May 07 2012

Unemployment Debacle Cannot Be Covered Up By Poor Statistics

One thing that always amazes me with the left is their idiotic drive to believe in a biased number over brutal reality.  Last week the monthly unemployment numbers came out and we are supposedly on a glide path to economic repair because the unemployment rate dropped to 8.1%.

The fact is the 8.1% unemployment number is a sad joke. The number is based on an ever shrinking workforce size – which has been shrinking as people have given up on jobs and/or their unemployment support runs out. The fact is if you allow for a steady work force size, based on historical ratios to population size, then the current unemployment rate for April 2012 is 10.3%!

Why the government cannot or will not truly assess the economic situation is beyond me. Simply because if you understand the underlying economic issues, then you can address them (versus address some lesser issue or ignore the problem all together). This administration and this bloated bureaucracy is focused on CYA – not solving problems. Which makes their numbers as useless as their mythical shovel-ready jobs where when Obama took office.

Anyway, the method for computing the real unemployment is pretty straight forward. The growth in work force size has been very steady over the years, growing with the population. This can be seen in the April workforce graph below (blue area) for all Aprils since 2000. Note how even 9-11 and two wars did not impact the workforce growth (click to enlarge).

Since workforce changes over the year for seasonal reasons (e.g., high before Christmas, high in the Summer) it is best to look at one month over the decade to see this phenomena.

As can be seen in 2008 we finally hit a jolt that derailed the economy enough to hurt the workforce level. This can be seen for all the months I have run over the past year (see here, here, here, here, here for examples).  The fact the pattern shows up for every month is how we know this is not a seasonal issue, but a systemic problem with our economy. The red line shows where the workforce should be (and in this case there should be 3,385,000 more workers working). To compute the actual unemployment you simply compare those working against the nominal workforce level, not Obama’s shriveling one.

Clearly Obama and the Democrats failed to fix the economy with all their government, deficit spending. All that spending and look at the workforce level – still a mess. At least now we know trickle down government spending never works. We can put that little socialist concept into the dustbin of history where it belongs.

The real problem for the Democrats is this: no fudging of numbers can correct reality. The workforce is smaller – and making less. Therefore the economy has shrunk like never before in most of our lifetimes. A lot of able bodied people are out of work or working for less than before. And their lack of purchasing power is impacting every business in the country. This is what is really happening.

This is a sign of utter failure by the Democrats. And the hole they dug for us all will require too many years to work our way out of – unless we take a budget axe to government and stop deficit spending and begin a serious program off debt reduction. Can we afford four more years of this?


The same story can be found here, using different data to reach the same conclusions.

3 responses so far

3 Responses to “Unemployment Debacle Cannot Be Covered Up By Poor Statistics”

  1. jan says:

    Very convincing data, AJ. It’s too bad the government doesn’t lay it out like you have. However, the perception of how bad the economy is cannot be fudged. All people have to do is go out and ‘look’ at businesses around them, and they will see continuing ‘for lease’ signs being tacked up, store inventories either shinking or dormant, and a general feeling of malaise in the air. Now with austarity measures in Europe being refuted, in these recent elections, one has to wonder what’s next?

  2. Mike M. says:

    AJ, they don’t honestly assess the economic situation because it would doom Obama. And the entire Democrat Party. The political blowout would make 1994 and 2010 look like a mild adjustment.

  3. Layman says:

    Lies, damned lies, and statistics. We need to shout the truth from the rooftops because it will be hidden by the media.