Unemployment Rate Falls to 6.1%…. or does it?


September 6, 2014 by JImbo


Those who are regular readers of mine know what comes next. However, those who are new… welcome! You’re going to learn the difference between the REAL unemployment rate and what the politicians TELL you the unemployment rate is.

This is what they tell you in the bold headlines:

US Unemployment Rate Falls to 6.1%

This is what they hide in the fine print:

“US Labor Participation Rate Lowest Since 1979”

What do these mean?

Why is this important?

Well, the “Unemployment Rate” is pretty clear… in theory. It should show how many people aren’t working that COULD be working. 

As you can read, it’s been going steadily down.

However, that really doesn’t mean much since the figure they give you is sanitized. It has been tweaked TWICE (at least) to be essentially meaningless.

Let me show you.

First, the Labor Participation Rate is very low.


Note that the sharp rise on the left is due to women entering the workforce during the 1970s and 1980s. Then it plateaus for almost 20 years. Then it declines with the 2008/2009 “Recession.” Doesn’t it look like the “Recession” is continuing to you? If it were over, wouldn’t the number of people working go back up?

The Labor Participation Rate is the number of people who ARE working who CAN work. But… “wait” I hear you say. “Isn’t that basically what the unemployment rate is?” In theory, they should be the opposite of one another. The Unemployment Rate should be those not working. The Employment (Participation) Rate should be those who are working.

However, that’s not quite how it works.

You can tell because 6.1% and 63.3% don’t add up to 100% do they?

What about the other missing 30.6%?

Ah and there’s the beauty of it. They disappear!


As you can see, if we INCLUDED them, the unemployment rate would be quite a bit higher.

In fact, it’d be even higher than THAT. You see the “new” way of calculating unemployment doesn’t include anyone who isn’t accepting unemployment checks from the government. Once yours runs out at 99 weeks you *POOF!* disappear.

Also, they are not counting those who “choose” to exit the labor force. For example, mothers and those who retire. They COULD work (many mothers and retired people do in fact work.) However, the government just fails to count them to make it seem like there are more jobs than there really are.


As you can see, virtually the entire “reduction in unemployment” can be directly tracked to the “disappearance” of people from the labor force. They have simply given up looking for work, so they’re no longer counted.

The OTHER way unemployment should be higher is if they used the “old fashioned” way of counting. If you truly took all the factors involved in “unemployment” and used the same figures they used in say the 1930s during the “Great Depression” things would be quite different.


Reported THAT way, the unemployment rate is actually closer to 23%.

So, take your pick.

If you want to know how many people don’t have jobs that CAN work, it’s 23%.

If you want the number of people who WANT to work but can’t find jobs, it’s 12%.

if you want the number of people on unemployment checks, it’s 6.1%.

Congratulations Mr. President you have a very low unemployment rate… if you just get rid of 17% of the US population.

And don’t mention the 10 million illegals here who aren’t counted.

And don’t factor in inflation… which is about 10% (not the 2% you are admitting to.)

But that’s another story.










One thought on “Unemployment Rate Falls to 6.1%…. or does it?

  1. […] after tackling the myth of Low Unemployment, let’s move onto something just as exciting… […]


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