OK… you know the mainstream media will be trumpeting this particular success: Unemployment rate drops from 10% to 9.7%. Better yet, the seaonally-adjusted underemployment rate dropped from 17.3% to 16.5%. In the article I linked, economists are sighing with relief, saying that maybe – just maybe, the long winter of the Great Recession is over.
The numbers aren’t adding up. Somehow, the non-farm American workforce lost 20,000 jobs in January… and yet, unemployment went DOWN? How can you LOSE jobs and have unemployment drop as well? In a sane world, when people lose their jobs, that means that unemployment goes up.
I was thinking, “did retirements somehow affect the rate?” Then, Ed over at HotAir pointed something out…
In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers. (See table A-11.)
The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January, reaching 6.3 million. Since the start of the recession in December 2007, the number of long-term unemployed has risen by 5.0 million. (See table A-12.)
To put it in simple terms: they fiddled with the numbers. Think of it in terms of fractions: if we have a pie and I cut it into thirds and say you can have a piece, that means you have 1/3 of the pie. If however, I fiddle with the denominator and take away a piece and say you can have a piece… then I can say that you have 1/2 of the pie! Yay!
Except that you still only have 1/3 of the pie.
In this case, the government shrank the number by fiddling with the number of available jobs and by “seasonally-adjusting” things. The facts, kids, is that if we compare January 2009 to January 2010, the underemployment rate has gone up by between 2 and 3.5%, depending on which statistic you follow.
If we’d dropped an actual 0.3% in unemployment, it would be reasonable cause for a grin or two. No one wants to see people unemployed and if the number had actually dropped, I’d be inclined to join the festivities… but it all just smells like someone cooking the books. You simply cannot lose payroll members and decrease unemployment at the same time without fiddling with the total jobs available.