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Bad numbers – We need a new name for “Unemployment Rate”

Bad numbers – We need a new name for “Unemployment Rate”

The unemployment report was just released by the Bureau of Labor Statistics.

Bottom line:  115,000 new jobs added, pundits had expected 177,000.  “Unemployment Rate” drops to 8.1%, but as Ezra Klein admits, only because so many people left the workforce (over 300,000 more):

Because of this anomoly of the “unemployment rate” dropping because people are leaving the workforce, we need a new name for it. We have an absurd situation where the Obama campaign will celebrate the dropping “unemployment rate” when in this economic climate of people just giving up, the dropping rate actually reflects hopelessness not hope.

Suggestions?

Update:  Alternative title, Economy adds 115,000 jobs, 522,000 leave workforce

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Comments

Don’t they have a word for this in the stock market – where the company reports an increase but you look at the report and it’s not from increased revenue but from massive cost-cutting aka layoffs? At which point Jim Cramer starts yelling”Sell! Sell! Sell!”

jimzinsocal | May 4, 2012 at 9:01 am

Its a huge can of worms that again illustrates the failure of the great “stimulus” package. And voters are correct in asking a simple question: Where’s The Beef?
The finast minds the administration could buy concluded the stimulus would do the trick. They even created graphs and charts to boot! If that wasnt “proof” of their combined intellectual syperiority? Nothing is. So we were told.

But here we are faced with a stagnant economy and stagnant job market. The results so meager it has sent the government spending advocates grasping for scapegoats.
Not enough spending Krugman cries..thats why. If the stimulus had only been twice or three times as much…why then….
And if that doesnt work as an explanation? Try the lack of inflation. Krugman longs for higher inflation..thats key he reasons.
To which I respond simply: The theory hasnt worked…so the answer is to inflate the GDP results?
Sounds like a winning policy to me.
On Planet Xircon 3.

No mystery here. Direct government hiring and spending would fix the problem…of course, that’s currently politically impossible, since conservatives are committed to hoping America suffers.

But we already know how to fix these sorts of problems…FDR showed us the way a long time ago.

No big mystery.

    votermom in reply to Tosbin. | May 4, 2012 at 9:29 am

    Julia, is that you?

      By gosh, it is! The pony-tail gives her away. Quick chuck her a handful of free condoms and she’ll go entertain someone else for a while.

    Ragspierre in reply to Tosbin. | May 4, 2012 at 9:43 am

    FDR showed us how to take a garden-variety depression…

    and transform it into the GREAT FLUCKING DEPRESSION.

    And PROTRACT IT FOR YEARS.

    What an idiot…!!!

    MaggotAtBroadAndWall in reply to Tosbin. | May 4, 2012 at 9:44 am

    “FDR’s policies prolonged Depression by 7 years, UCLA economists calculate”

    http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx

    raven in reply to Tosbin. | May 4, 2012 at 9:47 am

    Right. 17.9% unemployment rate in 1939 — seven years under FDR.

    radiofreeca in reply to Tosbin. | May 4, 2012 at 10:51 am

    Everybody being a government employee has not worked in a single country that tried it. Even the USSR and China figured out that it doesn’t work. But if I’ve missed a country where it did work, I’d be happy for you to point it out to me.

    Europe and Japan are figuring out that unlimited government spending doesn’t cause your economy to soar either. This isn’t politics – it’s economics. You can’t take more water out of the bucket than you put in. Jobs are only sustainable if there is something of real value being manufactured as a result, to pay for those jobs – people hired as regulators don’t produce anything. Doesn’t matter if they’re Democrats or Republicans.

    raven in reply to Tosbin. | May 4, 2012 at 11:12 am

    Follow your logic, Krugman.

    Let’s say public sector employment doubles. Or triples. Or quadruples. How would that “combat the recession”? What does the public sector produce? How does it serve the economic needs of a community beyond its limited and necessary purpose? How does it create wealth, more jobs, prosperity?

