The Unemployment Game Show: Are You *Really* Unemployed?

[Rajiv]

Mint Explains Why The Real Unemployment Rate Is 17.2 Percent

The U.S. unemployment numbers are out today, and most headlines will show that the U.S. unemployment rate in November was 10.0 percent, down from 10.2 percent in October. That number is depressingly large, but even that under-counts the true number of unemployed. For instance, it doesn’t count those people who don’t have a job and have given up looking for one, or those who have found marginal part-time work but still can’t make ends meet and are still looking for a full-time job.


The government keeps stats on all of these “marginally attached workers” and people “employed part time for economic reasons” (rather than by choice). If you add all of those people in, the total unemployment rate in the U.S. is 17.2 percent, compared to 12.6 percent a year ago. The only good news is that number is down from 17.5 percent in October.


To explain all of this (and I guess to remind people why it’s important to budget in these trying times), the folks at Mint prepared the video below. Despite its attempt to be lighthearted, it’s probably the most depressing cartoon you’ll see all month.

[Rajiv]

Re: The Unemployment Game Show: Are You *Really* Unemployed?

Also useful to understand - Presto! Unemployed people vanish before your very eyes

The big economic news today is the unemployment rate dropped slightly.

The rate unexpectedly fell to 10 percent, from 10.2 percent in October, as employers cut the fewest number of jobs since the recession began. The government also said 159,000 fewer jobs were lost in September and October than first reported.
If part-time workers who want full time jobs and laid-off workers who have given up looking for jobs are included, the so-called underemployment rate also fell, to 17.2 percent from 17.5 percent in October.

Understand that I'm suspicious of any government numbers, especially positive economic numbers, because politicians have a long tradition of lying with them. So when these numbers came out so much better than everyone expected, I decided to look at the raw numbers.





The first and most obvious thing that jumped out at me was how the civilian labor force dropped by nearly 100,000 people, in both the seasonally adjusted (SA) and non-seasonally adjusted (NSA) numbers. The number of people not in the labor force climbed about 290,000, both SA and NSA. That brought up the obvious question of: where did those people vanish from?


The number of employed went up by 227,000 in the headline, seasonally adjusted numbers (only 47,000 in the non-seasonally adjusted numbers). Therefore it wasn't the employed that got dropped off the labor force.
It turns out that 375,000 unemployed people (SA) simply vanished from the numbers like magic. Houdini would be envious.


How is that possible? Did all these unemployed people suddenly get independently wealthy and no longer need a job?



To understand how this could happen you need to look at the initial claims unemployment report from yesterday.
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