Skip to comments.The Truth About The Falling Unemployment Mirage In 3 Charts
Posted on 12/02/2011 4:34:24 PM PST by blam
The Truth About The Falling Unemployment Mirage In 3 Charts
Mike "Mish" Shedlock
Global Economic Trend Analysis
Dec. 2, 2011, 6:14 PM
In Unemployment Rate Dips to 8.6% as 487,000 Drop Out of Labor Force I presented some quick facts on the drop in the unemployment rate.
In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000. In November, those "Not in Labor Force" rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed. Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%. Labor Force and Unemployment Rate Adjusted for Population Growth
Reader Tim Wallace responded with a very nice set of graphs and commentary. Wallace writes ...
In the entire history of the labor force data, only in 1951, 1961, 1964, and 2009 did the labor force "shrink". It also "shrank" in 2011 off 2010. Also note that from 1964 to 2007, only in 1991 at 631,000, 1995 at 723,000 and 2002 at 801,000 did the labor force fail to add more than 1,000,000 people.
However, in 2008 the labor force only expanded by 776,000. This was followed by a loss of 826,000 in 2009, a trivial gain of 155,000 in 2010 and a loss of 67,000 in 2011.
If you look at the average labor force growth from 1948 to 2007 of 1,579,000 the labor force should have expanded by 6,316,000 2008-2011. Instead the labor force expanded by a mere 38,000!
Thus, 6,278,000 people are unaccounted for in the unemployment numbers based on historical averages.
The final graph takes the adjusted data and calculates the unemployment number
(Excerpt) Read more at businessinsider.com ...
A Closer Look at Unemployment: Did it REALLY Fall to 8.6%? More People Dropped Out of Labor Force Than Jobs Added AND Wage Income Fell
It doesn’t matter if 8.6% number is built on bogus or manipulated data, or the fact that so many people have just given up and the government no longer counts them in the work force.
The liberal media is already running with the number and isn’t interested in any information that doesn’t puff numbers up and make Obama look good.
So the guy and gal who get their news from the liberal media have no idea that the reduced rate is just more lies and subterfuge by the administration, supported by the liberal media.
You don't have to be an economist or statistician to recognize BS numbers.
Pre NEA elementary school math would tell you 120,000 new jobs could NOT have really decreased the number unemployed in the US workforce by 0.4% - unless the total US workforce was ONLY 30 million.
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