                        NONPRECEDENTIAL DISPOSITION
                          To be cited only in accordance with
                                  Fed. R. App. P. 32.1


              United States Court of Appeals
                                   For the Seventh Circuit
                                   Chicago, Illinois 60604

                                  Argued August 8, 2012
                                  Decided August 21, 2012

                                             Before

                             WILLIAM J. BAUER, Circuit Judge

                             DIANE P. WOOD, Circuit Judge

                             DIANE S. SYKES, Circuit Judge


No. 11-3013

JAMES W. MUELLER,                                     Appeal from the United States District
                Plaintiff-Appellant,                  Court for the Central District of
                                                      Illinois.
       v.
                                                      No. 10-1343
MICHAEL J. ASTRUE, Commissioner
of Social Security,                                   Michael M. Mihm,
                    Defendant-Appellee.               Judge.



                                          ORDER

    James Mueller, a 42-year-old former factory worker with a history of mental illness, appeals
from the district court’s decision upholding the denial of his application for supplemental
security income. Because the administrative law judge failed to explain why she found Mueller
not credible and why she rejected the opinion of his treating physician, we have no choice but
to reverse and remand for further proceedings.
No. 11-3013                                                                             Page 2


                                               I

    Over the years, Mueller has worked in a variety of temporary jobs, including roofer,
receiver and shipper of parts at a factory, and laborer. Most recently, he had a position as a
temporary shipping clerk filling out paperwork, but he lost his job after about a month because
he was unable to keep up the required pace. He lost two previous jobs for similar reasons.
Mueller has had other problems, too. His work history is spotty because he spent time working
for himself, so that he could get away with dealing drugs; at one point he was incarcerated.

    On October 29, 2008, Mueller applied for supplemental security income, asserting that he
has been disabled since September 1, 2008. (There was an earlier application for benefits in
1993 that was denied, perhaps because of his past drug use. It is not relevant to the present
appeal.) A few months earlier he had called a crisis worker saying that he felt as if he was
going insane and that he was overwhelmed. He reported suicidal thoughts and an inability to
sleep. At the time he was taking Prozac for depression. During an examination several days
after the call, Mueller described mood swings, anger, racing thoughts, trouble sleeping,
depression, OCD, and impulsivity.

    Mueller went to the emergency room in August 2008, complaining that he had been
experiencing suicidal thoughts for about six weeks. He was admitted to the adult psychiatric
unit, where doctors diagnosed him with bipolar disorder, prescribed Risperdal (an anti-
psychotic used to treat schizophrenia and bipolar disorder), and released him after a week.
Mueller saw psychiatrist Dr. Scott Wright in September. He reported to Dr. Wright that he was
feeling better on the Risperdal, but that he had continued problems with sleeping. Dr. Wright
recorded that Mueller reported “classic manic symptoms such as irritable mood, mood swings
that last for more than four days at a time, decreased need for sleep.” Mueller described his
memory as poor and scattered and his concentration on Risperdal as “still pretty bad.”
Dr. Wright increased Mueller’s dosage of Risperdal. Mueller next saw Dr. Wright in
November, at which time Dr. Wright described Mueller’s mood as “kind of nervous” but not
depressed. His concentration was “okay” and his energy was low.

    Several state-agency consultants evaluated Mueller’s application. Dr. Jane Velez, a clinical
psychologist, interviewed Mueller in January 2009 and learned that his medication was
keeping him mostly “on an even keel” and that he had not been suicidal for a while. The
medication also was controlling the auditory and visual hallucinations that he had
experienced. She evaluated Mueller as “mildly anxious,” with adequate attentional capacity
and intact short-term and long-term memory, and she concluded that he has the capacity to
maintain a regular schedule and the pace and endurance to perform at a consistent acceptable
rate. That same month Dr. Joseph Mehr reviewed Mueller’s medication records, including
Dr. Velez’s evaluation, and assessed Mueller’s mental residual functional capacity. Dr. Mehr
No. 11-3013                                                                               Page 3

found Mueller moderately limited in his ability to understand, remember, and carry out
detailed instructions but able to understand and remember instructions for routine and
repetitive operations.

