployment rate is a rather simplistic calculation. The numerator is composed of the number of people unemployed and who have looked for work in the past four weeks. That number is then divided by the total number of individuals in the labor force.

Simple math tells us that this figure can decline in a number of ways. The natural inclination for many is to assume that the unemployment percentage is dropping because the numerator, again measured by the total number of unemployed people actively seeking work, is declining due to these folks having found work. Not so, however.

The reason the number has been declining is that the denominator, which is composed of the total labor force in America, continues to fall. In fact, the overall labor force declined by 312,000 in August, which is the most recent data available. That means 312,000 Americans dropped out of the labor force in August. In other words, they gave up looking for a job.

The far more accurate and factual representation of the labor market is the labor force participation rate. It paints a far purer picture. This rate is simply the percent of the population who are either working or actively looking for work. In other words, these individuals are engaged in the labor market.