Saturday, January 8, 2011

Those Tricksy Employment Reports...

From a WSJ piece on Friday's unemployment report:
The unemployment rate fell to 9.4% from 9.8%, which led to celebration in some Washington quarters. But that improvement was largely because 260,000 eligible workers dropped out of the labor force.
The unemployment report these days, as reported by our curiously uncurious lamestream media, is biased by the “adjustment” described above: unemployed workers who have stopped looking for work (usually because they've given up) are not called unemployed for the purposes of this report.

So this time, as it has several times in the past year, the unemployment rate “declined” mostly because we stopped counting 260,000 unemployed people as unemployed.  This gives the public (most of whom have no idea this trick is being used) a decidedly incorrect impression about what's happening.

On the flip side, when the job market finally does start to (really) pick up again, many of those so-called discouraged workers will start looking for work again.  When that happens, they'll be counted as unemployed once more – and the reported unemployment number will go back up!  Once again, the public will be deceived – but this time, they'll think the situation is worse than it really is.

Wouldn't it be simpler and better to just report the real number, and to separately report how many have just plain given up?  I certainly think so.

Meanwhile, some conservatives are already anticipating a schadenfreude moment around the summer of 2012.  They're thinking that the economy will likely be improving by then, the unemployment rate will appear to be going up (for the reasons given above) – and Obama will be running for reelection...

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