Unfortunately for the economy, which has ceased to correlate to the stock market courtesy of the Federal Reserve, the stock market and the underlying fundementals, in this case jobs, are now completely independent. The chart below shows that while the stock market may be at its pre-recession levels, the employment situation has only managed to recoup half the total lost jobs, and with 4 million jobs still to go before all the jobs lost are recovered, it is very likely that not even by the end of Obama’s second term will the economy have regained all the lost jobs since December 2007.
Naturally, the BLS has an explanation for the above chart. It wants the world to believe that while the US population was increasing by some 200K each month, this was offset by the surge of people not in the labor force – orange line below – which has increased by a record 9.6 million people in the past 5 years, or some 160K each month. The implication is that over the past 5 years, the US labor force – blue line below – increased by a tiny 1.6 million: a number designed with one thing in mind: to show a declining US unemployment rate. Because had the the Labor participation rate kept up with the US population, the US unemployment rate now would be about 11%: not quite as politically palatable as an unemployment rate below 8% for an incumbent president.