10.2% Unemployment? An Historical Perspective

Would someone please inform the Associated Press that a working knowledge of American history is essential for reporters attempting to cover the nation today!

Today's report on the (shocking!) jobless rate of 10.2 percent contains numerous egregious examples of historical cluelessness. And that's the most positive spin. A more negative assessment is that the AP writer and his editors know fully well that they are disseminating partial truths and mendacious inaccuracies.

The first problem occurs in the lead sentence: "The unemployment rate has surpassed 10 percent for the first time since 1983 -- and is likely to go higher."

This is not quite true. During the Clinton years the unemployment data were tweaked to separate those who recently lost their jobs from those who have given up looking for work. Before 1994 all were lumped together. So to be accurate, it must be said that the 1983 unemployment number was about 7.5 percent BETTER than today's report! The AP hides this contraction in plain sight a little later in its report:

Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

It should also be noted that a percent of the work force today represents a lot more people than in 1983. And vastly more than 1933, which is the time-line you would have to travel to see unemployment data comparable to what we are seeing now.

Reporter Christopher Rugaber wastes no time in committing his second error: the second sentence. He echoes White House spin as fact.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended.

Yes, the Obama faithful are claiming the recession is over by massaging the numbers for the 3rd Quarter by ignoring the fact that Cash for Clunkers and the first-time home-buyers credit, both fully subsidized by the taxpayer, created enough of a bump to make it appear that the economy is on the mend. Government cannot spend us into prosperity when the private sector cannot obtain financing from banks wary of government meddling. The reporter's willingness to accept the Geithner/Obama spin with no qualification -- "apparently" is not a qualification, it's acceptance -- is poor journalism.

The reporter does not adequately explain to us why the economy shed 190,000 "net" jobs yet some 600,000 more Americans are out of work:

The Labor Department said Friday that jobless rate rose to 10.2 percent, the highest since April 1983, from 9.8 percent in September. The economy shed a net total of 190,000 jobs in October, less than the downwardly revised 219,000 lost in September, but more than economists expected.

The jump in the jobless rate reflects a sharp increase in the tally of unemployed Americans, which rose to 15.7 million from 15.1 million. The net loss of jobs occurred across most industries, from manufacturing and construction to retail and financial. That tally is based on a separate survey of businesses.

It isn't so much of an explanation but acceptance of the government's use of the lesser figure.

But Rugaber does gives us some humor as he quotes Dan Greenhaus.

"It's not a good report," said Dan Greenhaus, chief economic strategist for New York-based investment firm Miller Tabak & Co. "What we're seeing is a validation of the idea that a jobless recovery is perfectly on track."

Jobless Recovery. Another innovation from our current administration.

The fourth egregious lack of historical context occurs as Rugaber does not do a followup on this next quote:

"You need explosive growth to take the unemployment rate down," Greenhaus said in an interview Thursday.

The economy soared by nearly 8 percent in 1983 after a steep recession, Greenhaus said, lowering the jobless rate by 2.5 percentage points that year. But the economy is unlikely to improve that fast this time, as consumers remain cautious and tight credit hinders businesses.

In 1983 President Ronald Reagan twisted the arms of a Congress controlled by Democrats to lower tax rates and open up domestic energy production. An economic boom began that, even though tempered in 1986 by higher tax rates when the Progressives in Congress struck back, continued largely through the '90s.

Instead, we see the Bush tax cuts about to disappear next year, and new rounds of tax hikes in the pipeline as Obama and the Progressives push for expensive new programs on health care and energy.

But the AP's economics writer leaves these facts undisturbed and his younger readers in the dark.

So you have to ask: Is the AP treatment by accident or design?

Either way, it's disgraceful and unworthy of a once great news-gathering operation.

The truth of our national economic crisis is buried near the end of the article:

October was the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years.

There are records that go back beyond 1939, but apparently the reporter does not want to use them. He doesn't even use "1939" as a benchmark. My guess is that he doesn't want to remind anyone that we are in "Great Depression" territory.

But we are.

Unemployment Number Gets Even Worse

The news is grim: Another 263,000 non-farm workers without jobs, and nation's official unemployment rate at 9.8 percent, the worst since June 1983.