    Who pays for it if not an expanding tax base driven by a growing private sector? Who pays for its salaries and pensions? Why are public employee unions bankrupting states? What has happened to California?

    Figure it out. You’re the one with the Nobel Prize.

    malclave in reply to Tosbin. | May 4, 2012 at 7:35 pm

    “Direct government hiring and spending would fix the problem”

    Sounds good to me. Just tax government workers at over 100% so the jobs are self-sufficient.

pilgrim1949 | May 4, 2012 at 9:18 am

Obama Unelectability Rating (known around the White House as “O.U.R” disapproval level):

The lower it can be manipulated, the better the prospects for another “three-hour-cruise”…on the Titanic II.

“115,000 new jobs added, pundits had expected 177,000.”

And that 177.000 number is a catastrophe in itself. It’s a lowball estimate hoping to create a positive surprise for the market to rally on but we need what. 240,000 new jobs per month just to absorb population growth job demand?

I’ll bet most of the jobs created in the Bush/Obama era of runaway spending and runaway debt have been minimum wage (or below) jobs too.

Note that the job participation peaked just as the GOP took control of everything:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/05/Participation%20Rate.jpg

It’s like I keep saying, replacing Obama is not going to change much of anything. We need to finish the job we started in 2006 and 2008 to clean house in the GOP. So far we are failing.

    Ragspierre in reply to Pasadena Phil. | May 4, 2012 at 9:40 am

    Are you going to ply us with more Occupy Wall Street tropes, Fillie?

    Seriously? Are you going to tell us again how they have it right, and America is doomed because it is like a Monopoly game?

    Are you REALLY going to do the Bush = Obama dance?

      Please show me where on that chart the glorious small government Bush era appears. Now STFU. You don’t persuade anyone with your lies and slander but I guess that is now you Texan Kennedy Republicans won the Alamo isn’t it? No wait! You lost that battle too!

        Ragspierre in reply to Pasadena Phil. | May 4, 2012 at 2:02 pm

        So, ANOTHER response limited to name-calling and personal attack.

        Oh, and your usual illuminating retort of “because…shut up!”.

        Cite to any…ANY…lie I’ve told, Fillie.

        Ragspierre in reply to Pasadena Phil. | May 4, 2012 at 2:13 pm

        Gosh, Fillie…

        Put up a reference to me lauding Bush as “small government”.

        But, seriously, CAN you read a chart?

        CAN you associate REAL stuff…like 9-11 and the hit our economy took (why do you think bin Laden targeted the Twin Towers…with commercial aircraft?)…with employment?

        CAN you see a difference in the trend lines from the Bush era and the Obamic Decline?

        Always happy to help!

        Ragspierre in reply to Pasadena Phil. | May 4, 2012 at 2:39 pm

        http://www.qando.net/wp-content/uploads/WEBa1jobs0113_345.gif_thumb.png

        MAYBE…just perhaps…you can discern a difference in that chart.

        Hopin’…

Most of the jobs lost, for many months now, have been public employees at the state and local levels, as well as the federal level.

These have dragged employment down, exactly when public employment should have been expanding, to combat the recession.

Another way conservative mythology hurts America.

    Ragspierre in reply to Tosbin. | May 4, 2012 at 9:36 am

    Support your bullshit, please.

    Standard Liberal solutions:

    Recession: Hire more government employees that we can’t afford to pay to keep unemployment down.
    Expansion: Why do we want to get rid of anybody in government, we have plenty of money, we should hire more. Plus we need to raise their pay and retirement to compete with private sector jobs.

    jimg in reply to Tosbin. | May 4, 2012 at 3:24 pm

    It’s mind boggling people like Tosbin actually believe what they do.

    But they do. And they’re proud of it.

Ragspierre | May 4, 2012 at 9:34 am

Actually, there’s nothing wrong with the words we use.

It is the people using them.

Obama and his minions lie. They do it flagrantly.

What we need is a new convention for reporting joblessness, and it should reflect reality.

That would put TRUE unemployment up in the teens.

“exactly when public employment should have been expanding, to combat the recession.”

