Time For Our Monthly Dose Of Unemployment Fantasy.
Well, its’ time again for our monthly dose of unemployment fantasy. The statistics on unemployment will be forecasted by ADP, and then reported by the Department of Labor with revisions and forecasts which will then be tacked to the President’s overall performance. Depending on your political vantage point, and your network of choice this will be heaped into the 24 hour news cycle driving presidential polling and market numbers up or down.
The U-3 unemployment number which was reported at 8.3 percent at the end of January was rumored to have moved north of 9.0 by mid-February. This number, irrespective of the reporting date is a façade. Why? The Bureau of Labor Statistics allegedly measures unemployment using the following for the U-3 rate: “total unemployed, as a percent of the civilian labor force.”
So, what is the current total unemployed (working-age Americans, eligible to participate in the civilian labor force, but not currently working) percentage of the civilian labor force? The answer is 36%
This is the lowest labor participation rate in thirty years, and comprises the worst employment situation since the Great Depression. Labor force participation is the number we should really be looking at. The Bureau of Labor Statistics figures have some use; however, is it not logical to measure overall employment health through the measurement of those who are not participating in the labor force? I would suggest that we keep this metric in mind over the next few news cycles.