Saturday, December 05, 2009

Don't believe today's "good news"

Officially, the unemployment level dropped .2% with this morning's monthly jobs report.

This conclusion seemingly indicates the US finally picked up some jobs. This is not the case. The official government statistics actually state that the US lost jobs (and presumably added people). Yet, the government is telling us that the unemployment rate is actually lower. Read it yourself, if you'd like.

Here's an excerpt from an explanation of the cooked numbers:

"Unemployment dropped by .2% even though 11,000 jobs were lost and it should take at least 100,000 jobs just to keep up with demographics. Instead note the drop in the civilian labor force by 98,000.

Moreover, those "not in the labor force rose by 291,000 constituting nearly all of the decline in unemployment." -Mish Shedlock

People "not in the labor force" include unemployed people who want to work, but who haven't looked for work in the last 4 weeks. This is often because they can't find a job, and eventually give up. It also happens when new graduates emerge from campus like Punxsutawney Phil, look around, see the shadow of the financial crisis and decide to go back underground to graduate school.

These people don't count toward the unemployment rate. This is like the government "reducing crime rates" by legalizing robbery.

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