Friday, January 06, 2012

So Now, It's 'Recovery Winter'!!

Remember 'recovery summer' and how that ultimately turned out? Well it's back,this time as 'recovery winter' . At least if you read the Soros media, outlets like the New York Times and other assorted Obamabot shills.

What they're jumping up and down about is a downtick in unemployment of a huge one tenth of a percent in December, from 8.6 to 8.5 and the 'robust' addition of 200,000 jobs.

I deconstructed this once before, but let's go over a few things again.

The percentages they're talking about are the 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 more accurate stat is the U-6 rate, which government never trumpets but is a lot closer to reality. It includes the above plus 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. That rate fell too...from 15.6 to 15.4.

Adding 200,000 jobs during the holiday season is also not evidence of an uptick, since a number of seasonal jobs open up and then close afterwards in places like retail. Normally unemployment rates go down between 1 and 2%. A reduction of a tenth of a percent tells us things are actually getting worse. Retailers and others expected a skinny Christmas and gauged their hiring accordingly.

As Zero Hedge points out, there's also a distinct possibility that the Bureau of Labor Statistics is cooking the books by lowering the labor force participation rate to provide an artificially 'lower' unemployment rate.

The market isn't fooled either - the Dow is down almost 40%, although it may come back a bit if there are sell offs.

Look for a 'correction' in this horse manure next month.

1 comment:

Sara Noble said...

I'll be anxious to see how the numbers go in February after seasonal workers are let go. The fact that there are millions of discouraged workers never hits their list -the actual numbers are 10% to15.2% if discouraged and underemployed are counted.

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