Does anyone really beleive the 'official' unemployment number?

Rick Moran
The Bureau of Labor Statistics, an independent agency of the federal government, released its unemployment numbers on Friday and after an arcane, but completely transparent process, determined that the official rate of joblessness was unchanged from last month at 8.3%.

It's not that the BLS tries to hide the bad news. They are statisticians, and therefore, interested in trying to build consistency within their computations. To that end, they have all sorts of formulas that are designed to smooth out seasonal and monthly fluctuations, remove variables like the number of discouraged workers (a figure that they can't quantify), and ignore the number of part time workers who might want to be working full time but can't find a job (another variable that is impossible to quantify).

I have taken some time to defend the BLS because so many on our side of the aisle believe that there's some funny business involved in figuring the official rate. Although everyone knows the real unemployment number is quite a bit higher than the "official" figure, the reason has nothing to do with politics and everything to do with the way statistics are computed.

For those who want a truer picture of joblessness, there are many places on the internet where the figures supplied by the BLS are examined in a more political manner; i.e., without the adjustments and subtractions. Again, these numbers are supplied by the BLS; they aren't hidden. They are in the open which makes the idea of some kind of conspiracy a little weird. If the BLS were trying to hide the "true" rate of unemployment, why publish the numbers that would expose the conspiracy?

The Daily Caller has a good analysis of what might be closer to the "real" unemployment rate today:

There's so much hidden unemployment in the labor force that even Friday's improved jobs numbers failed to decrease the official unemployment rate of 8.3 percent.

In February, the private sector added 233,000 new jobs, but 476,000 non-working people began looking for a job. According to Bureau of Labor Statistics (BLS) rules, only by seeking work did those individuals officially become unemployed.

That's because BLS does not count workers as unemployed unless they have actively searched for work in the last four weeks. As a result, millions of non-working people are not counted as unemployed by BLS officials.

The statistical quirk is the flip side of the administration's effort to minimize the high level of unemployment for the last three years, and it may hinder progressives' efforts to claim victory on the jobs front in November.

If more non-working people begin searching for jobs, "the economy is going to have to create an average of 246,000 jobs between now and November, just to keep the unemployment rate at eight percent, and so we are not even at that pace yet," said Doug Holtz-Eakin, an economist and the president of the American Action Forum.

If the BLS rules weren't in place, the current unemployment rate would be somewhere around 11 percent, analysts say. The unemployment number would be as high as 15 percent if part-time workers seeking full-time employment were recognized in the unemployment rolls.

This quirk today helped Republicans discredit claims by liberals in the White House and the media that President Barack Obama's policies are reviving the economy.

Now we all know that the "official" number is the one that gets reported and absorbed by the voter. The business press does a lousy job in this country of reporting on statistics like this - including the "official" rate of inflation that everyone who goes to the grocery store knows is wildly off target. Surely part of it is ideological bias - the desire to downplay bad news for an administration they support. But in talking with economists and some of the better business writers like David Goldman (aka "Spengler"), you discover that there is an equal amount of just plain ignorance about business at work among the so-called financial press.

The GOP is absolutely right in trying to get the true unemployment figures out to the public. How successful they are will depend on how the voter views the economy through their own experience. Are they, their family, and their friends employed? Or are they still finding it impossible to get a job?

Ultimately, this determines whether the "official" unemployment rate is accepted or not.



The Bureau of Labor Statistics, an independent agency of the federal government, released its unemployment numbers on Friday and after an arcane, but completely transparent process, determined that the official rate of joblessness was unchanged from last month at 8.3%.

It's not that the BLS tries to hide the bad news. They are statisticians, and therefore, interested in trying to build consistency within their computations. To that end, they have all sorts of formulas that are designed to smooth out seasonal and monthly fluctuations, remove variables like the number of discouraged workers (a figure that they can't quantify), and ignore the number of part time workers who might want to be working full time but can't find a job (another variable that is impossible to quantify).

I have taken some time to defend the BLS because so many on our side of the aisle believe that there's some funny business involved in figuring the official rate. Although everyone knows the real unemployment number is quite a bit higher than the "official" figure, the reason has nothing to do with politics and everything to do with the way statistics are computed.

For those who want a truer picture of joblessness, there are many places on the internet where the figures supplied by the BLS are examined in a more political manner; i.e., without the adjustments and subtractions. Again, these numbers are supplied by the BLS; they aren't hidden. They are in the open which makes the idea of some kind of conspiracy a little weird. If the BLS were trying to hide the "true" rate of unemployment, why publish the numbers that would expose the conspiracy?

The Daily Caller has a good analysis of what might be closer to the "real" unemployment rate today:

There's so much hidden unemployment in the labor force that even Friday's improved jobs numbers failed to decrease the official unemployment rate of 8.3 percent.

In February, the private sector added 233,000 new jobs, but 476,000 non-working people began looking for a job. According to Bureau of Labor Statistics (BLS) rules, only by seeking work did those individuals officially become unemployed.

That's because BLS does not count workers as unemployed unless they have actively searched for work in the last four weeks. As a result, millions of non-working people are not counted as unemployed by BLS officials.

The statistical quirk is the flip side of the administration's effort to minimize the high level of unemployment for the last three years, and it may hinder progressives' efforts to claim victory on the jobs front in November.

If more non-working people begin searching for jobs, "the economy is going to have to create an average of 246,000 jobs between now and November, just to keep the unemployment rate at eight percent, and so we are not even at that pace yet," said Doug Holtz-Eakin, an economist and the president of the American Action Forum.

If the BLS rules weren't in place, the current unemployment rate would be somewhere around 11 percent, analysts say. The unemployment number would be as high as 15 percent if part-time workers seeking full-time employment were recognized in the unemployment rolls.

This quirk today helped Republicans discredit claims by liberals in the White House and the media that President Barack Obama's policies are reviving the economy.

Now we all know that the "official" number is the one that gets reported and absorbed by the voter. The business press does a lousy job in this country of reporting on statistics like this - including the "official" rate of inflation that everyone who goes to the grocery store knows is wildly off target. Surely part of it is ideological bias - the desire to downplay bad news for an administration they support. But in talking with economists and some of the better business writers like David Goldman (aka "Spengler"), you discover that there is an equal amount of just plain ignorance about business at work among the so-called financial press.

The GOP is absolutely right in trying to get the true unemployment figures out to the public. How successful they are will depend on how the voter views the economy through their own experience. Are they, their family, and their friends employed? Or are they still finding it impossible to get a job?

Ultimately, this determines whether the "official" unemployment rate is accepted or not.