Unless, of course, you view the "real" unemployment rate that includes the long-term laid off workers who have taken bits and pieces of part time work or have given up looking.

That's 17 percent.

That's 1930s, Depression-era, FDR meddling type unemployment.

Just so that we're clear on this.

By the way, they began excluding this category of worker back in 1994 to make the numbers look better. It worked for the Clinton administration, so the Bush team followed suit, and most assuredly the Obama numbers-massagers are probably wondering who else can be tossed out.

It's obvious they haven't a clue as to what creates jobs or encourages productivity in a free society.

Real Unemployment Rate 16.8%

The nation's "official" jobless rate hit 9.7 percent at the end of August.

Inside the numbers from the Bureau of Labor Statistics is another number: total jobless. It includes all those who are out of work and who have been removed from the labor force by government statistical rules. Adding those in you get an even grimmer number, and one that compares quite closely to the numbers of the Great Depression.

That number is 16.8 percent.

Ol' George in east Texas does a pretty good job of number crunching these government reports. He points out if it were not for the creativity of the good people in Washington, D.C., the numbers would look even worse.

No, he's not talking about the Stimulus Projects jobs that Joe Biden hallucinates.

He's talking about the fact that since January 1 the government has "invented" one million new jobs simply by "estimating" them into existence.

This is the 'statistically made up because we think so" department. Hmmm, lemme see here: 15,000 new jobs in construction...sure, whatever... 26,000 in professional services, and 24,000 leisure and hospitality. Uh huh. In all, 673,000 new jobs have been 'estimated into existence' since January and if you back out January, it's more than a million jobs that have been 'estimated into existence' so far this year.

No fair reaching for a swig of Jack Daniels - too early for that. It's only a 26-year high for unemployment.

No one knows for sure if these new jobs exist because there is no paperwork to prove they are there. On the other hand, no one can prove they aren't, so I guess it's your gut logic against their pipe dream.

This paragraph from today's report tells you all you need to know about the phoney-baloney unemployment numbers:

About 2.3 million persons were marginally attached to the labor force in August, reflecting an increase of 630,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Did you get all that? "Marginally attached" means jobless, but officially not unemployed because they hadn't tried to look for work in the past four weeks.

You gotta keep knocking on doors and telling Uncle Sam about it or he'll just assume you're as happy as a clam, and no one need worry about you.

The Real Unemployment Rate?

Today the administration is rejoicing, incredibly enough, at an unemployment report for July that shows that "only" 247,000 jobs were lost.

As one administration "economist" told Fox News, "it's the least worst day we've seen in a long time."

I guess that's one way to look at it. The official jobless number is 9.4 percent, one-tenth of a point better than June.

What the media is not reporting is that nearly 800,000 "workers" were take off the official roles to reduce the overall number of the workforce. These "discouraged" workers who have given up looking, the government continues to insist, should not count. As Reuters helpfully explains:

In the U.S., for the purpose of calculating the unemployment rate, the labor force is defined as those with a job plus those out of a job but actively looking for work.

If this statistical adjustment had not been made, the unemployment rate would be 9.9 percent. (It's nice to know that all those stimulus funded "shovel ready" jobs are out there providing encouragement to those long-term laid off workers, right?)

This isn't a new tactic. The Clinton and Bush administrations used the same fudge factors to make the economy look better. Only this administration is ramping it up to a new level.

If you add all the people who have been dropped from the list over the years back into the workforce, the unemployment percentage would be truly staggering.

So go if you are in a partying mood, go ahead and have your little soiree. Never mind that the total number of Americans with a job significantly declined, again, and that those seeking unemployment benefits have not decreased in number.

True Unemployment for July at 20.6 Percent

Last month we featured Donald Marron's website in which he explained that the true unemployment rate was several points higher than the official government number.

Today we look at the Top Stocks Blog at MSN Money, where Anthony Mirhaydari explains why the real unemployment rate for July is at 20.6 percent if you factor out the fudging of the "birth/death" model used to make the government's numbers look better.

