The Ugly Truth in the Jobs Report

Right Side News ^ | 01/08/12 | Mike Merrill

[RightSideNews]

Hearing the mainstream media breathlessly report that the unemployment rate declined to 8.5% makes it sound like all is well and the economy is mending. Unfortunately, there’s more to the story. 

The official unemployment rate, called “U-3” by the Bureau of Labor Statistics (BLS), doesn’t include discouraged workers who gave up looking for work, nor does it include people working part time who want full time jobs. “U-6” is the real unemployment number, and it stands at a whopping 15.2% in Dec 2011. (See BLS Labor Underutilization for details)

The Rest of the Story

In the past two months, BLS reported a total of 300,000 new jobs added. If you dig into the fine print, though, you’ll see that 625,000 people were magically dropped from the rolls in the same period and no longer counted.

• In November, the U.S. added 100,000 jobs (revised down from 120,000 reported last month) but 315,000 people ‘dropped out’ of the labor force the same month and were no longer counted.

• In December, the U.S. added 200,000 jobs, but another 310,000 dropped out of the labor force

Another perspective of the real jobs number is the labor participation rate, the percentage of working age people between 16-64 who are actually working or looking for a job. People who are discouraged and have given up looking for a job are considered to have dropped out of the workforce, so the labor participation rate goes down.

[ronnie raygun]

The truth is they lie and no one takes them to task

[ErnBatavia]

Why the excerpted version?

[Hojczyk]

GOIP better wake up..

.http://www.nationalreview.com/articles/287440/gop-needs-bolder-growth-message-larry-kudlow

[whitedog57]

The truth?

Civilian Employment to Population Ratio Lowest Since Carter / Early Reagan ... And Flat-lined! Employment Misery Index Increasing!

http://confoundedinterest.wordpress.com/2012/01/06/unemployment-actually-rose-in-december-nsa-dont-shoot-the-messenger/

[Common Sense 101]

People who are discouraged and have given up looking for a job are considered to have dropped out of the workforce, so the labor participation rate goes down.

BS... someone waant to explain how people can stop or “drop out” of the workforce? Have these people been given special “messiah” Skittles that excuse them from paying bills or ever experiencing hunger?

[kjo]

Can anyone tell me why the GOP candidates in these so called “debates” don’t put out the real figure?

Any why don’t they demand a third party examine Obama’s hard copy birth certificate? Or ask the press to ask Obama how he came by a social security number issued in a state he’d never been to in 1977? Or why his college grades, senior thesis, SAT scores, and passport records are all sealed?

This election would be over in five minutes if any of this was brought out in public.

Why aren’t they doing it?

[Alberta's Child]

My suspicion is that a lot of the people who have "dropped out" of the labor force are workers in the 55-65 age group who are lingering in a state of semi-retirement or forced early retirement in this economy.

My own industry is going through some tough times, but I've received a number of calls from executive search firms looking for people in my age group to fill senior management positions in the industry. In at least two of the cases I know it involves a transition similar to what I described above.

[jjotto]

Examples: Architect, age 60, unemployed for 2 years except for part-time temp gigs, takes SS retirement at 62. Carpenter, age 58, unemployed for 3 years except for part-time temp gigs, quits looking for an employer, relies on nurse wife’s insurance and works only cash-only jobs. Single mom drops out of workforce entirely, relying on welfare.

[DuncanWaring]

someone waant to explain how people can stop or “drop out” of the workforce?

I believe that once someone has exhausted their unemployment benefits they are no longer considered to be unemployed, and thus "out of the workforce", even though they would take a job if they found one.

[upchuck]

Anyone know how the BLS figures out how many people per month are dropping out?

IMHO, BLS will continue cooking the numbers until we are at 6.5-7.0 “unemployment” by October. Make nobama look like a genius.

It is very troublesome that the populace is so dumbed down that they don’t even question numbers like this. Just plain common sense says there’s something funny going on.

Oh, yeah. Common sense... that’s disappearing too.

[Dianna]

BS... someone waant to explain how people can stop or “drop out” of the workforce? Have these people been given special “messiah” Skittles that excuse them from paying bills or ever experiencing hunger?

