The Real Economic Numbers: 21.5% Unemployment, 10% Inflation And Negative Economic Growth

TEC ^ | 06/12/2018 | Michael Snyder

[SeekAndFind]

Every time the mainstream media touts some “wonderful new economic numbers” I just want to cringe. Yes, it is true that the economic numbers have gotten slightly better since Donald Trump entered the White House, but the rosy economic picture that the mainstream media is constantly painting for all of us is completely absurd. As you are about to see, if honest numbers were being used all of our major economic numbers would be absolutely terrible. Of course we can hope for a major economic turnaround for America under Donald Trump, but we certainly are not there yet. Economist John Williams of shadowstats.com has been tracking what our key economic numbers would look like if honest numbers were being used for many years, and he has gained a sterling reputation for being accurate. And according to him, it looks like the U.S. economy has been in a recession and/or depression for a very long time.

Let’s start by talking about unemployment. We are being told that the unemployment rate in the United States is currently “3.8 percent”, which would be the lowest that it has been “in nearly 50 years”.

To support this claim, the mainstream media endlessly runs articles declaring how wonderful everything is. For example, the following is from a recent New York Times article entitled “We Ran Out of Words to Describe How Good the Jobs Numbers Are”…

The real question in analyzing the May jobs numbers released Friday is whether there are enough synonyms for “good” in an online thesaurus to describe them adequately.

So, for example, “splendid” and “excellent” fit the bill. Those are the kinds of terms that are appropriate when the United States economy adds 223,000 jobs in a month, despite being nine years into an expansion, and when the unemployment rate falls to 3.8 percent, a new 18-year low.

Doesn’t that sound great?

It would be great, if the numbers that they were using were honest.

The truth, of course, is that the percentage of the population that is employed has barely budged since the depths of the last recession. According to John Williams, if honest numbers were being used the unemployment rate would actually be 21.5 percent today.

So what is the reason for the gaping disparity?

As I have explained repeatedly, the government has simply been moving people from the “officially unemployed” category to the “not in the labor force” category for many, many years.

If we use the government’s own numbers, there are nearly 102 million working age Americans that do not have a job right now. That is higher than it was at any point during the last recession.

We are being conned. I have a friend down in south Idaho that is a highly trained software engineer that has been out of work for two years.

If the unemployment rate is really “3.8 percent”, why can’t he find a decent job?

By the way, if you live in the Boise area and you know of an opening for a quality software engineer, please let me know and I will get the information to him.

Next, let’s talk about inflation.

According to Williams, the way inflation has been calculated in this country has been repeatedly changed over the decades…

Williams argues that U.S. statistical agencies overestimate GDP data by underestimating the inflation deflator they use in the calculation.

Manipulating the inflation rate, Williams argues in Public Comment on Inflation Measurement , also enables the US government to pay out pensioners less than they were promised, by fudging cost of living adjustments.

This manipulation has ironically taken place quite openly over decades, as successive Republican and Democratic administrations made “improvements” in the way they calculated the data.

If inflation was still calculated the way that it was in 1990, the inflation rate would be 6 percent today instead of about 3 percent.

And if inflation was still calculated the way that it was in 1980, the inflation rate would be about 10 percent today.

Doesn’t that “feel” more accurate to you? We have all seen how prices for housing, food and health care have soared in recent years. After examining what has happened in your own life, do you believe that the official inflation rates of “2 percent” and “3 percent” that we have been given in recent years are anywhere near accurate?

Because inflation is massively understated, that has a tremendous effect on our GDP numbers as well.

If accurate inflation numbers were being used, we would still be in a recession right now.

In fact, John Williams insists that we would still be in a recession that started back in 2004.

And without a doubt, a whole host of other more independent indicators point in that direction too. The following comes from an excellent piece by Peter Diekmeyer…

Williams’ findings, while controversial, corroborate a variety of other data points. Median wage gains have been stagnant for decades. The U.S. labour force participation rate remains at multi-decade lows. Even our own light-hearted Big Mac deflator suggests that the U.S. economy is in a depression.

Another clue is to evaluate the U.S. economy just as economists would a third world nation whose data they don’t trust. They do this by resorting to figures that are hard to fudge.

