Cooking the Books on Unemployment Numbers to help 666

[Pepper]

The American Enterprise Blog:

 

Two places that give a simple overview of how the BLS cooks the books to help Obama.

 

First

Why the official 8.3 percent unemployment rate is a phony number—and what it means for Obama’s reelection

 

By James Pethokoukis February 3, 2012, 11:47 am

 

The January jobs report is out and it seems pretty strong, at least superficially. The unemployment rate fell to 8.3 percent from 8.5 percent, the lowest rate since February 2009. And the economy added 243,000 jobs, the most since April 2011.

 

But does anyone believe an “official” unemployment rate of 8.3 percent really gives an accurate picture of the U.S. labor market? Even though the unemployment rate fell, so did the labor force participation rate (as more Americans became discouraged and gave up looking for work). Here’s what that means:

 

1. If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7 percent then vs. 63.7 percent today—the U-3 unemployment rate would be 11.0 percent.

 

2. But let’s not go all the way back to January 2009. In January 2011, the unemployment rate was 9.1 percent with a participation rate of 64.2 percent. If that were the participation rate today, the unemployment rate would be 8.9 percent, instead of 8.3 percent. As an analysis from Hamilton Place Strategies concludes, “Most of the shift of the past year is due not to the improvement in the labor market, but the continued drop in participation in the labor force.”

 

 

Bottom line: The unemployment rate is dropping because economic growth continues to be so anemic that nearly 4 million Americans have quit looking for work and have been disappeared by the Labor Department. This still isn’t much of a recovery.

 

 

 

 

The following by Silverfiddle at Western Hero takes the above and makes it simpler

 

An Ebbing Tide Lifts Obama’s Boat

 

The simple calculation for unemployment before all the seasonal adjustments and so forth, is:

 

Unemployment Rate = Number of Unemployed / Total Labor Force

 

So the easy way to get unemployment down is to reduce the numerator in proportion to the denominator, and the easiest way to do that is to declare that the greatest number of unemployed workers are no longer looking for work, and therefore no longer “unemployed.” This shrinks the numerator relative to the denominator, making unemployment go down.

 

Obama is on track to be the only president to lose jobs during his term

 

 

Good graphs at both links

[Pepper]

 

From Western Hero

 

 

See also

Don't Be Fooled, The Obama Unemployment Rate Is 11%

 

See also

 

It's not mathematics, it's ideology

 

BY R.L. SCHREADLEY

Friday, February 10, 2012

 

 

"There are three types of liars: Liars, damn liars, and statisticians."

 

Mark Twain

 

The Bureau of Labor Statistics gave a broad boost to President Barack Obama's quest for a second term a week or so ago when it announced a 0.2 percent drop in the nation's unemployment rate. That rate is now the lowest since February 2009, and the president was quick to take credit for it.

 

"The numbers came down because more people found work," he said. "These numbers will go up and down in coming months ... but the economy is growing stronger, the recovery is speeding up." He urged Congress to get on board. "They've got to renew the payroll tax cut they've extended and do it without drama, without delay, without linking it to some ideological side issue. Now is not the time for self-inflicted wounds for our economy. Don't muck it up -- keep it moving in the right direction."

 

What President Obama and the other usual suspects did not say was that the same Bureau of Labor Statistics said that the American workforce fell by 1.2 million workers in January -- the largest one month drop ever. It shouldn't take a genius to make the connection between this and the much celebrated (and minuscule) drop in the official unemployment rate, a rate statisticians calculated by applying recently tweaked "seasonal adjustment" factors.

 

 

See also

 

Don't Be Fooled, The Obama Unemployment Rate Is 11%

Peter Ferrara, Contributor

 

When Barack Obama entered office in January, 2009, the labor force participation rate was 65.7%, meaning nearly two-thirds of working age Americans were working or looking for work.

 

When the recession supposedly officially ended in June, 2009, the labor force participation rate was still 65.7%.

 

In the latest, much celebrated, unemployment report, the labor force participation rate had plummeted to 63.7%, the most rapid decline in U.S. history. That means that under President Obama nearly 5 million Americans have fled the workforce in hopeless despair.

 

The trick is that when those 5 million are not counted as in the work force, they are not counted as unemployed either. They may desperately need and want jobs. They may be in poverty, as many undoubtedly are, with America suffering today more people in poverty than in the entire half century the Census Bureau has been counting poverty. But they are not even counted in that 8.3% unemployment rate that Obama and his media cheerleaders were so tirelessly celebrating last week.

 

If they were counted, the unemployment rate today would be a far more realistic 11%, better reflecting the suffering in the real economy under Obamanomics.