Real e Finance means business
Why the U.S.
Unemployment
Numbers Can't
Be Trusted
December, 2th,
2011
Unemployment
Numbers Can't
Be Trusted
December, 2th,
2011
There is more fantasy in the U.S. employment numbers than in a Harry
Potter novel. According to the BLS, the U.S. added 120,000 jobs in
November 2011 and the unemployment rate fell by 0.4%. This is not
possible.
The U.S. economy needs to create approximately 150,000 jobs a month to
keep the unemployment rate steady based on new entrants into the labor
force (the oft cited 200,000 figure is based on past conditions that are no
longer applicable). According to official sources, the U.S. added 131,000
jobs a month in 2011. This is better than in previous years, but still not
enough to reduce the unemployment rate. Yet, the BLS (Bureau of Labor
Statistics) claims the unemployment rate is dropping and fell from 9.0% to
8.6% in November. How is this possible?
Well, first of all, it isn't. These numbers were created — and "created" is a
very appropriate word in this case — by claiming that large numbers of
workers left the U.S. labor force. At the same time, the U.S. government has
stated that an economic recovery has takien place. A country's labor
force does not shrink during recoveries, it grows. This has not happened
during the current U.S. "recovery".
The U.S. labor force had approximately six million fewer workers in
November 2011 than it did in November 2007. Four years ago, 146,793,000
people were employed in the U.S. In November 2011, only 140,987,000
had jobs. This makes no sense if a recovery has taken place. It does make
sense however if there is an ongoing recession and government
statisticians have decided to massage the numbers for political reasons.
On the flip side, there were 79,069,00 people not in the labor force in
November 2007 and today that number is 86,757,000 — almost eight
million greater. The labor force of the U.S. should not be shrinking because
the number of students and immigrants looking for jobs exceeds the
number of people retiring. People do leave the labor force though if they
have determined that there simply are no jobs to be found. The recent
Consumer Confidence survey from the Conference Board indicated that
less than 6% of Americans thought jobs were currently plentiful.
In November 2011 alone, the BLS claims that the U.S. labor force dropped
by almost a net 600,000. This helped reduce the reported unemployment
rate to 8.6%. This form of statistical manipulation is something that might
be expected in a corrupt third-world backwater. Apparently, this is the
standard that Washington is now adhering to for its statistical reporting.
Disclosure: None
Author: "Inflation Investing - A Guide for the 2010s"
Daryl Montgomery
Potter novel. According to the BLS, the U.S. added 120,000 jobs in
November 2011 and the unemployment rate fell by 0.4%. This is not
possible.
The U.S. economy needs to create approximately 150,000 jobs a month to
keep the unemployment rate steady based on new entrants into the labor
force (the oft cited 200,000 figure is based on past conditions that are no
longer applicable). According to official sources, the U.S. added 131,000
jobs a month in 2011. This is better than in previous years, but still not
enough to reduce the unemployment rate. Yet, the BLS (Bureau of Labor
Statistics) claims the unemployment rate is dropping and fell from 9.0% to
8.6% in November. How is this possible?
Well, first of all, it isn't. These numbers were created — and "created" is a
very appropriate word in this case — by claiming that large numbers of
workers left the U.S. labor force. At the same time, the U.S. government has
stated that an economic recovery has takien place. A country's labor
force does not shrink during recoveries, it grows. This has not happened
during the current U.S. "recovery".
The U.S. labor force had approximately six million fewer workers in
November 2011 than it did in November 2007. Four years ago, 146,793,000
people were employed in the U.S. In November 2011, only 140,987,000
had jobs. This makes no sense if a recovery has taken place. It does make
sense however if there is an ongoing recession and government
statisticians have decided to massage the numbers for political reasons.
On the flip side, there were 79,069,00 people not in the labor force in
November 2007 and today that number is 86,757,000 — almost eight
million greater. The labor force of the U.S. should not be shrinking because
the number of students and immigrants looking for jobs exceeds the
number of people retiring. People do leave the labor force though if they
have determined that there simply are no jobs to be found. The recent
Consumer Confidence survey from the Conference Board indicated that
less than 6% of Americans thought jobs were currently plentiful.
In November 2011 alone, the BLS claims that the U.S. labor force dropped
by almost a net 600,000. This helped reduce the reported unemployment
rate to 8.6%. This form of statistical manipulation is something that might
be expected in a corrupt third-world backwater. Apparently, this is the
standard that Washington is now adhering to for its statistical reporting.
Disclosure: None
Author: "Inflation Investing - A Guide for the 2010s"
Daryl Montgomery
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Guide' is meant to help
educate people on how
to make profitable
investing choices in the
current economic
environment. We have
coined this term to
describe the current
monetary and fiscal
policies of the U.S.
involve unprecedented
money printing. This is
the official blog of the
New York Investing
meetup.
Economics Investing
Guide' is meant to help
educate people on how
to make profitable
investing choices in the
current economic
environment. We have
coined this term to
describe the current
monetary and fiscal
policies of the U.S.
involve unprecedented
money printing. This is
the official blog of the
New York Investing
meetup.
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