May 26, 201610 yr I’m going to go through this again. Our current quoted unemployment rate is 5.0%. You can see all the relevant data here … http://www.bls.gov/news.release/pdf/empsit.pdf It’s the most recent release from the Bureau of Labor Statistics for April 2016. Our current civilian population is 252,969,000. Our current civilian labor force is 158,924,000. So the current “participation rate” is 62.8% (158,924,000/252,969,000). Current number of officially unemployed is 7,920,000, which equates to the 5% rate (7,920,000/158,924,000). The problem with the current official unemployment rate is that it excludes 8,000,000 Americans that have been unemployed so long that the government doesn’t even bother counting them in the official unemployment rate any more. They’ve excluded them gradually over the last few years as you’ll see in the graph at the following site: You can go to this link at BLS site and see the historical participation rate… Notice: Data not available: U.S. Bureau of Labor Statistics I think the graph defaults to 2006-2016 range but you can input a different starting year. I used 1980. You’ll see that the employment build up during the Reagan administration and a bit more during the Clinton administration, driving the participation rates to 67%. It leveled out at 66-67% from 1988 through 2008. During President Bush’s terms, the participation rate dropped 1 percentage point, from 67% to 66%. During President Obama’s terms it’s dropped from 66% to the current 62.8%. Each 1% drop in participation rate = 2.5 million more unemployed citizens who are no longer counted as officially unemployed, though they are obviously still unemployed. As noted above, currently at 62.8% participation, the labor force is 158,924,000. If we were still at 66% participation, the labor force would be 166,959,540. So there are 8,035,540 unemployed people that are not being counted as officially unemployed. They were being counted, but no longer. Though our official unemployed number per BLS is 7,920,000, we really have 15,955,540 unemployed which equates to a 9.6% unemployment rate (15,955,540/166,959,540). It’s really worse than it seems. The fact that 8 million people have basically given up looking for work is very disheartening. For some comparison data, I pulled the January 2009 BLS report. When President Obama took office, the official number of unemployed was 11,616,000. Taking into consideration the drop in participation rate during the Bush administration (67% to 66%), the total unemployed was 13,962,810 (that’s me using the same methodology I used earlier). So by my count unemployment was 14 million when the current President took office and it’s 16 million now. In fairness to President Obama, he couldn’t get the ship turned around that quickly. His first year he was still absorbing the effect of the housing crash, etc. So using the data from the start of his second year (January 2010), the total officially unemployed was 14,837,000. Adding in 1.3% of lost participation, the total unemployed at that time was 17,917,000. So in trying to be fair, I’d say President Obama’s starting point was 18 million unemployed and now we have 16 million unemployed. So it appears there’s been a gain. Just much more modest than it appears on the surface.
May 26, 201610 yr Author My original link doesn't appear to work. So here's the participation rate graph that appears on the BLS site. It's 1980 to current.
May 26, 201610 yr Related: US Government Quietly Cuts Historical Capex Data By Billions Of Dollars | Zero Hedge They basically have been fudging the data that drives GDP for a few years. That made previous years looking better than actual. And now they are 'fixing' it. It will actually make the current re-recession look better. ".. and, worse, the government just confirmed what many had said for years, namely that capex spending had been far lower than reported all along when it revised the capital goods orders nondefense ex-aircraft series lower by a whopping 6%, taking down the March print from $66.9 billion to only $62.4 billion, the lowest absolute number since early 2011." "...The forecast for second-quarter real gross private domestic investment growth increased from -0.3 percent to 0.4 percent following this morning's durable manufacturing release from the U.S. Census Bureau." Oddly not a word about the sharp revisions to the core data." And that, boys and girls, is how a double dip recession is avoided in an election year....
May 26, 201610 yr For what it's worth, the unemployment rate and the labor participation rate are different things. I know that's obvious but it's an important distinction. The unemployment rate is calculated based on surveys determining how many people are seeking work and aren't finding it. That's the number that's being compared across time. The labor participation rate is related, but it's still a fundamentally different thing. The 2008 crisis was an obvious shock to the participation rate, with it dropping from about 66% in 2008 to around 63% now, but that doesn't necessarily mean the unemployment rate should be higher. How many spouses decided to stay home in the wake of the crisis? How many baby boomers retired early instead of starting a new career after 2008? How many baby boomers have since retired as planned? (That generation began reaching retirement age over five years ago.) These are all things that would impact the participation rate but not the unemployment rate. You can't simply add participation to the unemployment rate and get the "real" unemployment rate, especially to compare it to historic rates. I do think the unemployment rate is an imperfect measure of economic health and that there is more digging to do. For instance, it seems the job market for millennials is dire, while macroeconomic indicators like GDP, stocks, and the unemployment rate have all improved since the 2008 nadir. That seems to indicate something is going on.
May 26, 201610 yr The U6 unemployment rate is really the measure you seem to want and is comparable over time (at least to 1995). Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons - FRED - St. Louis Fed
May 26, 201610 yr I'm always interested to see how the numbers can be manipulated for desired effects.
May 26, 201610 yr Author I'm familiar with the U6 rate but it understates what has happened and what is still happening. You can look at the official unemployment rate at any time from 1988 and 2008 and you're getting pretty close to an apples-to-apples comparison. You can't do that now. Those people are no longer employed. Some may want to chalk it up to 8 million people just deciding they no longer need to work. But that's dubious. Clearly.
June 3, 201610 yr Why Work when the govt will provide for you ? You can kill your self and make a medium amount or do nothing and claim back injury or I'm a nut and get by with enough to be comfortable .
June 3, 201610 yr And anyone who can argue that the democrat party doesnt drive the process is being intellectually dishonest . If it involves give aways or getting more time off the job via a variety of ways you can bet the D's are all for it .
June 4, 201610 yr More from ZH: The Funniest BLS Report Ever | Zero Hedge Image of charts in article above:
June 4, 201610 yr Why Work when the govt will provide for you ? You can kill your self and make a medium amount or do nothing and claim back injury or I'm a nut and get by with enough to be comfortable . Pride in yourself
June 4, 201610 yr The thing is, many who are on assistance ARE working. And a good chunk are young kids or the elderly and disabled who cannot work. Sure there are people taking advantage of the system. And they need to found and dealt with. But even those aren't getting rich off public assistance. In most cases it's barely enough to survive.
June 4, 201610 yr The thing is, many who are on assistance ARE working. And a good chunk are young kids or the elderly and disabled who cannot work. Sure there are people taking advantage of the system. And they need to found and dealt with. But even those aren't getting rich off public assistance. In most cases it's barely enough to survive. You really need to go to your local Judicial Center and sit through court several days. The number of healthy looking 25-35 y.o. that are on disability is staggering. Just in the small town I live in it's ridiculous. What are most of them on disability for? Secondary emotional problems caused by alcoholism or drug addiction. Those that aren't on for that it's a "back problem". I have had two back surgeries, two knee surgeries, had to retire from one job due to those injuries but still work part time. I'm sure these "disabled" people could do the same. The abuse of the system is more widespread than you think.
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