COMMENTARY | According to the recent employment report released by the Bureau of Labor Statistics (BLS) 120,000 new jobs were added in November. However, according Reuters, there were also 402,000 new claims for unemployment benefits. So how do you create a drop in the unemployment rate when more people are losing jobs than finding jobs? It's easy. You simply stop counting the 315,000 people who stopped looking.
When Obama assumed office in January 2009, the Bureau of Labor Statistics reported that the labor force stood at 153,716,000 with 142,099,000 employed. Today the BLS says we have a labor force of 153,883,000 with 140,580,000 employed. With the number of potential employees going up and the number of employed Americans going down I would really like to hear the BLS explain how the unemployment number has fallen.
Jim Pethokoukis, a Money a Politics columnist for Reuters, Tweeted that if the United States labor force was the same size as it was when Barack Obama took office in Jan. 2009 the actual U3 unemployment rate would be 11 percent.
"When you see the unemployment rate fall because people drop out of the labor force,"
Dean Baker, co-director of the Center for Economic and Policy Research in Washington told Los Angeles
Times, "you can't be too happy about that."
Isn't it curious how, even though the amount of people who stopped looking for work clearly outnumbers the amount of people who found a job, the BLS still felt confident enough to tell us the unemployment rate fell?
It all reminds me of the fuzzy "jobs saved or created" math system used by President Barack Obama in 2009 to promote his unpopular $787 billion economic stimulus package.
According the government website, 640,329 "direct jobs" were "created or saved" as of October 30, 2009.
But in a letter posted by ABC news that was drafted to Earl Devaney, chairman of the Recovery Accountability and Transparency Board, House Oversight and Government Reform, ranking House Oversight and Government Reform member Darrell Issa (R-Calif.) cited numerous examples that proved that number to be "grossly inaccurate."
Most notable in the new BLS report, the largest increase in new jobs during November - 50,000 of them -- are in the retail industry. Considering our annual foray into the upcoming holiday season I will predict that these gains are temporary and will disappear soon after the holiday shopping season.
Isn't it curious the amount of times the word "unexpectedly" is used when reporting new unemployment numbers?
- · * "U.S. unemployment falls unexpectedly" - The Origonian, August 2009
- · * "The unemployment rate in the U.S. unexpectedly dropped" - Bloomberg, February 2010
- · * "The unemployment rate unexpectedly dipped to 9.7 percent in January" - New York Times, February 2010.
- · * "U.S. unemployment rate falls unexpectedly, but job losses continue" - Los Angeles Times, February 2010
- · * "Treasuries fell after the government's payrolls report showed the unemployment rate unexpectedly dropped in November." - Bloomberg, December 2011
With today's math, "1 + 1" can be whatever you want it to be.
But considering the fact that job losses consistently exceed the number of jobs found, not to mention the obvious efforts of The Bureau of Labor Statistics to avoid reporting the truth, perhaps when it comes to reporting unemployment numbers it's time to start replacing the word "unexpectedly" with the more accurate word -- "predictably?"
206 comments