Our True U.S. Unemployment Numbers.
Really? The BLS just dropped 1.2 million US workers out of the work force! Not so fast. January is the month for annual revisions so the number in the workforce did not actually drop. The BLS, using the 2010 census data incorporated the data from the Census Survey which measured data over the ten years prior to 2010, and then reconciled and reported these changes into January, 2012. Spread out over 10 years, 1.2 million people is not significant on a per-month basis. However to believe that true unemployment is 8.3% is unrealistic.
The seasonally-adjusted SGS Alternate Unemployment Rate (blue line) reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. The fact is these people exist. I know a few, and they certainly believe that they exist, as do their creditors. That estimate is added to the BLS estimate of U-6 Unemployment Rate (grey line), which includes short-term discouraged workers. True unemployment in America today is 23%.
The U-3 Unemployment Rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.
The BLS’ participation rate for December, 2011 was 64% versus 63.7% in January 2012. This means that 138,000 fewer U.S workers were working in spite of a larger labor force and 243,000 net jobs allegedly being created. Add those 138,000 workers back into the U-3 and the published unemployment rate of 8.3% is really 9.1%. Extrapolate the real U-6, and subsequent and SGS from a true baseline of 9.1% on the U-3, and true unemployment in America is in excess of 24%.
Also, there were 42,000 temporary delivery jobs created by UPS, FedEx, etc., in the 243,000 number, and that number will be revised downward.
Remember, we need 125,000 new jobs just to keep up with population growth each month. The US economy has created almost 3 million jobs in the last two years. Great, but we’re still down 7 million jobs and if we create 250,000 new jobs a month, it will be 2016 before we get back to where we were in 2007.