Jan 08 2012

December Unemployment Number Bogus – True Unemployment 11.2%

I always marvel at people who think PR is more powerful than reality. The bureaucrats in DC are a prime example of this weird belief system. They put out dodgy unemployment numbers and expect everyone suffering from a poor job market to suddenly think everything is OK! It’s clearly magic wand time in DC again.

Sort of like those global warmists, who fail to recognize there has been no significant warming over the last 2-3 decades. Their statistically manipulated, cherry-picked and ‘hidden’ data claims all the diversity of weather we see around us is due to warming they only see in their unmaintained computer models. Yet a review of raw measurements shows nothing of the kind. Fantasy over fact.

When the liberal news media hailed the December unemployment rate of 8.5%, like good little journalist majors (who are mathematically stunted to middle school level math) they missed the critical details behind the number. They once again fell down on the job. But this kind of analysis is not taught in schools anymore. To think is a lost art. Today we regurgitate information.

I have been doing this analysis for months now, showing how the work force size used to compute unemployment is the real number shrinking. Not the number of people out of work or not working in their career field (i.e., working part time or lower wage jobs to get by). We may be adding jobs, but we are losing people in the work force. Fewer workers means slower growth, less consumer demand, less revenues. It is a vicious downward spiral. Ignoring it will be catastrophic. Coming back out of it will take years.

Since 2000 we have the numbers for the labor force, and unlike the general population which has been growing over the last decade, the number of people “COUNTED” as the workforce has leveled off. See the blue area in the chart below (click to enlarge):

The only reason the labor force took a dive in 2008 (not surprisingly, the year the Democrats took over in DC) was due to the Great Recession caused by the housing market debacle (in turn caused by liberal shenanigans with respect to lending rules). Our population has not declined, just those the government decides to count as the pool of workers. This is where the fiction begins.

If the historic trend of workforce size to population size had remained in place (the red line), we would see almost 18,000,000 more people employed. A far cry from the supposed 200,000 added to the employment roles in December.

Worse yet, there was no typical increase in the seasonal job numbers as one would expect. From October to November the workforce SHRUNK by 315,000 workers! From November to December the workforce added back a paltry 4,000. The January numbers are going to look brutal when the seasonal jobs are lost.

So why would the government compute unemployment rates without taking into account the normal workforce size as a percentage of the population (a number that is very stable during periods of low unemployment – and therefore well known for our economy)?

As Obama and the Dems learned, the government bureaucracy is lethargic and pathetically slow to act. If you think ‘shovel ready jobs’ are a myth, wait until you try to change a buggered statistic in the government. Even though it is horribly inaccurate, it can take decades to fix!

Which is why strong economies are based on the free-wheeling, innovative and nimble free economy – not large and ponderous bureaucracies. Even this simple fix would be made at lightening speed outside government.

If we wanted to measure reality – the reality being felt on the streets of Middle America – we would adjust the workforce to reflect where really is. The number of people available to work is 158,5 million, not the 141 million the Department of Labor is using. When we compute the fraction of people on the unemployment roles out of this larger, more accurate pool, the actual unemployment rate is 11.2%.

So, do the people in DC and in front of the TV cameras (completely insulated from the economic downturn) think this fig leaf is going to make everyone love this administration and ignore the damage done by its incompetence and liberal policies? I don’t think so. These are the same people who missed the 2010 backlash election wave coming.

Denial is not something that is contagious folks. Outside those pretending reality does not exist, is a the 99% of us living the reality. And who will be voting the reality come November.

10 responses so far

10 Responses to “December Unemployment Number Bogus – True Unemployment 11.2%”

  1. Mike M. says:

    I wish I could be as optimistic, AJ. I just remember Goebbels’ line that if you repeat a lie often enough, people will believe it.

    Obama doesn’t have to fool all the people all the time. Just enough people on Election Day. And he’s got nothing to lose by lying through his teeth.

