DJH: I woke up today to read the headline – “the unemployment rate has held steady at 9.7%.” Okay, sounds good, and I decided to read the rest of the story to get a douse of good economic news!
What’s this? It looks like the workforce shed 36,000 jobs – how on earth can the unemployment rate stay the same when 36,000 Americans got their pink slips?
Then, I decided to go back to the January numbers and see if the same thing happened then and it did. The US economy lost another 26,000 jobs in December. How does the unemployment rate go down while the number of unemployed keeps going up?
I kept digging and discovered this editorial in the Washington Times that brought up “the elephant in the room:”
The president claimed the first stimulus package already “created or saved” more than half of the 3.5 million jobs it was vowed to rescue. But it’s hard to see where those jobs are when examining the numbers in the Department of Labor’s household survey, which is used to measure the official unemployment rate. The number of people with a job fell by 589,000 in December. On top of that job loss, the number of people no longer in the labor force grew by an astounding 843,000 from November to December.
The Massive Growth in Discouraged Workers
The one economic statistic that Obama’s economic program continues to knock out of the park is something called the discouraged worker. The Atlantic just reported:
There were more than 1.2 million discouraged workers in February. That’s a 50% increase since October — in just four months. These workers aren’t reflected in the 9.7%…
What’s The Real Unemployment Rate?
John Russo is the co-director of the Center for Working-Class Studies and coordinator of the Labor Studies Program at Youngstown State University’s Williamson College of Business Administration. His gripe is that the measure should be even broader. He has come up with something he calls the de-facto unemployment rate.
By Russo’s calculations, the current unemployment rate is really more than 31 percent. In addition to U-6 measures, it takes into account such factors as increases in early retirement, the prison population and government programs for low-income people.
“You have to look at people who are out of the labor market for other reasons,” he said. “Maybe they are in the military because there are no jobs. We know that there is an increase in a lot government aid because people have lost their jobs. If you talk to prison reform people, they will tell you there are a lot people who are in prison who wouldn’t be in prison if it were not for the recession.”
Source: cleveland.coml
So, from where I sit, Obama’s reported 9.7% unemployment rate is worst than just Hooey, it’s a cruel lie to a nation that trusted him to deliver on the hope he promised.
Dave
It looks like the unemployment rate is staying the same or going down, because they don’t tell you about the million + people a month that are losing benifits, mine runs out this month with everyone else that worked at Circuit City. So looks like numbers will be down again.
[…] have private sector unemployment nearing the levels of the great depression (the true number is 17% not 9.7%). Massive tax increases on private sector businesses will make this worse and keep it there for a […]
[…] I have written several times about the phony jobs number that the government reports each month(Is Anyone Buying This 9.7% Unemployment Rate Hooey?) Since 1992, the fed has been using a category called “Discouraged Workers,” to make the […]