Some Truth About 8.6% Unemployment

By Chris W
The Libertarian Patriot

It should come as no surprise that Leviathan is adept at manipulating statistics to make thing seem not as bad as they really are and unemployment is one of them.

As we saw on Friday with the release of the latest unemployment numbers by the BLS, things are getting better. But are they?

The mediots and Obama apologists are quick to point out that the economy "gained" 120K jobs last month, but if you dig a little deeper you will see that of the 120K jobs "gained", 50K (42%) were in the retail and 22K (18%) were in the hospitality industry or McJobs. So you can see that a full 60% of the "gains" were in low paying, service industry jobs. And you'll never guess what jobs are most affected when consumer discretionary spending drops.

What's equally telling is that manufacturing jobs continue to show no growth and these are the jobs that matter since they show the true health of our economy.

Another reason in the 0.4% drop is that 315K people just gave up and stopped looking for work last month. Factor in those who have stopped looking for work and the U-4 rate is 9.3%. Sure, that's also an improvement, from last year's 10.5% but is this U-4 number is a better indicator of the unemployment picture?

But let's really turn thing on it's head and you will see why this is all smoke and mirrors.

Two figures that are not often mentioned are the Employment-Population Ratio and the Civilian Participation Rate.

Looking at the charts (courtesy of the St Louis Fed) below of these metrics from November 1971 to present, you can see that any gains in the overall percentages of US workers employed over the last 30 years have essentially been wiped out with no relief on the horizon. Welcome back to 1980 America.

Civilian Participation Rate 11/71-11/11


Employment-Population Ratio 11/71-11/11

So as you can see, there are lies, damn lies and statistics.

We are in big trouble as a nation and until Leviathan is held accountable for it's destruction of our economy we are destined to see the end of what the pundits and politicians like to refer to as American Exceptionalism.

4 comments:

  1. Excellent summary, but come on the Obama regime would never deviate from the whole truth!

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  2. Ok. Maybe I am slow. Just precisely now, what is the "some truth" about 8.6% unemployment? Personally, I am find "none truth." Just as I did on Friday.

    This is what happens when you "wite out" 6.2 million people.http://thecivillibertarian.blogspot.com/2011/12/six-million-people-subjected-to-wite.html

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  3. As the clock ticks... And the world gets smaller....

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  4. The statements in this post are mostly true, and the Obama Administration was quick to take credit, but this is hardly top secret information. It may not be widely known information, but BLS publishes U-4 through U-6 regularly. Those broad measures are high, but they are falling from peaks several quarters ago.

    There are persistent misconceptions that the unemployment rate falls when people are no longer eligible for benefits. It's baloney, and always has been. The unemployment rate is calculated through a household survey, not by continuing unemployment claims.

    I dispute that manufacturing jobs represents the true measure of economic health. Productivity in manufacturing has been increasing, such that fewer workers can produce more output. Indeed, manufacturing employment has been on a long downward slide for decades, but manufacturing output has been increasing.

    It is true that most of the new jobs added are relatively low paying. That's fairly normal early in a recovery. It's a source of wage flexibility as sectors reorient and reorganize. High-value, high-wage jobs won't return until later in the recovery.

    The economy has to add about 150,000 jobs a month to nudge unemployment downward, so job additions have been weak. However, the bright spot is that stronger gains in the private sector were offset by losses in local government employment. Unfortunately, that might involve teachers, police, and fire fighters. Their own fault for union wage premiums.

    The declining labor participation rate and employment to population are worrisome, but they are affected by demographics. Looking at the prime working age population, the drop is not as strong. Teenagers and older folks are leaving the labor force.

    I agree there is no reason to party based on this information, and even less evidence that any of Obama's policies have anything to do with it. In fact, things began to get worse the moment the fiscal "stimulus" money ran out. It wasn't stimulating at all, but rather maintained consumption for a brief period and at high cost.

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