Does Anyone Believe Job Numbers Anymore?

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Apparently the unemployment rate has fallen to 9%, which is supposedly a good thing.  If it were a meaningful statistic, it would be; however, it's a ridiculous number.  There are several reasons for this (which the media does report, which is good), not the least of which is the fact that when people stop looking for work they no longer get counted.

However, there are a couple of interesting things to note with the most recent story (which can be found here: http://www.forbes.com/feeds/ap/2011/02/04/general-financials-us-economy_8292705.html).

For starters, the government has begun to count the 'self-employed'.  I hope they have criteria for that, but I'm going to go out on a limb and say that those criteria, if not fairly flexible, are made to be fairly flexible.

Secondly, this quote is telling:

"And the participation rate, which is the percentage of the working-age population working or looking for work, fell to a 26-year low of 64.2 percent."

That means that of all the people of working age, less than 65% are either working or looking for work.  Even if we assume that 10 points of the percentage of that is from people going back to school or otherwise deciding not to work, that's still a full 25% unemployment rate.  (One would also assume that people going to school would still want to find work eventually.)  That's IF we assume those ten points are from that.  It's quite possible that the actual unemployment rate could be in the 25-35% range, which is a far cry from the 9% as reported.

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