An unprecedented 1.2 million people left the workforce last month. These people are not being counted in the unemployment numbers and to large degree caused the drop in the unemployment rate. In the same month that Obama is patting himself on the back and crediting his economic policies for jump-starting the recovery, “the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million”(http://bit.ly/xY6q9i).
This is the largest jump of people no longer in the labor force in 30 years. The Washington Post reported that if the unemployment rate counted the 2.8 million total people who want jobs but have stopped looking, it would sit at 9.9% rather than 8.3%. Additionally, if you were to count the under-employed, the real overall unemployment rate would stand at between 15-18% (http://bit.ly/xAhK8U).
Still other calculations have the unemployment rate as high as 22%, once the “long-term discouraged workers” are included in the calculations (http://bit.ly/xu5giF). These are the people who don’t have jobs, but have stopped looking for work because they feel no jobs are available.
John Williams, author of the “Shadow Government Statistics” website, argues that the federal government manipulates the reporting of economic data for political purposes. Williams’ “Official SGS Alternative Unemployment Rate” shows unemployment in January 2012 was 22.5 percent, a 0.1 percent increase over December 2011, whereas the BLS figures were designed to report a .8-point decline, from a seasonally adjusted U3 rate of 9.1 percent in January 2011 to a seasonally adjusted 8.3 percent rate in January 2012 (http://bit.ly/xu5giF).
According to the Table A-15 on the BLS website (http://1.usa.gov/13ggJW), released by the Bureau of Labor Statistics, their own reporting has the total unemployed at 15.1%, and if it is not seasonally adjusted, it is even worse - 16.2%. The tables in the attached slide show from Bloomberg, depict the drop in the participation in workforce in January 2012. Taken together, things aren't as rosy as the official reports will have you believe.
While it is true that the US economy added 243,000 jobs last month, because of the drop in the people participating in the workforce, the overall unemployment rate actually went up, not down. So, campaign speeches aside, there isn’t a lot to cheer about yet in our economy. It’s time the media and the government start reporting the truth.
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