Here's a chart:

Mirhaydari explains:

Not to scare you, but the situation is actually worse than it seems. Over the years, the government has changed the way it counts the unemployed. An example of this is the criticized Birth-Death Model which was added in 2000. The model is designed to account for the birth and death of businesses and the resultant lag in survey data. Unfortunately, the model doesn't work that well during economic contractions (like we have now) and consistently overstates the number of jobs being created each month.

John Williams of Shadow Government Statistics specializes in removing these questionable tweaks to the government's statistical data to better align current numbers with the methodology used to gather historical data. After reviewing the data, Williams believes that "the June jobs loss likely exceeded 700,000." David Rosenberg of Gluskin Sheff notes that the fall in the number of hours worked in June (to a record low of 33 per week) is equivalent to a loss of more than 800,000 jobs.

There are similar issues with the way the unemployment rate is measured. The headline rate only jumped from 9.4% to 9.5% because of a drop in the number of people in the workforce. The more inclusive "U-6" measure of unemployment, which includes discouraged workers, jumped from 16.4% to 16.5%. But even this doesn't adequately capture the situation on the ground: Back in the Clinton Administration, the definition of discouraged worker was changed to only include those that had given up looking for work because there were no jobs to be had within the last year.

By adding these folks back in, William's SGS-Alternate Unemployment Measure rose to a jaw-dropping 20.6%. Separately, the Center for Labor Market Studies in Boston puts U.S. unemployment at 18.2%. Any way you cut the numbers, the situation is very bad. According to David Rosenberg, one-in-three among the unemployed have been looking for a job for more than six months and still can't find one.

This brings us to another issue: expiring unemployment benefits. Continuing unemployment claims fell 53,000 to 6.7 million last week, but Deutsche Bank's chief U.S. economist Joseph LaVorgna wonders how much of this decline is due people exhausting their standard 26-week benefit. He says: "We are concerned about what will happen when a significant share of out-of-work individuals' benefits completely expire, because this could lead consumer spending to re-weaken, hence jeopardizing a fragile recovery."

Unless the economy starts getting traction here in the third quarter, we could face a situation where people find that they have no job and no unemployment benefits. For these people, 2009 will feel an awful lot like 1932. As a result, spending cuts will be deep and dramatic.

If this chart rattles your cage, so much the better.

It's time we quit telling lies and adjusting official statistics to make the party in power look better.

Reality is what it is, and it's always better to know the truth than the believe the lie.

This Joblessness Thing is So Unpredictable!

O Recovery, Where Art Thou? From CNN Money.com:

The number of Americans filing for initial unemployment insurance rose unexpectedly last week, to the highest level in more than a month, according to government data released Thursday.

There were 627,000 initial jobless claims filed in the week ended June 20, up 15,000 from a revised 612,000 the previous week, the Labor Department said.

The number was above the consensus estimate of 600,000 from economists surveyed by Briefing.com.That's the highest level of initial claims since the week ended May 16, when 636,000 were filed.

Of course there are Obamapologists who still contend that the green shoots are sprouting all over the fruited plains, but Jim Geraghty points out that so far there's only been a one week downward blip on the numbers in June, and that has reversed. Plus, he says, the revised numbers from the government keep going skyward as well:

6/11 initial new number: 601,000
6/11 revised new number: 605,000

6/11 initial total number: 6.820 million
6/11 revised total number: 6.835 million

6/18 initial new number: 608,000
6/18 revised new number: 612,000

6/18 initial total number: 6.687 million
6/18 revised total number: 6.709 million

6/25 initial new number: 627,000

6/25 initial total number: 6.738 million

Add a little "cap and tax" and "health care reform" to the economic mix and see just how closely we can mirror the last Great Depression.

Look at What We Bought with $787 Billion!

Way back in the early days of the Obama administration -- you remember, six months ago -- we were told that the stimulus bill must pass quickly so that unemployment could be held to no more than 8 percent this year.

Now that "official" joblessness is at 9.4 percent, and rising, WITH the stimulus in place, it is instructive to remember the promises and predictions that led us to mortgage our grand-children's future, and how well they've turned out thus far.

