The Real Economic Numbers: 21.5% Unemployment, 10% Inflation And Negative Economic Growth

TEC ^ | 06/12/2018 | Michael Snyder

[SeekAndFind]

Every time the mainstream media touts some “wonderful new economic numbers” I just want to cringe. Yes, it is true that the economic numbers have gotten slightly better since Donald Trump entered the White House, but the rosy economic picture that the mainstream media is constantly painting for all of us is completely absurd. As you are about to see, if honest numbers were being used all of our major economic numbers would be absolutely terrible. Of course we can hope for a major economic turnaround for America under Donald Trump, but we certainly are not there yet. Economist John Williams of shadowstats.com has been tracking what our key economic numbers would look like if honest numbers were being used for many years, and he has gained a sterling reputation for being accurate. And according to him, it looks like the U.S. economy has been in a recession and/or depression for a very long time.

Let’s start by talking about unemployment. We are being told that the unemployment rate in the United States is currently “3.8 percent”, which would be the lowest that it has been “in nearly 50 years”.

To support this claim, the mainstream media endlessly runs articles declaring how wonderful everything is. For example, the following is from a recent New York Times article entitled “We Ran Out of Words to Describe How Good the Jobs Numbers Are”…

The real question in analyzing the May jobs numbers released Friday is whether there are enough synonyms for “good” in an online thesaurus to describe them adequately.

So, for example, “splendid” and “excellent” fit the bill. Those are the kinds of terms that are appropriate when the United States economy adds 223,000 jobs in a month, despite being nine years into an expansion, and when the unemployment rate falls to 3.8 percent, a new 18-year low.

Doesn’t that sound great?

It would be great, if the numbers that they were using were honest.

The truth, of course, is that the percentage of the population that is employed has barely budged since the depths of the last recession. According to John Williams, if honest numbers were being used the unemployment rate would actually be 21.5 percent today.

So what is the reason for the gaping disparity?

As I have explained repeatedly, the government has simply been moving people from the “officially unemployed” category to the “not in the labor force” category for many, many years.

If we use the government’s own numbers, there are nearly 102 million working age Americans that do not have a job right now. That is higher than it was at any point during the last recession.

We are being conned. I have a friend down in south Idaho that is a highly trained software engineer that has been out of work for two years.

If the unemployment rate is really “3.8 percent”, why can’t he find a decent job?

By the way, if you live in the Boise area and you know of an opening for a quality software engineer, please let me know and I will get the information to him.

Next, let’s talk about inflation.

According to Williams, the way inflation has been calculated in this country has been repeatedly changed over the decades…

Williams argues that U.S. statistical agencies overestimate GDP data by underestimating the inflation deflator they use in the calculation.

Manipulating the inflation rate, Williams argues in Public Comment on Inflation Measurement , also enables the US government to pay out pensioners less than they were promised, by fudging cost of living adjustments.

This manipulation has ironically taken place quite openly over decades, as successive Republican and Democratic administrations made “improvements” in the way they calculated the data.

If inflation was still calculated the way that it was in 1990, the inflation rate would be 6 percent today instead of about 3 percent.

And if inflation was still calculated the way that it was in 1980, the inflation rate would be about 10 percent today.

Doesn’t that “feel” more accurate to you? We have all seen how prices for housing, food and health care have soared in recent years. After examining what has happened in your own life, do you believe that the official inflation rates of “2 percent” and “3 percent” that we have been given in recent years are anywhere near accurate?

Because inflation is massively understated, that has a tremendous effect on our GDP numbers as well.

If accurate inflation numbers were being used, we would still be in a recession right now.

In fact, John Williams insists that we would still be in a recession that started back in 2004.

And without a doubt, a whole host of other more independent indicators point in that direction too. The following comes from an excellent piece by Peter Diekmeyer…

Williams’ findings, while controversial, corroborate a variety of other data points. Median wage gains have been stagnant for decades. The U.S. labour force participation rate remains at multi-decade lows. Even our own light-hearted Big Mac deflator suggests that the U.S. economy is in a depression.

Another clue is to evaluate the U.S. economy just as economists would a third world nation whose data they don’t trust. They do this by resorting to figures that are hard to fudge.

There, too, by a variety of measures—ranging from petroleum consumption to consumer goods production to the Cass Freight Index—the U.S. economy appears to have not grown much, if at all, since the turn of the millennium.

In the end, all that any of us really need to do is to just open our eyes and look at what is happening all around us. We are on pace for the worst year for retail store closings in American history, and this “retail apocalypse” is hitting rural areas harder than anywhere else…

This city’s Target store is gone.

So is Kmart, MC Sports, JCPenney, Vanity and soon Herberger’s, a department store.

