Sunday, February 8, 2009

600,000 jobs lost in January 2009 - oh, and the REAL unemployment rate is 13.9%

Yes, you read that right.

600,000 people (nearly - give or take a few thousand for the margin of error) lost their jobs in the month of January just past (MSNBC horror article here).

Lets skidaddle over to the government unemployment statistics page.

What do we see?

A 7.6% unemployment.

'Always question' is my motto, so lets take a quick trip through the land of google.

Wall Street Examiner:

Let’s stop kidding ourselves. The sugar coated headline unemployment rate reported by the government is completely bogus. The real unemployment rate buried in the Federal Government’s data tables, including discouraged workers and those who are considered marginally attached or working part-time because they cannot find full time work, is now 12.2%, the highest it has been in 15 years. This number is up 33% over the past 12 months.

Financial Week:

The analysis by North American economist David Rosenberg indicates that the actual unemployment rate, while normally higher than the official one by the Bureau of Labor Statistics, hit a level not seen since at least 1994. The good news: Inflation is not much of a threat as a result.

As Mr. Rosenberg explained, what the official unemployment rate misses is the vast degree of ‘underemployment’ as companies cut back on the hours that people who are still employed are working. Those hours have declined 1.2% in the past twelve months.

The BLS still counts people as employed if they are working part-time, but the number who have been forced into that status because of slack economic conditions has ballooned nearly 70% in the past year, according to the study

When that amount of slack in employment is taken into account, Mr. Rosenberg found that the ‘real’ unemployment rate has actually climbed to 13.9%, an all-time high for the period he studied, and up from 13.5% in December and 11.2% a year ago.

But how this be?

The government would not fudge numbers, right?


In 1983 President Reagan needed his economic plan to look robust. So he lumped 1.5 million U.S. Army, Navy, Air Force, and Marine service personnel in with the civilian workforce. Overnight the unemployment rate was reduced by .2%.

In 1994 President Clinton employed a different approach. He re-defined marginally attached and discouraged workers. After 1994 a worker was NOT considered unemployed if he or she had given up hope and had not looked for a job in the last four weeks or was employed part-time but wanted full time employment. Really? If you have been out of work for a year and want gainful employment but have given up hope you are suddenly not there?

That's right kids - if you do not find a job within a specified period of time after getting laid off/fired, you cease to exist as a number in the machine.

You are an Orwellian unperson.

Please quietly kill yourself so you do not skew statistics; thank you.

Bonus Material: Just to cheer you up!

Reuters: Great Depression jobs parallel may not be far flung

"We are in a very, very different place than the U.S. economy was in the 1930s," James Poterba, president of the National Bureau of Economic Research told a recent Reuters Summit.

Or are we? Figures collected for Reuters by John Williams, from the electronic newsletter, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem.

By his count, if unemployment were still tallied the way it was in the 1930s, today's jobless rate would be closer to 16.5 percent -- more than double the stated rate.

Sweet dreams!


Anonymous said...


Watch James Cramer basically admit he breaks the law all the time manipulating the market shorting stocks by spreading rumors, faking out the WSJ, and sussing out stupid journalists. Its amazing, and disgusting.

iowa-girl-in-korea said...

I would love to come back to the US but I am very scared I won't have a job and will go into debt just to survive. Yikes!

AmericanGoy said...

Kenny from kennyssidashow - I think you are doing the links to my articles WRONG :-)

Iowa girl - it is a worldwide depression. Scary year ahead for all of us, wherever we find ourselves.

Anthony Morrow said...

Good anaylsis, AG but I think that your numbers are conservative. If you haven't seen it, there is a website that lays this out graphically.