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Unemployment Update PDF Print E-mail
Written by John D. Buerger, CFP®   
Monday, 07 December 2009 09:21
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John Buerger248,000 People Are Missing?

How do you lose a quarter of a million people?

If you are a US Government statistics bureau the answer is, "You just say they don't exist."  If it makes the numbers you have to report better, then your bosses and their bosses will all support your efforts.

Don't worry about the news media or Wall Street.  They want the numbers you report to look better so they won't say anything.  Don't worry about the public, if you have the news media and Wall Street going along with you, the public isn't going to know the difference. 

It's just economics anyway - which is a stupid discipline full of crazy people who make no sense and have no touch with reality, right?  I mean, what's a quarter of a million people in a country with 350 million?  It's just a blip.  We won't miss them.

Unemployment Drops?

The unemployment numbers were released yesterday and ... Good News ... unemployment dropped!  Woo Whoo!  I'm so excited.

So how does unemployment "drop" when a net 11,000 jobs were lost?  The answer lies in the way the numbers are manufactured - and I chose that word very carefully, because that is what the BLS (Bureau of Labor Statistics) does with unemployment data.

Unemployment Dropped Because the Workforce is Shrinking

The reason the unemployment figures dropped for the month of November was because according to the BLS there are 98,000 fewer workers out there than there were in October.   What happened to these people?  Beats me.  Maybe they all died of H1N1 but we must believe that the BLS numbers are the truth, right?  98,000 Americans have disappeared.

So you understand the numbers even better, the American population is actually increasing at a rate of 125,000 to 150,000 per month.  In order for the unemployment rate to stay steady, we have create that many jobs every month.  So the BLS numbers are even more geri-rigged because rather than showing a population increase of 125,000 they show a decrease of 98,000 ... nearly a quarter of a million person discrepancy.

That's how you lose a quarter of a million people

Cooked Books and Your Wealth Health

So what does this mean to you?  If you have a job, do everything in your power to keep that job.  Things are going to remain very tight in the labor market for a very long time.  The economy is struggling, business is struggling and your governments (especially state and local) are going to continue to struggle.

If you don't have a job, start looking and keep looking.  That assures that your efforts will be counted in the statistics.  Here is a great video on how the BLS unemployment statistics game really works.  Thanks to mint.com for coming up with it.

I promise you that next year (probably in the February report on January's numbers) the government will come clean on some of this data, although there are plenty of other ways within the BLS model (for example in the birth/death assumptions for small business growth) to manipulate the figures that you see and hear in the news.

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Last Updated on Thursday, 17 December 2009 00:59