Unemployment Drops Without Help From Stimulus Bill

Given that barely 10% of the $787 billion dollar stimulus bill has actually been spent, you can't credit if for the slight drop in the unemployment rate:

Employers throttled back on layoffs in July, cutting just 247,000 jobs, the fewest in a year, and the unemployment rate dipped to 9.4 percent, its first decline in 15 months.

It was a better-than-expected showing that offered a strong signal that the recession is finally ending.

The new snapshot, released by the Labor Department on Friday, also offered other encouraging news: workers' hours nudged up after sinking to a record low in June, and paychecks grew after having fallen or flat lined in some cases.

To be sure, the report still indicates that the jobs market is on shaky ground. But the new figures were better than many analysts were expecting and offered welcomed improvements to a part of the economy that has been clobbered by the recession.

Analysts were forecasting job losses to slow to around 320,000 and the unemployment rate to tick up to 9.6 percent.

The dip in the unemployment rate -- from June's 9.5 percent -- was the first since April 2008.

Economists had forecast that the economy would begin to recover about this time even if there was no stimulus package. So, will any Republican dare to offer a bill that will cancel the remaining $700 billion in wasted stimulus spending? It's clearly not needed.

If Obama was smart he'd propose the cancellation himself to try and get funding for health care. But that's not likely to happen because overreach has been a hallmark of his administration and he wouldn't want to tick off all the Democrats who slipped earmarks in the bill.

UPDATE: If you were wondering how we could continue to lose jobs and yet see a decrease in the unemployment rate, Jim Geraghty has the answer:

In June, the Bureau of Labor Statistics said the civilian labor force was 154,926,000 people.

In July, 796,000 of those were taken out of their definition of the workforce, and thus their unemployment calculations for this month, because they have stopped looking for work “because they believe no jobs are available for them.” Ten percent of the June workforce would be 15.4 million, 1 percent would be 1.5 million, and so 796,000 is roughly one half of one percent.

In other words, BLS took .5 percent of what you and I would consider unemployed and took them out of their total. And with that, unemployment went down one tenth of one percent.

Now it makes sense. It's clear that things are not as rosy as the press and Obama will present it.