Unemployment Numbers Are For Dummies
Econintersect LLC | Apr 08, 2012 03:34AM ET
When the BLS unemployment numbers “improved” to 8.2% on Friday, I thought enough is enough. Come on boys and girls, yah gotta be smarter than to believe this garbage! Nothing in the world of logic or specific data point in the BLS database supports ANY drop in the unemployment rate this month.
Literally half of the drop in the unemployment rate over the last year is due to shrinking the size of the workforce – in other words unemployed are no longer being counted as they are removed from the workforce.
Bad decisions are made when understanding is obfuscated. Is unemployment falling – generally yes, but specifically this month – NO. The size of unemployment is not correctly understood because of silly definitions and moveable baselines which prevent comparative analysis to other periods of time.
There are a variety of reasons exact understanding of unemployment is necessary. The primary reason for me is understanding economic slack. A large unemployed population puts downward pressure on wages, and it is an economic pulse point.
The problem begins with who is defined as unemployed. Per the Click here to view the scorecard table below with active hyperlinks
Bankruptcy this Week: WorldGate Communications, Pinnacle Airlines, AFA Investment
Failed Banks this Week: None
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