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Good news from Washington. Even though we lost jobs in November, the unemployment rate dropped from 10.2% to 10.0%. Is this the start of an economic recovery? Many journalist have reported this as "unexpected." But what is really unexpected is how the government gets to report a decline in unemployment even as the economy continues to shed jobs.
As we discussed in 10.2%? Would the Real Unemployment Please Stand Up, the government has an interesting way of calculating unemployment. Among the various methods, the government stops counting people when they stop actively searching for work - even if work can't be had. If you are too dispirited, you are no longer unemployed. Normally, just to keep the unemployment rate constant, we would need to add jobs due to increasing population.
But with the governments statisticians, you can lose jobs and still improve your unemployment rate. Here's how they did it with this latest round of numbers:
- The number of people counted as unemployed dropped by 325,000
- The number of people no longer counted as part of the labor force increased by 291,000
So about 90% of the drop in the unemployment rate can be attributed to people that are so dispirited that they no longer look for a job. Of course, as we've previously reported, the government has a wider gauge of unemployment - they call it the U-6. Right now, it's registering a reading of 17% because it takes into account the millions of disspirited unemployed and underemployed workers. To see the governments numbers yourself, click here.
Quite the economic recovery!
To be fair, at least we aren't continuing to race down hill, but don't think that the drop means the economy is on the upswing. Most of the jobs that were added were temporary workers and health care remains the only strong sector in the economy. Nearly all other areas lost workers, albeit at a slower pace.
Time will tell whether the decline in job losses is real or just a temporary interval; but one thing is certain, that 10.0% unemployment figure - that's just not real. Like this article? Share it on Facebook or more!
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