    After the agency denied his application, Mueller requested reconsideration and apparently
sought out further assessments from Dr. Wright. Dr. Wright completed a medication
evaluation report in February 2009 stating that Mueller was “doing well” and did not have
problems with mood, sleep, appetite, or energy. He indicated that Mueller’s symptoms were
“somewhat better.” He also completed a mental-impairment questionnaire for Mueller in
March 2009. Dr. Wright described clinical findings of poor concentration, sleep problems,
unstable moods, poor and scattered memory, restlessness, irritability, impulsivity, and racing
thoughts. He characterized Mueller as having “no useful ability” to understand and remember
detailed instructions. Mueller could not, in his opinion, meet competitive standards in
maintaining attention for a two-hour segment, maintaining regular attendance, making simple
decisions, getting along with co-workers, responding to changes, dealing with normal work
stress, carrying out detailed instructions, and maintaining socially appropriate behavior.
Dr. Wright predicted that these impairments would cause Mueller to be absent from work
more than four days per month. Mueller had, Dr. Wright thought, “marked” difficulties in
maintaining concentration, persistence, or pace. Dr. Wright expected that Mueller would
experience one to two episodes of decompensation each year. Progress notes from Mueller’s
monthly counseling sessions round out the medical evidence. In April 2009 another state-
agency consultant reviewed the initial case file and the new evidence gathered at the
reconsideration level and agreed with the prior agency assessment that Mueller could perform
unskilled work.

    After his request for reconsideration was denied, Mueller requested a hearing before an
ALJ. That hearing took place in May 2009. Mueller testified that he lives with his mother, sister,
and nephew. At home, Mueller said, he mows the lawn and picks up after himself and mainly
sits around watching eight to nine hours of television a day; he likes to fish and goes camping
once or twice a year. He stated that he previously used methamphetamine and marijuana but
had stopped at least two years before the hearing. Mueller told of going to the hospital because
he wanted to kill himself the year before. He explained his obsessive concerns with cleanliness
and organization. He testified that he has problems concentrating and finishing what he starts,
and he experiences auditory hallucinations that are controlled by Risperdal. Mueller also said
he suffers from mood swings and goes from feeling happy to angry very quickly.

    Relying on the ALJ’s hypothetical, a vocational expert testified that a person who could do
routine, repetitive unskilled work could perform a number of Mueller’s past jobs and other
work within the economy. Mueller’s attorney questioned the VE about the availability of jobs
for a hypothetical person who could not maintain a high level of productivity; the VE
responded that such a person might be unable to maintain employment. The VE also
No. 11-3013                                                                             Page 4

acknowledged that, generally, more than two days of absence per month or a need for more
breaks than normal would be unacceptable to employers.

    The ALJ issued her opinion in June 2009. The opinion, to put it charitably, does not bear
the mark of careful work. To start with, it inexplicably refers to Mueller as a female
throughout. The ALJ performed the five-step analysis under 20 C.F.R. § 404.1520(a). At Step
1 she concluded that Mueller had not engaged in substantial gainful activity since October
2008. At Step 2 she discussed Mueller’s testimony about his daily activities, attempted suicide,
mood swings, and obsessive thoughts and concluded that his depression and anxiety
constitute severe impairments. But then in one sweeping sentence she dismissed Dr. Wright’s
opinion that Mueller’s impairments leave him unable to perform a number of mental activities
required to work:

   The opinion by Dr. Wright that the claimant is unable to perform many mental
   activities of work is directly contradicted by the claimant’s description of her daily
   activities, by the objective medical evidence of record, by the assessments of other
   mental health professionals, by the observations of the claimant, and by the claimant’s
   ability to perform work in the past with her current mental illness and symptoms.

At Step 3 the ALJ determined that none of Mueller’s impairments met the listing requirements
for a disability and that Mueller had not experienced the “marked” limitations caused by
mental illness. (The adjudicator evaluates the level of severity of a claimant’s mental
impairment at Steps 2 and 3 of the sequential evaluation by rating the claimant’s limitations
and restrictions in four areas: (1) activities of daily living; (2) social functioning;
(3) concentration, persistence or pace; and (4) episodes of decompensation. 20 C.F.R.
§ 404.1520a(c)(3). These four functional areas correspond to the requirements of “paragraph
B” of the agency’s mental-impairment listings.) The ALJ found him to be mildly restricted in
activities of daily living and social functioning, and moderately limited with regard to
concentration, persistence, and pace. She acknowledged that Mueller had experienced one
episode of decompensation.

