Alright so this has been bothering me ever since the Obama administration came out with their unfathomable "7.8%" unemployment rate. No president has ever been re-elected with an unemployment rate above 8% so the administration has done a very good job to crunch the numbers and make it come to something below the 8% threshold. HOWEVER!! lets take a look at the reality of this situation. Where the hell are all these new jobs that are making the unemployment rate decrease this much? Im not seeing any difference out there, and im sure most of you are not seeing it either, because it is not there. The BLS (Bereu of Labor Statistics) came out in August with an 8.1% unemployment rate, and now for September it dropped a drastic 0.3%?
Quickly, let me explain how the BLS calculates the unemployment rate. First, you figure out the total number of unemployed people out there, then the total number of employed people out there. Then, divide the number of unemployed by the sum of all employed and unemployed. If it was written as a math problem it would look like this:
E= employed
UN=unemployed
UN/(UN+E)=?
Now, lets look at some facts because, unless there was a very significant change (which there has not been) the country's past trends should be staying relatively on track. For the recent 0.3% drop from August to September we saw a drop of 456,000 in the number of unemployed persons in the workforce. This is the largest september one month drop in the history of the BLS data going all the way back to 1948. Not only that, but we also saw a dramatic increase in the number of employed persons by 873,000; another [record setting] largest increase for a September one month change in the history of BLS data going back to 1948....hmmm....last time I checked we are going through the worst recession recovery since the Great Depression, yet we are seeing numbers that have not even been seen during our strongest economy conditions.
Now let's compare these numbers to the averages of the history of the BLS data. According to the facts, based on a non-seasonally adjusted basis a typical September sees a decrease in the number of employed due to the end of temporary summer seasonal hires. The BLS reports show a decrease anywhere from 100,000 to over a million depending on whether the country is going through a recession or not. There is VERY RARELY an increase in the number of employed going into September (an increase has only happened 6 times since 1948 and 4 of the 6 times the increase was under 100,000). HOWEVER, this September shows an increase of 775,000 employed persons. No, that is not a typo, the number is seven hundred and seventy five thousand. That number is nearly five times greater than the previous high. Again, according to the BLS data on a non-seasonally adjusted basis, the number of unemployed dropped by the largest amount since 1948. Seem a little weird???? Well it gets even weirder! The non-seasonally adjusted part-time workers data from the BLS has only shown an increase in part-time workers a total of 3 times. Just like everything else we have seen so far, this number too has strayed far from the usual, seeing a tremendous increase.
So, according to these numbers, we have seen the most incredibly dramatic positive swing in our workforce since 1948, yet the TRUE AND ACTUAL condition of our economy shows nothing to support these crazy numbers. Is our president fixing the numbers to get votes? There is no real proof to say that, but come on...it doesn't take a rocket scientist to see this.
PLUS, the published unemployment rate does not even account for all of the Americans who stopped looking for jobs because their searches found no results. Realistically, the rate is more around 12%, but that would look bad to voters... On top of all that, what about college grads? I myself am a recent college graduate, graduating from Seton Hall University's Stillman School of Business. I had a very hard time finding a job as well as most of my fellow students. I graduated in May 2011 and I still know plenty of classmates that cannot find any jobs. An astonishing 50% of last years college grads are currently out of work.
Put all the pieces together and what conclusion do you come to?
source:seekingalpha
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