Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
GBPUSD Top in Place, GOLD Price Ready to Rocket? - 27th May 17
Silver Mining Stocks Fundamentals - 27th May 17
BBC Newsnight Falls for FAKE POLLS, Opinion Pollsters Illusion for Mainstream Media to Sell - 27th May 17
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17
UK BrExit General Election 2017 - Will Opinion Pollsters Finally Get it Right? - 19th May 17
Gold Mining Junior Stocks GDXJ 2017 Fundamentals - 19th May 17
If China Can Fund Infrastructure With Its Own Credit, So Can We - 19th May 17
Evidence That Stocks are More Overvalued than Ever - 19th May 17
Obamacare May Become Zombiecare In 2018 - 19th May 17
The End of Reflation? Implications for Gold - 19th May 17
Gold and Silver Trading Alert: New Important Technical Development - 19th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

U.S. Real Unemployment Rate 10.2%, Underemployment at 20%

Economics / Unemployment Mar 20, 2011 - 04:36 AM GMT

By: Mike_Shedlock

Economics

Best Financial Markets Analysis ArticleI am very skeptical of BLS unemployment rates inching lower. Not only do the BLS reports discount millions of marginally attached and discouraged workers but BLS seasonal adjustments seem more than a bit unusual.


Gallup polls paint a far different picture. Please consider Gallup Finds U.S. Unemployment at 10.2% in Mid-March

Unemployment Rate


Part-Time Workers Wanting Full-Time Job


Underemployment


The only valid way to compare not seasonally-adjusted numbers is to compare the numbers to the same month a year ago. I added the red circles on the above charts to show just that.

Note that year-over-year comparisons of the unemployment rate, the underemployment rate, and the part-time for economic reasons rate, all show no significant change compared to a year ago.

Meanwhile the BLS would have you believe the unemployment rate fell from 9.7% to 8.9% over the course of the last year.

Jobs Situation About the Same as It Was a Year Ago

The government's February report on the U.S. unemployment situation suggests that 192,000 jobs were created last month and the unemployment rate declined to 8.9%, down from 9.7% a year ago. Federal Reserve Bank of New York President William Dudley and others said they were encouraged by this report.

However, Gallup's unemployment and underemployment measures have not shown the same gains in early 2011. Gallup finds an unemployment rate (10.2%) and an underemployment rate (19.9%) for mid-March that are essentially the same as those from mid-March 2010.

In part, the difference between Gallup's and the government's current job market assessments may be due to the government's seasonal adjustments. Gallup's U.S. unemployment rate is also more up-to-date -- its mid-March data include jobless figures for much of March, whereas the government's latest unemployment rate is based on the jobs situation in mid-February.

Most importantly, a key reason the government's unemployment rate is dropping apparently has to do with the so-called participation rate: the percentage of Americans who are counted as being in the workforce. The government's participation rate in February was at its lowest level since 1984. In essence, this tends to suggest that the government's unemployment rate may be declining because many people are becoming discouraged and leaving the workforce -- not because they are getting new jobs.

If this is the case, then neither Gallup's unemployment report nor that provided by the government is good news for the economy. It is equally bad news if people are out of work and looking for a job or just too discouraged to say they continue to do so. Either way, a lack of sufficient job creation to increase employment among those who want to work remains a major obstacle to U.S. economic growth in the months ahead.

Gallup offers reasonable commentary. There is no reason to be excited over the BLS dip in the unemployment rate.

Here is another way of looking at it, using the BLS' own numbers.

Nonfarm Payroll Employment - Seasonally Adjusted Total



According to the BLS, non-farm employment is lower than it was in 2002!

Household Data


In the last year, the civilian population rose by 1,853,000. Yet the labor force dropped by 312,000. Those not in the labor force rose by 2,165,000.

In January alone, a whopping 319,000 people dropped out of the workforce. In February (this months' report) another 87,000 people dropped out of the labor force.

Were it not for people dropping out of the labor force, the unemployment rate would be over 11% (Rosenberg pegs it at 12%).

On a year-over-year basis the number of people employed dropped by 125,000 yet we are supposed to believe things are getting better. From a jobs standpoint the best we can say is things are no longer getting worse. However, we can also state the BLS unemployment rate is a complete distortion of reality.

Finally, take a look at that employment chart and tell me where the demand for housing is going to come from. Here's a hint: you can't do it. For further discussion of housing, please see Shrinking Labor Pool Means Shrinking Demand For Housing.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2011 Mike Shedlock, All Rights Reserved.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife