New government data shows that job growth slowed in January. According to the Bureau of Labor Statistics, the economy added 151,000 new jobs and the unemployment rate went down to 4.9 percent. But the low unemployment numbers are partially distorted by the low 62.7% labor participation rate that continues to dominate the so-called “Obama Recovery.” By not counting almost 95 million Americans who are not participating in the labor force, the low unemployment number does not accurately reflect the true employment situation. In addition, a BLS report from yesterday found that for the last quarter of 2015 labor productivity (output per hour) fell 3 percent, while unit labor costs increased 4.5 percent. This does not bode well for firms’ future hiring plans.
The president often talks about how people should pay their “fair share” in taxes, but perhaps he should focus less on taxes and more on getting people back to work so they can actually start paying taxes.