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| Why U.S. Unemployment Numbers Can't Be Trusted |
| 2011-12-02 |
| 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steady based on new entrants into the labor force (the oft cited 200,000 figure is based on past conditions that are no longer applicable).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 taken place. A country's labor force does not shrink during recoveries, it grows. This has not happened during the current U.S. "recovery." |
| Posted by:tipper |
| #4 The entrepreneurs are still out there. The problem is: lack of start-up, inventory and payroll loan capacity. And stock market players are scared to re-enter, given the general stagnation. |
| Posted by: Clem Unort1053 2011-12-02 19:42 |
| #3 You forgot the pic. |
| Posted by: gorb 2011-12-02 15:03 |
| #2 I'll believe in a 'recovery' when I see it. The original Great Depression stumbled along for years, then all the banks in the USA closed, and private ownership of gold was criminalized and upheld by the US Supreme Court. My view of the future matches this, copied & pasted from Zerohedge: US data is showing only a temporary improvement with the forthcoming fiscal drag into next year likely to slow the economy to a practical standstill. Noting that 'The worst is ahead of us' he sees the implications of the hard-default he expects for Greece in early 2012 (that is not priced into the market) as very concerning with a cluster of defaults more than possible. Uncomfortably viewing the banking sector as a curse (and not a cure) for our problems, he sees the Japanese Zombie bank experience playing out which guarantees sustainable growth is not around the corner and suggests we would be far better off medium-term if bank defaults occurred and the painful medicine is taken now. The banking sector risks the threat of taking down governments... |
| Posted by: Anguper Hupomosing9418 2011-12-02 14:28 |
| #1 employment numbers come from the employer survey unemployment percentage comes from the household survey Many times these two surveys (both by the BLS) are inconsistent. That's the way surveys are. The employer survey is closer to a good sample but it doesn't include self employed and small biz. Another problem with both surveys is figuring out what the seasonal adjustment should be. A third problem is the monthly migration of people between full employment, part time employment and non employment. That is why a crucial comparison is to compare month in year x with the same month in year x-1. If you do that you see that employment has increased a bit and the unemployment rate has decreased a bit. Not a robust recovery or even an average one but still a recovery. |
| Posted by: Lord Garth 2011-12-02 13:38 |