There, too, by a variety of measures—ranging from petroleum consumption to consumer goods production to the Cass Freight Index—the U.S. economy appears to have not grown much, if at all, since the turn of the millennium.

In the end, all that any of us really need to do is to just open our eyes and look at what is happening all around us. We are on pace for the worst year for retail store closings in American history, and this “retail apocalypse” is hitting rural areas harder than anywhere else…

This city’s Target store is gone.

So is Kmart, MC Sports, JCPenney, Vanity and soon Herberger’s, a department store.

“The mall is pretty sad,” says Amanda Cain, a teacher and mother. “Once Herberger’s closes, we’ll have no anchors.”

About two-thirds of Ottumwa’s Quincy Place Mall will be empty with Herberger’s loss.

Of course it isn’t just the U.S. economy that is troubled either.

We are living in the terminal phase of the greatest debt bubble in global history, many nations around the globe are already experiencing a very deep economic downturn, and our planet is literally in the process of dying.

So please don’t believe the hype.

Yes, we definitely hope that things will get better, but the truth is that things have not been “good” for the U.S. economy for a very, very long time.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

[Tonytitan]

...a friend down in south Idaho that is a highly trained software engineer that has been out of work for two years. If the unemployment rate is really “3.8 percent”, why can’t he find a decent job?

If he's really that good he can get hired by a defense contractor and work remotely from the house. How hard is he really looking?

[SomeCallMeTim]

We sent 65 off them from Louisville to Houston in the past week. And that’s just MY business group.

[ProtectOurFreedom]

Not only did you see a record number of trucks, but 1) every truck had a “Drive With Us” sign on the back of the trailer, 2) the country is still SHORT 50,000 truck drivers (yes, 50,000),and 3) the Dow Transportation Index soared two days ago and is within spitting distance of the all-time high.

[dangus]

Paul Ryan and the Republican leadership’s claim that we need to import more immigrants to fill jobs is a damnable lie. But this is nonsense. The portion of adult Americans who don’t have jobs is fairly low by pre-Obama measures, but that’s because the number of elderly is skyrocketing. 20.8% of Americans 25-to-55 years old are NOT working, but most of those are women, many of whom are simply choosing to raise their kids. That 20.8% is only about 2% above the all-time low of 2000, and is therefore fairly consistent with U-6 unemployment being about 0.8% above the 2000 level.

[kanawa]

I wish he would have put the “our planet is literally in the process of dying” at the start.
It would have saved me the time I wasted reading the rest of the gloom.

[mywholebodyisaweapon]

I like to use what I refer to as the “Graham Cracker Index.”

Not too many year ago, graham crackers were sold in a standard-sized package, stacked flat in the box.

Then, they were packaged on edge, so that only about 75 percent of the old amount of product was sold for the same price as before: INFLATION.

Then, the boxes were made ever so smaller, so that there is now only about 60 percent of the product available for the same price: MORE INFLATION. (They usually have a lower price on the new stuff to make us think we’re getting a good deal)

Now, the OPA price police are SUPPOSED to account for portion size, but they can’t really do this without a standard of comparison. In other products it even worse, like adding more gas to the potato chip bag so it looks the same as before, but has substantially less product.

I doubt the price police have caught all these things, but the BLS says that they take it into account. I WISH I had measured all these things, but who thinks to take a sounding at any given point in time?

The bottom line is that all the Keynesian-based economic data that are gathered in this country are pretty much garbage and have been for a very long time. I don’t think the numbers have enough signal to be adjusted to the true numbers. Just too high a noise-to-signal ratio.

Finally, they explicitly increase price on the 60 percent. It’s usually when a Repubican is in office and the career bureaucrats want things to look really bad.

[FLT-bird]

See my comments about how companies view anybody out of a job for a year or more as a leper. Maybe in normal times I could sort of see it but given the awful Obama economy, I’d look at that as an economy issue rather than a “him” issue.

[DoodleDawg]

The truth, of course, is that the percentage of the population that is employed has barely budged since the depths of the last recession. According to John Williams, if honest numbers were being used the unemployment rate would actually be 21.5 percent today.

So does that mean I need to flog my 72 year old parents back into the workforce so we can get that rate lowered? My nieces and nephews in college should drop out and get a job?