“The mall is pretty sad,” says Amanda Cain, a teacher and mother. “Once Herberger’s closes, we’ll have no anchors.”

About two-thirds of Ottumwa’s Quincy Place Mall will be empty with Herberger’s loss.

Of course it isn’t just the U.S. economy that is troubled either.

We are living in the terminal phase of the greatest debt bubble in global history, many nations around the globe are already experiencing a very deep economic downturn, and our planet is literally in the process of dying.

So please don’t believe the hype.

Yes, we definitely hope that things will get better, but the truth is that things have not been “good” for the U.S. economy for a very, very long time.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

[kanawa]

Other folks have done a much better job of criticizing it than I would have been able to.

[Cen-Tejas]

same here, I can’t find an assistant for 25 bucks an hour. My last one quit after nearly 5 years to move back to Louisiana. She was great but encountered horrible personal problems not her fault.

Going to try again, soon.

[Cedar]

“SSDI became a career path during the Obama years. Not a good thing.”

So true. A neighbor’s son got a check and sat around smoking pot, playing games on the computer, lived with his girlfriend who also got a check. Some of his friends did too, all on SSDI. And I’m talking about people in their forties!

[grey_whiskers]

There are scads of employers with their heads up so far their own ass that they lick their own pyloric valve from below. Regularly.

I could cite specific examples I've seen in my travels, but why make enemies?

Aside from the usual "We require 5 years in Java" when Java had only been out for two years, companies and/or recruiters firing wildly mismatched job offers (with a PhD and fully employed, I've been sent email recruitments for $18/hr jobs driving a forklift)...not to mention Silicon Valley and Seattle (Carly Fiorina's "No American has a right to a job!" and the CEO of Microsoft being a dot not feather).

[CommieCutter]

Also don’t forget SHTF plan news! 😂

[CommieCutter]

Well construction is booming.

[central_va]

We export food and jobs and wonder what is the problem...

[9YearLurker]

Shadowstats.com is a well-known and reputable source. In fact, Trump referred to his numbers when Obama was president.

Yes, things have improved since Trump became president, cut regulations, and got some tax cuts through.

But it is a misstatement to claim that things are better than ever, than they’ve been in 40 years, etc.

And that inflation number should be taken very seriously. It’s been going on for some time and has really wiped out earnings for our lower-end workers.

Consider these real numbers and you see how much worse low-skill illegal and legal immigration has been for those workers. Yet, with Trump’s blessing, the Congress is poised to pass the biggest amnesty bill in history as early as Monday next week—done under cover of this big news week, but again with the WH’s blessing.

[Right Wing Assault]

I’m not saying the website is unreliable. It’s the way unemployment is calculated now and for a number of years. The below is from this website:

In May 2018, the real unemployment rate (U-6) was 7.6 percent. It’s double the widely reported unemployment rate (U-3) of 3.8 percent. Here’s how to calculate both.

Step 1. Calculate the official unemployment rate (U-3).

U-3 = 6.065 million unemployed workers / 161.539 million in the labor force = 3.8 percent.

Step 2. Add in marginally attached workers. There were 1.455 million people who were marginally attached to the labor force. Add this to both the number of unemployed and the labor force.

U-5 = (6.065 million + 1.455 million) / (161.539 million + 1.455 million) = 7.520 million / 162.994 million = 4.6 percent.

Step 3. Add in part-time workers. There were 4.948 million people who were working part-time but would prefer full-time work. Add them to the unemployed with marginal workers. They’re already in the labor force.

U-6 = (7.520 million + 4.948 million) / (162.994 million) = 12.468 million / 162.994 million = 7.6 percent. (Source: “Table A-15,” Bureau of Labor Statistics.)

[9YearLurker]

Of course it is. We have changed our processes to understate both inflation, overstate growth, and understate inflation.

That’s the whole point.

And, as I said, Trump is well aware of it and quoted the “real” numbers during the campaign. His policies are unquestionably helping our economy, but claiming historical bests is misleading.

[grey_whiskers]

There are software companies in Idaho?

That can be part of the problem.

You can be brilliant in your field but if you are not where they are hiring you will not be able to get a job.

See, this is why management is fundamentally evil and dishonest.

They undermine the employment prospects of an entire generation of US-born tech workers, and then blame *prospective* workers for not proactively uprooting their entire lives for the *chance* at a job hundreds of miles from where they used to live, or from other prospective employers; with less security if hired, and at lower pay than prior generations have had in the same field: and with a virtual guarantee of being frozen out of employment at age 45.

Thus completing the self-fulfilling prophecy about "jobs Americans won't do."

Every last one of those managers should be exiled to Tibet or to the former South Africa.

After having all their worldly goods (including any type of cell phone or communication device) seized.

Then we can complain about the lack of initiative of US managers and slash the pay of the remaining ones.