Feb 04 2011

The Real Unemployment Figure – 10.8%

The government has put out the unemployment numbers for January, and they are not good (though I doubt the math-challenged media will report anything but rosy news). As Ed Morrissey notes, the reason the unemployment dropped was not the paltry 34,000 jobs added in January, it was because the number of people considered to be ‘in the work force’ shrunk by nearly 1 million people in the past few months:

… the civilian labor force dropped from 153,690,000 in December to 153,186,000 in January after a recent November peak of 153,950,000. That was a drop of 504,000 in January from December, and 764,000 in two months. The participation rate dropped from 64.5% in November to 64.3% in December and 64.2% in January.

I have noted before how the labor force is well below the pre-recession norms, and therefore the unemployment rate is deceptive (and too optimistic). In that last post on the matter I selected the July labor force trends for the decade. You can select any month and get the same basic trend over the decade, but let’s adjust our equations for January 2011 and assuming a steady work force increase that tracks with the population increase.

The following graph shows the January workforce levels since 2000 per the US Labor Department (click to enlarge).

As can be seen there are some fluctuations each year, but a linear trend line (red) can be calculated that indicates the annual growth per year for January. It indicates the January 2011 workforce level should have been around 155,500,000 people – a good 2.3 million more than were reported in the January 2011 unemployment numbers.

If the unemployment is computed against this nominal workforce level, then the actual unemployment rate is a staggering 10.85%. This is the real unemployment number, because it represents the gap between the total available workforce and those actually working (155.5 million and 138.63 million). This more accurate equation indicates a whopping 16.87 million people are unemployed.

If we look at the U6 number (those unemployed and underemployed) the picture of economic suffering in the country is even worse. The real January 2011 U6 is 17.35% (not the 16.1% reported). This represents 24.66+ million people underemployed.

Anyone reporting that the January 2011 unemployment numbers are a positive sign has a huge “Can’t Do Simple Math” sign blinking over their head.

Update: AJStrata can confirm for Rick Santelli that he was right when he tried to debunk the spin coming from the media:

You and I both know that the unemployment rate, the labor force moving in and out, those giving up, is really probably your best statistical reason for the drop to 9.0 (percent).

As I showed above that IS 100% correct, it was people giving up on getting work that shrunk the unemployment, not new jobs.

15 responses so far

15 Responses to “The Real Unemployment Figure – 10.8%”

  1. Mike M. says:

    According to Instapundit, Gallup polling results are showing 9.8% unemployment.

    Not that the actual numbers matter. Too high is too high. The real stories are:

    1. People are giving up. Going on welfare for a livelihood. Getting them off will be problematic.

    2. The propaganda press is spinning at high speed to protect Obama.

    3. Can we REALLY trust Obama’s numbers? Given the constant revisions upward quietly done a few months later? I certainly wouldn’t.

  2. […] This post was mentioned on Twitter by Free To Prosper, AJ Strata. AJ Strata said: new: The Real Unemployment Figure – 10.8% http://strata-sphere.com/blog/index.php/archives/15913 […]

  3. dhunter says:

    They manipulate the bad news to make it appear good.

    They Ignore contempt of court citations.

    They proceed full speed ahead with implementing UNCONSTITUTIONAL Laws!

    They ban the energy production that would create jobs and lower oil prices while paying off their friends for technology that does not work and /or does not exits!

    They/He avoids the media and ANY questions at all costs even closing bill signings to the Presstitutes who adore him on bended knee!

    They close vast expanses of lands to exploration or development, attempt to tax the air we breathe and deny the farmers the water to grow crops.

    And we should fear what a happens to a dictatorship in Egypt!

    Some among us took oaths of office to defend against enemies domestic and they had better open their eyes and honor those oaths while they can.

    John McCain and his “I can now work with a Centrist Obama” hallucinations not withstanding!


  4. […] The Real Unemployment Figure – 10.8%. This entry was posted in Uncategorized. Bookmark the permalink. ← I love Amity […]

  5. kathie says:

    No person has been reelected President when the unemployment rate is above 8%, ladies and gentlemen that is the answer to the new rate.

  6. […] 3 new undercover PP clinic videos – hotair.com 02/04/2011 Unedited. more… The Real Unemployment Figure – 10.8% – strata-sphere.com 02/04/2011 The government has put out the unemployment numbers for […]

  7. kathie says:

    Obama Job Approval: Gallup – 46% | Rasmussen – 46% | RCP Avg – 49.3%, it’s on it’s way down……..YES! CNN has it at 55%???????

  8. Rick C says:

    What makes the analysis so hard is the number of people who chose early retirement because they couldn’t find a job. A quick look at:


    shows between Dec 2008 and Dec 2010, Social Security rolls increased by about 3.13 million. But, there is no data on early retirement and who took retirement because they really planned to retire.

  9. dbostan says:

    Have you, guys, seen that this ghetto thug told the Russians secrets about the British nuclear arms in order to secure his traitorous START treaty?
    This thug should be impeached and given the death penalty in front of a military court in Guantanamo for how he hurt our country and our allies.

  10. WWS says:

    the fools think that if they just play with the numbers enough, no one will know there’s high unemployment, and they believe that as long as no one knows, then there’s no problem.

    Idiots. They think the only thing wrong with unemployment is that it makes bad headlines – they don’t understand that unemployment is bad BECAUSE high unemployment means that housing will NOT pick back up, consumer spending will NOT pick back up, tax revenues will NOT pick up – in other words, the economy will NEVER recover as long as unemployment is at these levels no matter WHAT the headlines say about it!

    By faking the numbers, all they have done is to ruin their ability to effectively measure or understand what’s actually going on. heck of a way to run a country.

  11. ivehadit says:

    Across the board, they are a laughing stock, imho.

  12. lurker9876 says:

    Someone took a hard look at the numbers and concluded that the unemployment rate is really 12.8.

    Anyone did the income tax filing for last year yet? For those still working, how did their reported wages compare between 2010 and 2009?

    There is also that report about foreclosures. This report came out this week and says that we haven’t peaked on the number of foreclosures, which will happen this year.

    The Dems have already started their vitriolic attacks against the House Republicans. Government shutdown! Draconian! Unworkable!

    This won’t work like it did with Clinton.

    We see Obama and Michelle undergoing some extreme makeover – attending a church, national day of prayer, meeting with the military, and requesting private donations to the military.

    Sorry, won’t work. You won’t get the 2012 votes that you think you will.

  13. […] number that comes out of his administration is to be believed – whether it be jobs and unemployment, inflation, debt and deficit, approval or disapproval of this or that. And the […]

  14. kathie says:

    GO PACKERS…………………..!

  15. WWS says:

    I have a post stuck in moderation on the other thread, and I’m really not sure why – no url’s or anything that should have flagged that.