The unemployment rate and the damage it does to statistics (BLS tries to bamboozle Americans)

washington Examiner ^ | 2/4/2012 | Matthew Reece

[tobyhill]

The Bureau of Labor Statistics reported on Friday that the official unemployment rate for January was 8.3%, down from 8.5% in December. There were also 243,000 net jobs added during the month of January. But what does this really mean? Let us explore how this is calculated.

The BLS keeps track of six unemployment rates, which are defined as follows: U1: Persons unemployed 15 weeks or longer, as a percent of the civilian labor force. This rate is 4.9% for January 2012. U2: Job losers and persons who completed temporary jobs, as a percent of the civilian labor force. This rate is 4.7% for January 2012. U3: Total unemployed, as a percent of the civilian labor force (official unemployment rate). This rate is 8.3% for January 2012. U4: U3 plus discouraged workers, as a percent of the civilian labor force plus discouraged workers. “Discouraged workers” are those who have stopped looking for work because current economic conditions make them believe that no jobs are available. This rate is 8.9% for January 2012.

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The use of the U3 as the official definition exposes some holes in the BLS's thinking, because by them, the following are true: A person who loses a full-time job but spends one hour each week mowing a lawn for pay is considered employed. A person who simply expresses interest in having a job is classified as unemployed. “Discouraged workers” are not classified as unemployed or even as part of the labor force.

[autumnraine]

The government considers you ‘employed’ if you only work ONE hour (even babysitting) for pay in the entire ‘reference week.’

[mc5cents]

File under: Lies, damned lies and statistics.

[SunkenCiv]

It’s never a surprise that Zero and his administration can produce phony documents to order. Thanks tobyhill.

[RedMDer]

All contributions are for the Current Quarter Expenses.

[khelus]

"It also means that the U3 rate will go down when people give up looking for jobs, as a record 1,177,000 people did in January"

Another interesting piece of information is that the 1,177,000 number is 'seasonally adjusted'. If you look at the raw numbers in table a-1, the number is 1,522,000.

Worse yet, the vaunted job creation of 243,000 from table b-2 is the result of the raw number of -2,689,000 {yes that's negative 2,689,000) being adjusted by both the Birth and Death model and seasonal adjustment.