10% Unemployment Is Simply Phony Baloney!

Those Not Looking For Work Are Being Excluded From The Reports

Since the fall of last year, the official jobless rate has been hovering around 10%, whilst the unofficial rate has been over 17% at times.

The difference between the official and unofficial rates is that only people actively looking for work are now considered “unemployed”.

If a person gets laid off or fired and spends his or her days looking for work, then he or she counts as part of the labor force, even if they’re not earning a paycheck, but if they get discouraged and give up, then they’re don’t count!

In November, the labor force shrank by 134,000 people.

In October the decline was 73,000 people.

Analysts had predicted that December layoffs would number around 8,000 but the actual number of layoffs was 85,000 which is ten times higher, and if you include those that weren’t counted because they were no longer looking for work then at least 661,000 people dropped out of the labor force!

The Labor Force Participation Rate

The percentage of Americans 16 years or older who are either employed or looking for a job in December was 64.6%, which is the lowest level since 1985, which also indicates that the economy is in far worse shape than the headline numbers indicate.

The participation rate fell steadily all last year, with the biggest monthly drop occurring in December, meaning that if the same proportion of people were in the labor force today as a year ago, an additional 2.8 million people would officially be unemployed.

If And When The Economy Improves

Hopefully the economy will soon start to improve, but when it does, the people that gave up looking for work will start looking for jobs again and because of the official way of counting the unemployment rate, the unemployment figure will continue to rise, when in fact more people will be finding jobs.

So what’s interesting is that right now the public are being conned into believing that the unemployment rate is much lower than it really is, but when the economy does improve then it will look like it’s getting worse.

Unless of course the government switches to using the presently unofficial way of counting the unemployed!