“Some things just don’t make sense to me. The initial jobless claims report comes out every week with 400,000+ new claims. We are told (every week), that the number must be significantly below 400,000 if we are to have a stable job market. Then the monthly unemployment number comes out and it remains stable (albeit high). ???”
The statistic is manipulated from the get-go. The UE rate is the number of people actively seeking jobs divided by the number of people in the labor force. OK, here’s your manipulation: If someone runs out of their 99 weeks (used to be 26) of UE benefits, BY DEFINITION they are not actively seeking a job AND are not part of the labor force (yet there is no money coming in for that person/family to put food on the table). Someone who gets discouraged after X number of months looking for a job and stays at home eating popcorn is also not in the labor force. The guy who lost a $75,000/year job and replaced it with a $12/hour, 20-hour/week job with no benies, just to have something coming in IS counted as employed - despite having their wages cut to about 1/6 of his original compensation (not including the lost benies).
Note that the UE number reported is known as “U3.” This is a different number than the way it used to be calculated. There are 2 measures that more accurately measure UE: first is “U6,” which is a broader measure (by the Labor Dept) of unemployment. That figure is over 16%. Then there is the Shadow Government Statistics (SGS) alternative number which attempts to measure UE as the government measured it before the Clinton Administration defined long-term unemployed people out of existence (and there was manipulation, to a lesser extent, before that). Presidents of both parties are guilty of messing with the GDP, inflation and UE statistics. See http://www.shadowstats.com/article/primers_intro and http://www.shadowstats.com/alternate_data/unemployment-charts for an introduction.
FYI, the SGS measure of UE is now around 23% - that’s what the UE rate would be right now if we measured it the way it was only about 17 years ago. That’s a DEPRESSION!
With 40-some million on food stamps (bread lines?) and 311 million total population, back of the envelope says 13% right there.
I understand there’s all kinds of puts and takes and whatnot. But consider all the folks between the food stamp and a full-time job, and that percentage has to be much higher.
Every month this apparently has to be explained. So let’s explain it again
Non-farm payrolls, or establishment survey. The zero jobs created is derived from a survey of 10s of thousands of employers nationwide. It is derived from the payroll amounts these private and government employers report to the BLS. This only counts people who do not work on farms.
Jobless rate, or household survey. The unemployment rate is derived primarily from a survey of households. This survey asks people several questions, primarily, do you have a job or don’t you have a job. And are you actively looking for work if you don’t. The jobless rate is the ratio of people who are defined as out of work but looking for a job divided by the labor pool.
Jobless claims. The weekly jobless claims is derived primarily from first-time filings of unemployment benefits, along with continuing claims for unemployment over a longer period of time. This survey only measures people who have lost their jobs or can’t find work. It doesn’t measure people who have been hired or have jobs.
3 surveys. telling us three things. measuring 3 different things. measuring things in different ways. They are not directly related to each other.
-George