If you believe in your own philosophy, the only way it works is to expand the military work force. The multiplier effect for expanding the military is second to no other job sector.

Quantifying people’s misery is difficult. If we divide the number of workers by the general population, that’s a fairly reliable number. It doesn’t take into account those who choose not to work (or are too young, sick, elderly), but it works better than the the current shell game.

There is no need for a name change. When voters see one of five friends, neighbors or relatives unemployed they will know the real number.

Obviously the new name should be Funemployed (According to the LA Times, at least)

Question for those who know:

Is the “unemployment rate” just a statistic based on who is getting unemployment benefits?

This would not an accurate way to measure who is not working but ostensibly is seeking employment, or who has given up, etc. It also would be able to be manipulated by reducing or extending benefits. It also couldn’t accurately measure who is “working” but is essentially underemployed compared with abilities and credentials, which isn’t something to applaud either. It also isn’t going to accurately measure the self-employed.

Or is the “unemployment rate” based on statistically accurate sampling surveys?

    Ragspierre in reply to janitor. | May 4, 2012 at 11:11 am

    http://en.wikipedia.org/wiki/Unemployment#United_States_Bureau_of_Labor_Statistics

    As you’ll note, there is not just one “unemployment rate”; nor is it now measured the way it used to be, which sort of makes the numbers now deceptive as they are often compared to numbers during the Reagan admin.

    One thing that causes people a lot of “malaise” is hearing lying lies from government, and seeing the conflicting reality about us. Cognitive dissonance is not something any of us like.

      hstad in reply to Ragspierre. | May 4, 2012 at 3:51 pm

      “Cognitive dissonance is not something any of us like.” Especially, since we must act upon it to reconcile our views. Which penalizes reality! Excellent point!

NC Mountain Girl | May 4, 2012 at 10:31 am

People aren’t stupid. Not only do they see that their relatives friends and neighbors aren’t working, they notice little things like this.

“For 59 out of the last 60 weeks, the weekly jobless numbers have been revised, after the fact, always in the same direction: higher. That’s unheard of.”

Read more: http://www.foxbusiness.com/investing/2012/05/02/emac/#ixzz1tuYX7nnh

stevewhitemd | May 4, 2012 at 10:47 am

It does seem that Obama is losing Ezra Klein, doesn’t it?

Wonder what the good Mr. Klein had to say on Journolist last night.

Midwest Rhino | May 4, 2012 at 10:49 am

The “still seeking employment” rate

“Haven’t thrown in the towel yet” rate

“Still clinging to Hope and spare Change” rate

QE3 might roll in before the election to attempt to goose the stock market, but I don’t see it helping employment (except maybe more government jobs). Maybe Obama introduces Americorps on steroids … put all seeking employment into government social service jobs, serving Obama’s reelection campaign.

Answer for janitor:

The commonly cited unemployment rate is formally known as U-3 at the Bureau of Labor Statistics. It is taken from a survey of households and relies on self-reporting. You are officially unemployed if you are out of work but have been actively looking for work in the last four weeks. Whether or not you are receiving unemployment benefits is irrelevant.

There is also something called the ‘insured unemployment rate’ and to be in this category you must be receiving unemployment benefits. That number is currently 2.6%. It is much narrower measure, obviously, than U-3.

There are also broader measures than U-3 that include various forms of un- and underemployment. The most widely cited of these is U-6 which includes discouraged workers, involuntary part-timers, etc. U-6 is currently 14.5%.

The broadest measure of labor market slack is the employment/population ratio. That currently stands at 58.4% meaning that 58.4% of adults have jobs. The other 41.6% of the adult population are not working. This includes non-working spouses, the retired, and the unemployed.

All of this data is available to everyone. Go to the BLS website on the first Friday of any month and you can see it all for yourself.

Escaped from RI | May 4, 2012 at 11:27 am

I predict that by election day, we’ll be down to 5K new jobs in October, new claims will be 477K, down from last weeks upwardly revised (has anyone notice that 61 of the last 62 weeks have been upwardly revises?) 487K. And thanks the the Bureau of Made Up Numbers, the unemployment rate will be -3.4% due to no one being left in the labor force.