Here is an interesting statistic from last January:

Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every single day for the next 19 years.

I'd guess many are those dropping out are retiring, whether they can really afford to or not.

[FlipWilson]

Meet the 21st Centuries “Forgotten Man” those who have “given up looking” for work because prosperity has becomabyss enemy of the state under the one’s Marxist policies.

[redpoll]

>>>BS... someone waant to explain how people can stop or “drop out” of the workforce? Have these people been given special “messiah” Skittles that excuse them from paying bills or ever experiencing hunger?<<<

Here are some ways to do it:
- Live with your parents, siblings, or relatives
- Go back to college
- Take a job in an “industry” that isn’t recognized, like growing weed, or fixing cars in your garage while taking money under the table
- Reduce your family’s income to one wage earner
- Scrounge or barter
- You have enough savings to live in quasi-poverty for a while
- Early retirement or forced retirement

By the way, the number of people on food stamps is through the roof (providing Magic Skittles).

I live in a small Alaskan village far from the road system, and you could actually live comfortably (in a 19th-century manner) in a converted shack, with some infusion of food stamps, a few snares, and some bullets in a .22 rifle.

Much of that deficit pays for those people who have dropped out of the workforce, too, so they’re hidden in plain sight. Once the economy implodes, we’ll see them on the streets, along with many of us, I suppose.

[MarkL]

The government and media only trumpet the numbers they feel are advantageous to the Obama Regime (or as we’ve seen countless times) numbers damaging to republican congresses or administrations.

They report the unemployment numbers they feel will help keep Obama in office.

They report the currently due US debt of 16 trillion dollars, rather than the total (mostly unfunded) US debt of nearly 66 trillion dollars. Not that it really matters. Most of the dumb-masses have no concept of what “a trillion” is. Still, 16 is better than 66.

Mark

[combat_boots]

Thanks for the post.

[aldabra]

Please bear with me as I work my way to how people are dropped out of the civilian labor force.

The BLS produces two sets of unemployment statistics:
* CPS (Current Population Survey) or Household Survey Data which is found in the A tables of the empsit, and
* CES (Current Employment Situation) or Establishment Survey data which is found in the B tables of the empsit Employment Situation.

Each month the BLS surveys 60,000 households by phone. The results are put through various stastical tools and produce the CPS or Household data. This is the source of the unemployment rate. Whether or not one is collecting unemployment insurance is not considered in producing the unemployment rate.

Each month BLS also surveys approximately 150,000 businesses and government agencies representing approximately 390,000 worksites throughout the United States. The results are also put various statistical tools and produce the CES or Payroll / Establishment data . This is the source of the number of jobs gained / lost, hours worked, and earnings. Because some businesses are late in sending in their information, the payroll data is subject to monthly revisions.

The number of people collecting unemployment affects the annual benchmark revisions to the Establishment / Payroll data which "are derived primarily from employment counts reported on unemployment insurance (UI) tax reports that nearly all employers are required to file with State Workforce Agencies".

In 1994, under Clinton a major redesign of the CPS was released. Part of the redesign was to drop people out of the civilian labor force if they were considered 'discouraged' and were unemployed for over one year. Prior to the redesign, you were considered unemployed if you wanted to find a job, even if you were 'discouraged'.

Not counting the long term discouraged unemployed as part of the civilian labor force makes the unemployment rate look better, better but is reflected in the ever diminishing participation rate.

PS if anything I wrote is unclear contact me, I'll do my best to clear it up.

[upchuck]

Thanks for a very good explanation. How are the 60,000 households and 150,000 businesses chosen? I find it odd that in all my years I’ve never been contacted by either.

[hinckley buzzard]

It is an interesting statistic but as of January 2012 the age of eligibility for full social security is 66.

[Dianna]

It is an interesting statistic but as of January 2012 the age of eligibility for full social security is 66.

Thanks, I hadn't seen that before. But even still, if you're a person who has been unemployed since age 60 or 61, it would be awfully tempting to start collecting. A reduced benefit is better than nothing at all.