[Harmless Teddy Bear]

There are software companies in Idaho?

That can be part of the problem.

You can be brilliant in your field but if you are not where they are hiring you will not be able to get a job.

[SeekAndFind]

RE: So does that mean I need to flog my 72 year old parents back into the workforce so we can get that rate lowered?

I don’t even think he is including retirees when he makes his observation.

This is one sentence to consider from the article:

” there are nearly 102 million working age Americans that do not have a job right now. “

[DoodleDawg]

I don’t even think he is including retirees when he makes his observation.

Yeah he is. That 102 million figure is obtained by taking the number of people working and subtracting that from the number of people in the work force. Work force is calculated as all people over 16 and not in the military or institutionalized. So yes, that includes people who are retired, like my parents. People who are in school and who choose not to work, like my niece and nephew. People who are unemployed by choice, like stay-at-home parents. You want that 21.5 figure lowered? All those people will have to go to work.

[Georgia Girl 2]

They always leave out food and fuel in the inflation numbers. That’s how you keep the numbers low.

[SeekAndFind]

RE: They always leave out food and fuel in the inflation numbers. That’s how you keep the numbers low.

Do they include College Education and Healthcare in the mix?

How about transportation? Cars aren’t getting any cheaper.

How about rentals or home prices?

If you exclude these basic necessities and then simply focus on computers and smart phones, you will miss a huge chunk of what people need in your calculations.

[SeekAndFind]

RE: I wish he would have put the “our planet is literally in the process of dying” at the start.
It would have saved me the time I wasted reading the rest of the gloom.

_________________________

Do you disagree with the figures that the author cites? If so, which one?

[SeekAndFind]

RE: Work force is calculated as all people over 16 and not in the military or institutionalized. So yes, that includes people who are retired, like my parents.

________________________________

OK, what does “working age Americans” in the sentence mean?

If they include retirees and those in college, then either the 102 Million figure is skewed, or the use of the term “working age Americans” is undefined or has been redefined.

[JAKraig]

There is a lot of B.S. in this piece.

_____________________________________________________

A whole lot of BS but, there is some truth too.

The store closings are total BS, yes they are closing because Amazon has free shipping and lower prices. I’m not praising Amazon, I like stores but, The gas, wear and tear on the car and time cost a lot more than the $99 a year for Prime.

I don’t want to see the stores go but the money not being spent in the stores is still being spent. There are a lot of people not working because they make money outside of taxes. Tax takes close to 50% of our earnings. We have Property, excise, sales, income, SSI, FICA and other taxes that added up really bite hard. It is no wonder that people that can make money outside of a W-2 do it. If you do a job for $1000 on the side it is the equivalent of $2000 if you don’t have to pay any tax on the money. That is why illegals are willing to work for so little, they won’t be paying any tax on it.

If we got rid of all the illegals we wouldn’t have unemployment.

[DoodleDawg]

If they include retirees and those in college, then either the 102 Million figure is skewed, or the use of the term “working age Americans” is undefined or has been redefined.

It does. College and high school. The Bureau of Labor Statistics defines the labor force as anyone over age 16 who is not on active duty in the armed forces and who is not in an institution (prison or mental facility, old age home, etc.) That figure includes retired, those not working due to choice like stay-at-home mothers, those on disability, and so forth. So yes, that 21.5% rate is skewed. That's why the government does not use it as a measure of unemployment.

[SeekAndFind]

Well, we need another major measure of labor force participation then.

It is NOT a measure of how good or dire the labor market is to include those who are in school and those who are retired.

[Alberta's Child]

So yes, that 21.5% rate is skewed. That's why the government does not use it as a measure of unemployment.

That's exactly right. There are employers all over this country who can't even fill their open positions today. Knowing that, I'd suggest that the vast majority of the unemployed people in this country fall into one of two categories:

1. They aren't interested in working because they don't need to work for a living (i.e., retirees).

2. They are unemployed because they are unemployable for one reason or another.

[Manly Warrior]

So, 102 million working age not employed, golly, there are only 315 million in the USA, so, discount retired and underage, wouldn’t that be about the total working age population of the country? Numbers seem way out of proportion. No?