    At Step 4 the ALJ evaluated Mueller’s mental residual functional capacity, concluding that
his depression did not prevent him from performing “a broad range of unskilled work.” She
found that Mueller could tolerate frequent—though not constant—interaction with others in
a work setting despite his mental impairments. The ALJ stated that “[n]o credible treating,
examining, or reviewing medical source has reported that the claimant is disabled or unable
to work.” She rejected Mueller’s testimony that he cannot work, reasoning that the objective
medical evidence, the absence of a source finding Mueller disabled, and Mueller’s daily
activities contradict Mueller’s self-assessment. The ALJ wrote that “the claimant’s statements
concerning the intensity, persistence and limiting effects of these symptoms are not credible
to the extent they are inconsistent with the above residual functional capacity assessment.”
No. 11-3013                                                                                  Page 5

    At Step 5 the ALJ concluded that Mueller retained the mental RFC to perform his past
relevant work as a bench assembler, hand packer, and construction laborer. He could also
perform other unskilled jobs. These findings mandated a conclusion that he is not disabled.

                                                 II

    Because the Appeals Council declined review, we review the ALJ’s decision as the final
decision of the Commissioner. Getch v. Astrue, 539 F.3d 473, 480 (7th Cir. 2008). In so doing, we
must confine ourselves to the rationale offered by the ALJ. See SEC v. Chenery Corp., 318 U.S.
80, 93–95 (1943); Spiva v. Astrue, 628 F.3d 346, 353 (7th Cir. 2010).

    Mueller first argues that the ALJ gave insufficient weight to Dr. Wright’s opinion that his
mental impairments render him unable to work. A treating physician’s opinion is given
controlling weight when it is “well-supported by medically acceptable clinical and laboratory
diagnostic techniques and is not inconsistent with other substantial evidence.” 20 C.F.R.
§ 404.1527(c)(2); see Larson v. Astrue, 615 F.3d 744, 749 (7th Cir. 2010). When discounting a
treating physician’s opinion, an ALJ must give “good reasons.” 20 C.F.R. § 404.1527(c)(2);
Campbell v. Astrue, 627 F.3d 299, 306 (7th Cir. 2010). The opinion before us does not meet that
standard. The ALJ’s entire “analysis” of Dr. Wright’s assessment consists of a one-sentence
declaration that Dr. Wright’s opinion is inconsistent with Mueller’s description of his daily
activities, the objective medical evidence, the observations and opinions of other mental-health
professionals, and Mueller’s ability to perform work in the past with his current mental
illnesses and symptoms. This is a conclusion, not a reason (or reasons). The ALJ did not explain
these findings or tie them to the administrative record. Rather than defend the ALJ’s work
product as sufficient, the Commissioner spends ten pages of his brief purporting to tell this
court what the ALJ must have been thinking. The Commissioner insists that this approach
does not run afoul of Chenery, 318 U.S. at 87–88, since the agency “relies on the ALJ’s stated
rationale for her conclusion and is simply providing additional evidentiary detail consistent
with that stated rationale.”

    Yet as we have said repeatedly, “what matters are the reasons articulated by the ALJ,” not
the rationale advanced by the Commissioner on appeal. Jelinek v. Astrue, 662 F.3d 805, 812
(7th Cir. 2011); see also Spiva, 628 F.3d at 353; Larson, 615 F.3d at 749; Parker v. Astrue, 597 F.3d
920, 922 (7th Cir. 2010). Here, we might as well have no reasons. Although the ALJ alludes to
opinions of “other mental health professionals,” she does not identify anyone by name or link
anything said by the state-agency consultants to her rejection of Dr. Wright’s opinion. See 20
C.F.R. § 404.1527(c)(2); Moss v. Astrue, 555 F.3d 556, 561 (7th Cir. 2009). Mueller’s “ability to
perform work in the past” is especially weak support for the ALJ’s rejection of Dr. Wright’s
opinion. Mueller’s work record actually bolsters his position. He testified that he lost his last
three jobs on account of his problems with concentration, persistence, and pace. The ALJ’s
assumption that Mueller’s past work undercuts his present claim of disability also seems to
No. 11-3013                                                                                  Page 6

rest on the obviously incorrect proposition that mental illness that was not disabling in the past
automatically cannot worsen later. We have observed that mental illness does not always
follow a predictable trajectory. See Larson, 615 F.3d at 751; Bauer v. Astrue, 532 F.3d 606, 609 (7th
Cir. 2008).

