Friday, December 02, 2011

The Real Numbers On Unemployment

There's this Drudge headline today...HO HO HO: UNEMPLOY RATE 8.6%. Only when you delve into the numbers do you realize that far from being anything to celebrate, it means things are getting worse.

Seasonally, this time of year normally sees an uptick in employment numbers because of temporary jobs, mostly in retail. That uptick is normally between 1 and 2%. An reduction in unemployment of a measly .3% is a sign that not only is the economy not getting better but that retailers expect meager holiday sales and have adjusted their seasonal hiring accordingly.

Another sign of the times is the emergence of a company that allows parents whose budgets are strained to rent toys for their children instead of buying them retail.

It's also worth repeating that the 8.6% is the 'official' U-3 unemployment rate. It accounts only for the people who are receiving or have applied for unemployment benefits and are actively seeking work.

The U-6 rate, which government never trumpets is a lot closer to reality. It includes people no longer actively seeking employment, people who are not covered by unemployment, like people hired as independent contractors or the owner of the small dry cleaning business or restaurant that closed its doors in your neighborhood last week or people let go with not enough quarters of employment to qualify for benefits or from part time and seasonal jobs. As of November, 2011, that rate was 15.6%.

In that context it's worth noting that new claims for unemployment rose last month to a seasonally adjusted 402,000, the first time it's been over 400,000 in months. And this, again is at a time when such claims normally decrease because of seasonal employment.

The president, his apparatchiks and their allies in the media will point to this 'drop' in unemployment as a sign that we have begun a recovery from recession and that President Obama's policies are working just fine. it isn't and they aren't.

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