When people take themselves from the unemployment rolls to the “disabled” rolls, that has to skew figures as well.

“So far this year, nearly 1 million workers have applied to get on the disability program. […] As IBD reported recently, more than 5 million workers and their families have enrolled in the disability program since Obama took office.”

http://news.investors.com/article/610306/201205040931/labor-force-shrinks-as-disability-grows.htm

I predict that if Barry gets a second term, his unemployment rate will fall to zero because everyone will drop out of the work force and demand free stuff from teh gobment.

I think the term unemploymentrate should be changed to proletariat rate, which is what Barry wants us all to be.

I propose that the term “Unemployment Rate” be banned for being racist.

Then we can move on to deal with the hot temperatures in AZ by legislating that all thermometers read a comfortable 72 degrees at all times.

“Because of this anomoly of the “unemployment rate” dropping because people are leaving the workforce, we need a new name for it.”

The Hope-&-Change Rate. The percentage of people who HOPE things don’t get worse and for whom CHANGE can’t come soon enough!

I think this is a tough problem that we should seriously attempt to answer. You can compare current labor force participation to recent participation, but it’s not quite apples to apples. We have a larger part of the work force nearing retirement than in the past. So while I’m sure much of it is due to discouragement among the young, we can’t ignore that many people may simply be pushing their retirements up a little. We need to see numbers adjusted for retirement as well as find more specific reasons overall why people are dropping out.

Also, many people try to point to the U6 as the “real” unemployment rate, but the U6 tracks very well with the headline unemployment. So the party not in power likes to use U6 to flog the other since it’s a larger number, but it’s ALWAYS larger by a constant amount. It doesn’t add any information for deciphering the current economy that the regular unemployment rate doesn’t already contain.

How one man lives with no money at all!

On Yahoo’s main page: “Funemployment” on steroids! See, everybody, life under Obama can be fun and rewarding without such capitalist trappings as safe food, soap, or clean drinking water.

http://gma.yahoo.com/going-without-money-hurt-economy-one-mans-quest-211049892–abc-news-topstories.html

    Ragspierre in reply to OCBill. | May 4, 2012 at 3:17 pm

    The misanthropes of the Collective are bound and determined to reduce us proles to this kind of subsistence existence.

    Not the Collectivists themselves, of course.

    Obama is determined to impose Delusional Energy in place of Reality Energy, shrink the US by a program of decline, and subject us to our “proper” place in the world.

    Which is why he cannot be permitted more time in office.

You know, with the insufferable Ragspierre now having taken residence here as the self-appointed thread monitor, these threads are beginning to look more and more like Dan Riehl’s “Riehl World View” when Raggie was holding court there. No one comments there anymore. Good job Raggie! Now do you know why Michelle Malkin booted your sorry a$$? You act gets old fast.

Ragspierre | May 4, 2012 at 2:05 pm

Ironic, Fillie.

Anybody who wants a look at how YOU monitor a thread (project much?), and how tired people get of your personal attacks, has only to look at this…

http://michellemalkin.com/2012/05/04/labor-force-april-unemployment/#comments

Tells the tale, don’t it…?

… and another 10% or so are on an involuntary vacation.

None of this will be fully acknowledged until the collapse of over 10% of the economy supported through the accumulation of debt.

LukeHandCool | May 4, 2012 at 2:23 pm

Journalists quoting any drop in U3 without providing the context of the participation rate is somewhat akin to a political site quoting “conservative” Professor Jacobson without providing a link to LI.

[…] the question becomes, will we have an honest debate about jobs and the economy in this election, or will the spinmeisters pretend that the dropping […]

LukeHandCool | May 4, 2012 at 4:56 pm

Just when you thought nothing could surprise you:

From Yahoo News:

“Obama chose to focus on the fact that the rate of unemployment dropped from 8.2 percent to 8.1 percent …”

Forward.

Courage.

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