Former two-decade CEO of General Electric Jack Welch caused quite a stir this week as he tweeted his doubts on the validity of a reported dip in unemployment from 8.1 to 7.8 percent. “Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers.”
Chicago guys refers, of course, to President Obama’s administration.
The jobs numbers were just what the doctor ordered for Obama, as he needed to change momentum following his whipping in the October 3 debate at the hands of challenger Mitt Romney. Bad job news on top of his debate calamity could have officially capsized the president’s reelection campaign.
Welch has taken major heat for his comments, but has stood his ground, for example resigning from his position as a contributor to Fortune magazine following their criticism of his statement.
Welch, who is thought to be just shy of a billionaire, maintained in a Wall Street Journal editorial yesterday, that “the 7.8 percent unemployment figure released by the Bureau of Labor Statistics (BLS) last week is downright implausible. And that’s why I made a stink about it.”
His accusations have been met with stern rebukes from the BLS and the Obama administration, with senior aide David Axelrod lumping Welch in with “birthers” who question the birthplace of Obama.
Representatives of mainstream economic groups such as the investor’s ratings group Moody’s Financial also have brushed aside Welch’s comments.
But still, Welch, who nobody would accuse of being a dummy, holds steadfast. He says that the statistics can indeed be manipulated depending on what questions are asked in the surveys. The statistics are gathered by census workers who interview over 60,000 persons each month.
Welch also noted in his editorial that in August labor-force participation dropped to 63.5 precent, the lowest since September 1981, ironically causing unemployment to drop 0.2 percent.
Then, approximately 602,000 government workers – that’s federal, state and local – were added in the months of August and September, the largest gain in over 20 years. Overall the BLS says 873,000 jobs were added in the September tally, the greatest gain since 1983, when the economy was in full-boom cycle, but under 200,000 were full-time private sector jobs.
Welch points out that having reviewed a dozen companies in last month the economy is not in dire straits, but neither is it moving at breakneck speed enough to support a drop in unemployment from 8.3 to 7.8 percent in two months.
Welch calls the current economy “a weak recovery,” with 143 million employed today compared to 146 million in 2007. And that 3 million discrepancy doesn’t account for millions more in population growth without any jobs to show.