Is The Government Misrepresenting Unemployment By 32%?

Zero Hedge ^ | 1/1/10 | Tyler Durden

[FromLori]

There is an old saying, "when in doubt follow the money." These days investors have lots of doubt about pretty much everything (if not so much money). And with data from the government increasingly bearing the Quality Control stamp of approval of the Beijing Communist Party, there is much doubt in store courtesy of an administration which will stop at nothing in its competition with China as to who can blow the biggest asset bubble the fastest, data integrity be damned. Undoubtedly, of all government released data, the most important is, and continues to be, anything relating to unemployment. This is precisely where the government's propaganda armada is focused. Yet in matters of (un)employment, the ultimate authority is, luckily, the Treasury, and not the Fed. "Luckily," because when it comes to making money "difficult to follow" Tim Geithner's office still has much to learn. Which is why when we looked at the Daily Treasury Statement data we were very surprised: because it indicates that the government could be underrepresenting employment data by up to 32%!

The suddenly very prominent topic of Unemployment Insurance, whether it pertains to Initial Claims or to Emergency Unemployment, has one very useful characteristic: it is based on "money", specifically money outflows from the US treasury which goes to fund the weekly "paychecks" of those that have not been in the workforce for well over a year. And as pointed out earlier, money can be followed. The US Treasury presents a daily in and outflow of all money sources in the Daily Treasury Statement prepared by the Financial Management Service. And in the plethora of data presented here, probably the most relevant and useful data series is the Withdrawals quantified in the form of Unemployment Insurance Benefits.

[Secret Agent Man]

Yeah, I wouldn’t want him as governmor, but I’d like him as a senator. We need Walker in as governor and I think he’ll do it as Barrett doesn’t even want to be running in the first place.

[Bean Counter]

Mort Kondracke made a comment the other day, that the economy would have to grow 250,000 jobs a month for five years just to get back to where we were in late 2007, and we are nowhere near to growing that many jobs, nor is there any indication that there will be any time soon, either.

I find it very interesting that these numbers started to diverge in December 2008...go figure!

[Freedom_Is_Not_Free]

This will be a depression for many people, not from high unemployment magnitude, but from long duration of unemployment. The unemployed won’t be finding jobs, will burn through savings and then through saleable assets, and will then need help from family and friends to bridge whatever the government doesn’t provide.

Duration of unemployment will mark this depression.