Notice how the dots, representing reality, are going upward in a steep, linear motion. Now repeat after me: Government spending does not cure recessions, and does not create permanent or productive jobs.

Never has, never will.

As Billy Joel once asked, musically, "Is that all you get for your money?" No. We'll get a huge dose of inflation fairly soon.

Would You Believe Unemployment at 16.4 Percent?

Today's theme obviously centers around economics.

(I don't exactly know how these themes develop. But they do.)

And since we are doing "economics" today, how about another fun look at last Friday's unemployment report, against courtesy of Donald Marron (see previous post).

Marron reported Friday that while the "official" unemployment rate is 9.4 percent -- these are the people who have recently lost jobs and are actively seeking new ones -- the official "expanded" unemployment picture is much grimmer.

The broadest of these, known as U-6, adds two groups to the regular measure: those who are marginally attached to the labor force (people who are willing to work and have worked in the past, but aren’t actively looking; this includes discouraged workers) and those who are working part-time even though they want to work full-time.

In the old days, this category would have been included in the unemployment report. When you add the two groups together, you realize why they are not lumped together now:


Heaven forbid we tell the America people that we have an unemployment rate of 16.4 percent.

Who knows what those stupid, Bible-toting, gun-thumpin' jerks might do!

Obama Depression Watch: 9.4% Out of Work

It's a lot easier to spin unemployment numbers if you massage them a little first.

Your eyebrows should be raised this morning as you get the "official" Labor Dept. report of job losses that claims "only" 345,000 jobs were lost in May.

Yet the government admits that unemployment has risen to 9.4 percent, a full half-point higher than last month.

However, the ADP National Employment Report earlier in the week -- a private survey of private employment -- found 532,000 jobs were lost in May.

There is a lot of air between the two numbers. The question then becomes: Who do you trust to tell you the truth?

Even taking the Labor Dept. report at face value, there are now 14.5 million official unemployed. This number does not take into account a vast swath of workers who have given up looking.

Naturally, the AP quotes some doofus proclaiming that the worst is over, happy days are just around the corner, blah, blah, blah, and, just in case you aren't drinking the happy juice yet, points out that this "recession" began in December 2007 and has seen the economy lose 6 million jobs.

Translation: It's that damn Bush's fault.

Nevermind that the Stimulus Bill was supposed to have immediately started kicking in on those "shovel ready" projects designed to get construction and factory workers back to work. So how is that working out?

Construction companies cut 59,000 jobs, down from 108,000 in April. Factories cut 156,000, on top of 154,000 in the previous month. Retailers cut 17,500 positions, compared with 36,500 in April. Financial activities cut 30,000, down from 45,000 in April. Even the government reduced employment -- by 7,000 -- after bulking up by 92,000 in April as it added workers for the 2010 Census.

Not so hot, huh?

Of course, the government is massaging the numbers from previous months, claiming that things weren't nearly so bad as first thought.

But still that nagging 9.4 percent unemployment rate?

The Obama Depression is here, folks.

And if they get Health Care Reform and Cap-and-Tax, it will be permanent.

Confirmation: Unemployment Numbers 'Improved'

Suspicions were correct. After going through the numbers, the federal government included 66,000 "hires" to make sure that the unemployment picture "improved" for April. Private sector unemployment rose by 611,000, and it will be adjusted upward next month.

Most of these are census workers who won't actually make money until the census begins.

There is a scientific term for this, if I can remember it. Oh, yes.

Total BS.

An Unemployment Stats Update

If you will forgive more April unemployment statistical news, there is this from the Labor Dept.:

- adult men (up from 8.8% in March to 9.4% in April) -
blacks (up from 13.3% to 15%) -
adult women (up from 7.0% to 7.1%), -
teenagers (down from 21.7% to 21.5 %) -
Hispanics (down from 11.4% to 11.3%)

Every category of worker is up (women just barely) with the exception of teenagers and Hispanics.

Why, do you suppose, is this?

Could it be that teens seek jobs about this time every year for the summer AND they don't get paid as well?

And Hispanics? Isn't this about the time of seasonal farm employment, and for much the same reason?

Just asking.