October 17, 2014 by JImbo
Oddly… JUST before an election there’s suddenly good unemployment figures. Who would have guessed that? It’s almost as if the party in office made it look better than it is to get votes or something…
So unemployment is supposedly down .2%, but most figures are unchanged?
As I like to do monthly, let’s unpackage this little enigma shall we?
First of all, we’re down quite a bit to start with. Remember this headline from last month?
That’s our first factor. Some of it was just a really bad prior few months. We have to dig out of THAT before we can get actual “growth” from where we were even a year ago. And that was WAY below where we should be.
Second, I know I keep harping on this but the Labor Participation Rate is down again. Now it’s at 62.7%. In 2008 it was at 66% and that wasn’t particularly high, but more of a low-average.
Right now, that .1% we just dropped is about 160,000 people (out of 156 million workers) That’s half of your 329,000 “more jobs” reported above. New jobs weren’t created. The government simply waved a wand and said “Sucks you got fired, but you don’t exist anymore. POOF!”
Again, I say this all the time but for the new people… if you quit you’re not “unemployed.” After all, you quit. So… no unemployment check for you! If you don’t collect an unemployment check you aren’t “unemployed.” You simply don’t exist.
If you get fired and don’t collect unemployment… you don’t exist either.
If you raise a family and don’t work outside the home… you don’t exist.
Those 160,000 people just disappear. If they’re not there as “unemployed”… then the “unemployment figure” goes down! (Don’t have those lazy bums holding us down anymore!)
Third, the figures aren’t exact. They generally have at least a .1% variance at the best of times. So, we’re within the margin of error most of the time.
So add that up now.
The Feds claim that unemployment went down .2%
We were below even the anemic level we were this spring. That .1% is to catch up to where we were in the summer.
They’re “hiding” more potential workers by making them “disappear” off the rolls. That’s another .1%.
Best guess is we’ve broken even this month.
Of course, that includes a number of other factors that don’t particularly bode well. It doesn’t address the illegal job force issue. It doesn’t factor in the very low gas prices which aren’t a good sign long term, but are good short-term as low energy costs. They didn’t seasonally adjust the figures this month either, which means it looks a bit rosier than expected (farm enrollment especially until the migrants get done in the fields.)
However, I’m gonna call this one a draw. We didn’t really lose ground. We just didn’t do as well as they SAY we are.
Generally you need an unadjusted 300,000 new jobs to break even* and a solid 500,000 more jobs a month for many months in a row to show TRUE growth.
* Figuring a 2.4% yearly increase in population, that’s roughly a .2% growth in jobs every month just to keep up with the extra people born and immigrating to this country.
I know, I know. “Well what would you be happy with?” For starters, a solid 500,000 new jobs per month for a year. Also a RISING Workforce Participation Rate. Over 66% would be nice. If you satisfy those two requirements, it doesn’t matter what the unemployment rate does.
We will have more people working, and that’s all I care about.