Unemployment Figures: Somebody's Come Down With A Stats Infection
Jack Welch writes in the WSJ, "I Was Right About That Strange Jobs Report: The economy would need to be growing at breakneck speed for unemployment to drop to 7.8% from 8.3% in the course of two months."
How did they come up with these figures?
Well, they pulled them out of the area that the colonoscopy thingie goes up, obviously.
People are not rushing out to spend money, far as anyone can see or report; they're trying to figure out how to get that bag of discounted beans a little discountier. In Welch's words:
Let's get real. The unemployment data reported each month are gathered over a one-week period by census workers, by phone in 70% of the cases, and the rest through home visits. In sum, they try to contact 60,000 households, asking a list of questions and recording the responses.Some questions allow for unambiguous answers, but others less so. For instance, the range for part-time work falls between one hour and 34 hours a week. So, if an out-of-work accountant tells a census worker, "I got one baby-sitting job this week just to cover my kid's bus fare, but I haven't been able to find anything else," that could be recorded as being employed part-time.
...Bottom line: To suggest that the input to the BLS data-collection system is precise and bias-free is--well, let's just say, overstated.
(BLS is Bureau of Labor Statistics.)
Even if the BLS had a perfect process, the context surrounding the 7.8% figure still bears serious skepticism. Consider the following:In August, the labor-force participation rate in the U.S. dropped to 63.5%, the lowest since September 1981. By definition, fewer people in the workforce leads to better unemployment numbers. That's why the unemployment rate dropped to 8.1% in August from 8.3% in July.
Meanwhile, we're told in the BLS report that in the months of August and September, federal, state and local governments added 602,000 workers to their payrolls, the largest two-month increase in more than 20 years. And the BLS tells us that, overall, 873,000 workers were added in September, the largest one-month increase since 1983, during the booming Reagan recovery.
These three statistics--the labor-force participation rate, the growth in government workers, and overall job growth, all multidecade records achieved over the past two months--have to raise some eyebrows.
...The reality is the economy is experiencing a weak recovery. Everything points to that, particularly the overall employment level, which is 143 million people today, compared with 146 million people in 2007.
Note the increase in government workers. We have people employed by the state, hoovering up citizens' autonomy and their tax dollars for the state, regulating everyone to death (all the better to justify their jobs), and making it harder and harder to open or run a business.
Ultimately, we'll have about five people -- five very weary entrepreneurs -- that we put through numerous business-crushing hoops while expecting them to feed, clothe, and house the rest of the country.
Welcome to the United States of Freeloadia.
I have a small business myself. If I knew what I was getting myself into, I would have flipped burgers instead.
That is the real problem, they waste tax dollars they don't have and make it such a pain to create a viable business and hire people that it is easier to stay unemployed.
NakkiNyan at October 10, 2012 12:17 PM
The drop off was predicted. It seems that an election is coming up and it would hurt Barry's chance to get re-elected.
A lot of the decrease is that the 99 weeker's have aged out of the unemployment system.
Jim P. at October 11, 2012 6:02 AM
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