  2. kathie says:


  3. ivehadit says:

    From Rasmussen Reports regarding the president’s approval numbers today: “Among those not affiliated with either major party, 19% Strongly Approve and 39% Strongly Disapprove. ”

    Why is it not at least 80% that disapprove? Scary that these people “will decide the election in Nov.”, imho. Are they not paying attention?

  4. kathie says:

    MSM=”Obama’s Secret Service”, sounds about right to me!

  5. kootenaybob says:

    Just a small point – the dems actually “took over” in 2006, at least where it counts – which only strengthens your premise as the impact on real people of bad policy takes a little time to take hold.

  6. Redteam says:

    How many are willing to bet on whether Obama will be allowed on all states ballots as a ‘natural born citizen’
    seems as if there are a lot of activity throughout the US on this issue.

    My bet. He won’t be on all ballots…

  7. WWS says:

    Redteam, he will be on all ballots. If any State tries to keep him off Obama will simply send in Federal Troops to make sure he is on, just like Little Rock 1957. Don’t kid yourself into thinking that the States have any real power left.

    In other election news, these latest attacks in the Republican field have made up my mind for me. I find it disgusting to see so many supposedly “conservative” candidates jump straight to a hard left faux-populist message the instant they think it might be to their advantage. In 2008, Huckabee was my idea of the worst candidate possible – far to the right on social issues, far to the left on economic issues. A man who had no problem at all with the Feds in charge of everything, he just wanted to change the focus of what parts of our lives they controlled. Santorum is this year’s Huckabee, and he deserves to sink back in the obscurity he earned while he was in office.

    for me, the debate is over:

    Romney for President in 2012.

  8. Redteam says:

    WWW, unfortunately I think you may be correct. It’s been a long time since individual states mattered, and even more unfortunately it has been even longer since the constitution mattered. No one can even read it any more. I think even the study of it in Law schools is verboten. Clearly the constitution says that vacancies that occur during recess of congress can be filled by recess appointments. To me that implies that if the vacancy occurs at some time while congress is in session that it can not be filled by recess appointment. but then I’m talking English language here.

  9. WWS says:

    Why would I now support Romney even though he wasn’t my first choice?

    I originally supported Pawlenty, until he dropped out at the first whiff of difficulty, demonstrating that he had not the nerve to hold the office of President.

    I then supported Perry, whose debate performances proceeded to be so embarrassingly bad (can’t remember his own policy positions? Really? REALLY???) that I knew he would be ground up and spit out in any race with Obama.

    I then flirted with Cain, until it turned out that he was just another smooth talking huckster who was more interested in partying and selling books than anything else, and who beclowned himself when the news of his 13 year affair came out. (he proved the story true with the way he quit the race)

    I flirted with the idea of Newt until he demonstrated, once again, that no matter how much good “Good Newt” does, “Bad Newt” will always show up and say something incredibly arrogant and grating towards nearly everyone, killing his chances to win anything. It’s in his DNA, he can’t help it.

    those I could never consider:

    Hunstman – should be running in the Dem primaries, not the Republican ones.

    Bachmann – too shrill, needs to stay in Congress.

    Santorum – economic liberal, and he wants to outlaw contraception. Puh-lease.

    Paul – thinks America deserved 9-11 and that GWB ran the country for the Illuminati and the trilateral commission. Double puh-lease.

    Trump – probably the only man in America who could make me vote for Obama, if it were a choice between them.

    Gary Johnson – who? Sorry, I vaguely remember the name but that’s about it.

    I would have considered Chris Christie, or Mitch Daniels, Rudy Giuliani, or even Jeb Bush. But none of them want to do the work it takes to run a national campaign. If they don’t want the work, they shouldn’t be President.

    Mitt Romney, the last man standing.

    Romney for President in 2012.

  10. lurker9876 says:

    Yesterday’s actions made me think that it is time for me to start thinking about voting for Mitt. I got disgusted with Perry and Newt over Mitt’s comment about Bain.

    So, I’m starting to lead towards a vote towards Mitt.