Employment Numbers Were Not That Great

Yesterday's employment numbers were trumpeted as "good news" by the financial media. Intead of losing 125,000 jobs, as the consensus predicted, the US only lost 11,000 non-farm payroll jobs, which was the best (least bad) number in two years. And, the unemployment rate dropped from 10.2% to 10.0%. Think about it for a second though. If we lost jobs, then how did unemployment drop? The answer is that more people are dropping completely out of the labor market. This should hardly be construed as good news. The fear of Obama's socialist policies (cap and trade, government run healthcare, etc) are keeping businesses from hiring new people. Note in the charts below how much worse the job losses are in this recession versus the average of prior recessions. I think this is a reflection of "regime risk", which is the uncertainty created in the economy when the federal government plays a prominent role...just like now.