If the government didn’t make people disappear, the fact is there are far fewer people in the workforce and it’s alarming!
Before we get too optimistic about the unemployment figures, we need to look at the real figures according to the Bureau of Labor Statistics (BLS). Things appear to be getting better slowly but it’s not time to give out the party favors.
The fact is that one can debate counting part timers in the calculations but long term unemployed persons and those marginally attached should be counted and they are not. This is a questionable practice that has gradually become the norm after the 1980′s. U-5 is the column people should be looking at when determining the true numbers of the population affected by unemployment.
|Measure||Not seasonally adjusted||Seasonally adjusted|
|U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force||5.6||4.8||4.9||5.5||5.3||5.1||5.0||5.0||4.9|
|U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force||6.2||5.0||5.4||5.5||5.2||5.1||4.9||4.9||4.7|
|U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)||9.8||8.3||8.8||9.1||9.0||8.9||8.7||8.5||8.3|
|U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers||10.4||8.8||9.4||9.7||9.6||9.5||9.3||9.1||8.9|
|U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force||11.4||9.8||10.5||10.7||10.5||10.4||10.2||10.0||9.9|
|U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force||17.3||15.2||16.2||16.1||16.4||16.0||15.6||15.2||15.1|
|NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.|
Another factor being discussed is the participation rate and the possible effect it is having or not having on the unemployment numbers.
The workforce participation rate is the lowest since 1983. Because the work force has shrunk, these people are taken out of the unemployment calculation. In large part this participation rate decrease is due to the Census numbers coming in on the January rolls. The labor force participation rate can decrease when the rate of growth of the population outweighs that of the employed and unemployed together. The labor force participation rate is a key component in long-term economic growth, almost as important as productivity.(Wiki)
The adjustment to the participation rate: the adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000.
The BLS claims the total unemployment rate was unaffected – the labor force participation rate and the employment-population ration were each reduced by 0.3 percentage point. This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16-24. Both these age groups have lower levels of labor force participation that the general population.
There are certain implications in the increases in the population of 55+ and 16-24. They are not being counted but do they have meaning in terms of our growth and productivity? We do have baby boomers retiring but are more people retiring or collecting social security disability because there are no jobs? Some figures estimate that a 10% in social security disability is due to people in the 55+ category giving up on employment. In addition, there is an implication that youth unemployment is increasing.
Zerohedge believes the BLS is cooking the books by making people simply disappear. Time will tell.
People are disappearing from the workforce. We now have women in the workforce, it shouldn’t be going down.
The labor markets are still volatile and we need to be clear on that point. Read more: AOL
It also helps that the Feds are printing money faster than the presses can keep up. Unfortunately, it might be creating a dangerous bubble which won’t appear until 2013 or 2014.