Why 8.3% is really 11.5%. And a tip of the hat to some of the smartest guys around, the folks at ZeroHedge who crunched the numbers. If you’re really interested in learning about how public finance works, not just in the US but all over the world, they are an indispensible resource and you should be at least checking in over there two or three times a week.And of course, the media won't bother to look into any of this, but will simply report whatever the Administration pulls out of its butt as though the numbers were gospel and Obama is a living god. The same media that celebrated the 8.3% number scolded President Bush when unemployment rose to 5.6%.
In January, the population was 242,300,000. That represents an increase of 1,700,000 people over the December population.
The BLS reported a seasonally adjusted labor participation rate of 63.7% and when factored against the population, that makes the implied workforce 154,400,000. In reality, participation is more like the long term average of 65.8% because old fogeys like me not only aren’t retiring at the rates BLS assumes, we are either working overtime or have a second job (you’re reading mine, and thank you very much). The difference in implied vs. real participation adds 5,000,000 to people to the workforce, making the real workforce 159,400,000. The BLS and the Obama Administration in general are purposefully choosing to ignore these workers.
The BLS does account for 12,800,000 unemployed workers and they base their calculation of the unemployment rate on that number. Note that they are purposefully missing almost one-third of workers who are not employed but would certainly like to have a job. By adding those workers back into the unemployed figure, the actual number of unemployed is 17,800,000
If we divide the real number of unemployed workers by the BLS reported workforce, the actual unemployment rate is NOT 8.3%, it is 11.5%.
Monday, February 13, 2012
I've been saying for months that the Obama Administration is manipulating the employment numbers to make it appear things are better than they really are going into this election year. ZeroHedge has run the numbers (from Liberty News Network):