Why the BLS' Unemployment number is misleading

>> Wednesday, March 14, 2012

"…it’s useful to understand how the Bureau of Labor Statistics calculated the 243,000 increase in employment that it reported for January. Total non-farm employment in the U.S., before seasonal adjustments, fell by 2,689,000 jobs in January. However, because it’s typical for the economy to lose a large number of jobs after the holidays, largely in retail trade, construction, and manufacturing, the BLS estimated that the “normal” seasonal decline in employment should have been 2,932,000 jobs in January. The difference between the two numbers, of course, was 243,000 jobs, which was reported as an increase in employment. The fact that the size of the seasonal adjustment was more than 12 times the number of reported jobs, and more than 30 times the “beat” in economists’ expectations, should provoke at least some hesitation in taking the number at face value."

--Dr. John Hussman, February 6, 2012 -  Notes on Risk Management - Warts and All ,
under the heading: The economy: weak leading, lukewarm lagging

As with the CBO's incessant bungling of the country's projected anything (there's a lot of chicanery and outright deception involved in their conjurations), the Bureau of Labor Statistics is likewise besotted by the same fuzzy math techniques. In the CBO's defense, it can only calculate a number based on the information given them by lawmakers. The BLS, however, is much more the political animal; it has an agenda, and the truth is not necessarily at the top of its integrity list.

In a previous post I pointed out that the BLS and the administration conveniently (for their narrative) ignore certain peoples when it comes to calculating the unemployment number they give us each month.

Unemployment is expected to remain at 8.3 percent in February, as jobs creation barely outpaces population growth. Over the past three years, the percentage of adults participating in the labor force –those employed, self employed, or unemployed but looking for work – declined significantly. If the adult participation rate was the same today as when Barack Obama became president, unemployment would be 11 percent.

Adding adults on the sidelines, those who say they would reenter the labor market if conditions improved and part-time workers who would prefer full-time positions, the unemployment rate becomes 15.2 percent. Factoring in college graduates in low skill positions, like counter-work at Starbucks, and unemployment is closer to 20 percent.

--Dr. Peter Morici, March 7, 2012,  
Report Expected to Show Fewer Jobs Added in February

I'll grant you, working behind the counter at Starbucks is work, but not particularly meaningful, however, unless you're the franchise owner, or a manager with aspirations. So it's one thing to say the real unemployment rate is closer to 11% because we've stopped counting those who want to work but have given up looking for work, or because adult participation, if it was the same today as when Obama took office, would be 11%-- either/or, both are essential the same.

When Barack Obama entered office in January, 2009, the labor force participation rate was 65.7%, meaning nearly two-thirds of working age Americans were working or looking for work.

When the recession supposedly officially ended in June, 2009, the labor force participation rate was still 65.7%.

In the latest, much celebrated, unemployment report, the labor force participation rate had plummeted to 63.7%, the most rapid decline in U.S. history.  That means that under President Obama nearly 5 million Americans have fled the workforce in hopeless despair.

The trick is that when those 5 million are not counted as in the work force, they are not counted as unemployed either.  They may desperately need and want jobs.  They may be in poverty, as many undoubtedly are, with America suffering today more people in poverty than in the entire half century the Census Bureau has been counting poverty.  But they are not even counted in that 8.3% unemployment rate that Obama and his media cheerleaders were so tirelessly celebrating last week.

If they were counted, the unemployment rate today would be a far more realistic 11%, better reflecting the suffering in the real economy under Obamanomics.

--Peter Ferrara, March 9, 2012 - Forbes.com, 
Don't be fooled: the Obama unemployment rate is 11% 

Want to know what's wrong with America? None of our politicians (the current elected batch, and especially the entrenched apparatuses of government) will tell us the truth. They have their own agendas and we are only important to them during election years.


BenT - the unbeliever,  March 14, 2012 at 4:01 PM  

How is it chicanery when the BLS has used the same methodology for the last 20 years to measure both jobs and unemployment?

The E-5 measure (those search + those who've given up) has always been there published every month. It was there during the Bush presidency where it was also 3-4% higher than the E-3 measure (just those searching for work). It was there during Clinton.

Nothing is being hidden or shaded. You are just being propagandized by party shills who feel their electoral hopes ride on painting a bad economic picture.

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