As the White House proclaims a recovery is occurring, and the stock market has a head of steam, millions of Americans and their dependents are being left out of the recovery, according to a set of economic indicators.
Perhaps the most worrying yet least reported aspect of the so-called US recovery involves the national labor picture. Although the official US unemployment rate is 6.7 percent, this figure obscures the reality, according to an influential Wall Street adviser.
In a leaked memo to clients, David John Marotta calculates the actual unemployment rate of Americans out of work at an astronomic 37.2 percent, as opposed to the 6.7 percent claimed by the Federal Reserve.
“The unemployment rate only describes people who are currently working or looking for work,” he said.
“Unemployment in its truest definition, meaning the portion of people who do not have any job, is 37.2 percent. This number obviously includes some people who are not or never plan to seek employment. But it does describe how many people are not able to, do not want to or cannot find a way to work,” he and colleague Megan Russell reveal in their client report, which was leaked to the Washington Examiner.
Contrary to expectations, a drop in the unemployment rate, Marotta argues, is presently a sign that the unemployed are simply dropping out of the job market.
The “officially-reported unemployment numbers decrease when enough time passes to discourage the unemployed from looking for work,” said Marotta andRussel. “A decrease is not necessarily beneficial; an increase is clearly detrimental.”
The authors then take aim at the so-called Misery Index, which provides something of a pulse rate of American prosperity, based on unemployment and inflation. The Wall Street adviser said the Index, which he maintains is actually over 14, as opposed to the 8 advertised by Washington, fails to address how the US economy is being hugely subsidized by various schemes, including monthly bond purchases by the Federal Reserve.
“Today, the Misery Index would be 7.54 using official numbers,” the two analysts wrote. However, taking into consideration the full unemployment picture, including workers who have given up the job search, which is 10.2 percent, together with the historical method of calculating inflation, which is now 4.5 percent, ‘the current misery index is closer to 14.7.”
Marotta’s findings, which put the actual US unemployment rate at over 37 percent, seem more credible when viewed alongside other indicators, including the number of Americans who now rely on government assistance to make ends meet.
It has just been reported that a record 20 percent of American households were receiving food stamps in 2013, according to data from the US Department of Agriculture (USDA).
The USDA data shows there were 23,052,388 households on food stamps in an average month of fiscal 2013, a jump of 722,675 from fiscal year 2012, when there were 22,329,713 households on food stamps per month on average.
Last year, according to data from the Census Bureau, there were 115,013,000 households. With 23,052,388 households – or 20 percent of the total number of households –now dependent on food stamps.
In just half a decade, the number of American households on food
stamps has significantly increased. In fiscal year 2009, for
example, the number of households receiving the government
assistance program was 15,232,115. Five years later, in 2013,
that number had surged by 51.3 percent to hit 23,052,388
Meanwhile, the monthly average for individuals on food stamps hit an all-time-high of 47,636,084, according to the USDA. This is an increase of 1,027,012 over the 46,609,072 people who were getting food stamps in 2012.
In 2009, the number of individuals relying on the government program stood at 33,489,975. In 2013, the number was 47,636,084, an increase of 42.2 percent.
It should come as no surprise that spending on the US government’s food stamp program, officially known as the Supplemental Nutrition Assistance Program (SNAP), has reached an all-time high.
Last year, SNAP cost $79,641,880,000 - a 164 percent increase over the past decade.
During the last five years, the SNAP program exploded by 36.8 percent, from $58,223,790,000 in 2009 to $79,641,880,000 in 2013.