Unemployment Drops To 8.6% – How Numbers Lie

Posted by in Blog, Politics on December 2, 2011 12:32 pm / 5 comments

Before President Obama and the Democrats start strutting too proudly about the new unemployment rate it is important to recognize how the numbers announced this morning lie. It’s simple math so stay with me and we’ll walk through why things are not as good as they sound.

The unemployment rate, on the surface, is a simple formula that divides the number of unemployed workers by the total workforce, expressed as a percentage.

(UNEMPLOYED WORKERS / TOTAL LABOR FORCE) X 100 = UNEMPLOYMENT RATE

Where the numbers lie is what an “unemployed worker” is. The Bureau of Labor Statistics (BLS) defines unemployed workers as follows:

“Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.”

Therein lies the hidden truth and why this morning’s numbers are misleading. The economy added a net of 120,000 new jobs in November, and the new job totals for September and October were revised upwardly by 52,000 and 20,000 jobs respectively. So we have a total of 192,000 jobs added to the workforce (not including those previously reported for September and October) BUT 315,000 PEOPLE FELL FROM THE RANKS OF THE UNEMPLOYED. That means they stopped looking for work in November.

The bottom line is we actually lost ground and the 8.6% unemployment rate that will be highly touted by the Administration and Congressional Democrats is a fallacy. What the lower rate really means is that 315,000 more Americans became apathetic, frustrated or lazy and have just given up.

Hardly worth celebrating!

 
 

5 Comments

  1. workingclass artist says:
    December 2, 2011 at 1:24 pm

    check out this chart…
    http://texanomics.blogspot.com/2011/06/texas-labor-force-continues-to-grow.html?utm_source=The+Perry+Alman

    Which is backed up by this

    “The Texas economy continues to expand. Texas added 7,100 jobs overall in October. Private job growth in October was robust with 15,900 new jobs added, offset by a loss of 8,900 government jobs. Year-to-date, the state has gained 186,000 total jobs and 241,700 private jobs…To gauge the relative strength of Texas job growth, one of the simplest and most informative ways is comparing the rate of job growth in Texas relative to the U.S. However, those figures alone do not tell us how much Texas is contributing to national performance. Another option is calculating what U.S. job growth would be without Texas. For example, through October 2011, year-to-date annualized Texas job growth was 2.1 percent, compared with a U.S. rate of 1.2 percent. Without the Texas gains, U.S. employment would have expanded 1.0 percent (Table 2).”

    http://dallasfed.org/research/employment/2011/1110.cfm

    I’ll vote for Results.

    Gig Em’
    Perry 2012

  2. Michael Charney says:
    December 2, 2011 at 3:22 pm

    No doubt the numbers seem funny; but in fairness, if the parties in power were reversed, the arguments would be reversed, too. Everybody plays games with the stats for political advantage. The closest equivalent on the GOP side was burying the war costs “off budget.”

  3. GOD says:
    December 6, 2011 at 2:33 am

    Unemployment Drops To 8.6% – How Numbers Lie

    When the Numbers Rise, they don’t Lie!
    When the Numbers Drop, they Lie!

    I feel like I’m in Twilight FoxNews Zone reading this article!
    UnFair and Unbalanced and full of Lies!

  4. Missouri leads the nation… in job loss | United for Missouri says:
    February 3, 2012 at 12:14 pm

    [...] be encouraged to see Missouri’s rate has fallen – but unemployment only considers those who are actively seeking a job in Missouri. Many people who want to be employed have stopped looking. Others may have moved away [...]

  5. Missouri Leads Nation in Job Loss | United for Missouri's Future says:
    September 30, 2012 at 4:19 pm

    [...] be encouraged to see Missouri’s rate has fallen – but unemployment only considers those who are actively seeking a job in Missouri. Many people who want to be employed have stopped looking. Others may have moved away [...]

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