   Even if there had been sound reasons for refusing to give Dr. Wright’s assessment
controlling weight, the ALJ still had an obligation to determine what value his assessment did
merit. See 20 C.F.R. § 404.1527(d)(2); Larson, 615 F.3d at 751. “If an ALJ does not give a treating
physician’s opinion controlling weight, the regulations require the ALJ to consider the length,
nature, and extent of the treatment relationship, frequency of examination, the physician’s
specialty, the types of tests performed, and the consistency and supportability of the
physician’s opinion.” Moss, 555 F.3d at 561 (citing 20 C.F.R. § 404.1527(d)(2)). The record
contains nothing indicating that the ALJ considered any of these factors.

    Mueller argues further that the ALJ erred in finding him not credible. He correctly points
out that the ALJ’s initial explanation for disbelieving his testimony—that his “statements
concerning the intensity, persistence, and limiting effects” of his symptoms were “not credible
to the extent they are inconsistent with” the judge’s assessment of his residual functional
capacity—is “meaningless boilerplate seen frequently in decisions from ALJs.” See Shauger v.
Astrue, 675 F.3d 690, 696 (7th Cir. 2012). We have criticized this recitation as unhelpful, and
worse, as implying “that ability to work is determined first and is then used to determine the
claimant’s credibility.” Bjornson v. Astrue, 671 F.3d 640, 645 (7th Cir. 2012); see Parker, 597 F.3d
at 921–22.

    Mueller also criticizes the ALJ’s other reasons for discrediting his testimony. The ALJ
asserted, for example, that Mueller’s testimony lacked support in objective medical evidence
and thus was unworthy of belief. But, if the ALJ thought that “objective” evidence was
essential, she was wrong. Mueller’s statements about his “symptoms or about the effect the
symptoms have on his . . . ability to work may not be disregarded solely because they are not
substantiated by objective medical evidence.” SSR 96-7p(4); Bjornson, 671 F.3d at 646; Myles v.
Astrue, 582 F.3d 672, 676–77 (7th Cir. 2009). The ALJ also mishandled the evidence of Mueller’s
daily activities. An ALJ may consider a claimant’s daily activities when assessing credibility,
but she must explain perceived inconsistencies between these activities and the medical
evidence. See Stewart v. Astrue, 561 F.3d 679, 684 (7th Cir. 2009); Arnold v. Barnhart, 473 F.3d 816,
823 (7th Cir. 2007). The ALJ here did not do so, and it is certainly not obvious how the very
minimal activities Mueller described contradict a claim of a disabling mental disorder.
See Bauer, 532 F.3d at 608; Zurawski v. Halter, 245 F.3d 881, 887 (7th Cir. 2001). Because the ALJ
did not substantiate her credibility determination with references to specific record evidence,
this court cannot assess whether her credibility determination was “patently wrong.”
See Schaaf v. Astrue, 602 F.3d 869, 875 (7th Cir. 2010).
No. 11-3013                                                                            Page 7

    These errors go to the heart of the disability determination, and so we cannot find on this
record that they were harmless. See McKinzey v. Astrue, 641 F.3d 884, 892 (7th Cir. 2011).
Indeed, the Commissioner has not argued harmless error. We assume that whatever ALJ
receives this case on remand will implement this court’s judgment in good faith. Although
Mueller has asked for an immediate award of benefits, we do not normally do that, and we do
not regard this case as a good candidate for such an action. Our only point is that the record
contained evidence that would have supported an award for Mueller, but the ALJ passed over
it almost in silence. Mueller is entitled to have all the evidence fairly weighed, and the
reviewing court cannot do its job without the agency’s explanation.

                                        *      *     *

   Because the ALJ failed to explain adequately the reasoning behind the adverse credibility
determination and the rejection of Dr. Wright’s medical opinion, we REVERSE the agency’s
determination and REMAND for further proceedings consistent with this order.
