What Is the Real Unemployment Rate?
Just beneath the surface, the government's latest employment report shows how much damage the POR (Pelosi-Obama-Reid) economy, now well into its sixth year, has done to the country's economic fabric. The impact of Obamacare, if it isn't stopped, will only compound it.
Even the relatively decent news in Uncle Sam's October report was suspect.
Employers are said to have added 204,000 seasonally adjusted jobs. But as the Associated Press noted, the government, thanks to the 17 percent government shutdown, had an extra week to retrieve its surveys from employers, and therefore had a higher than usual response rate. It doesn't seem as if this should matter, but apparently the Bureau of Labor Statistics has a history of estimating high in its initial releases when it has more time to collect and assemble the data. Additionally, economist Mark Zandi believes that "businesses may have inadvertently counted employment for an extra week."
Even more questionable are the BLS's revisions to August and September. As seen below, the raw (i.e., not seasonally adjusted) figures show no revised net improvement during those two months. But that goose egg somehow turned into 60,000 additional jobs during seasonal conversion:
Then there's the unemployment rate. Even though it ticked up to 7.3 percent, that was also supposedly good news, because it would have dropped if it weren't for the 850,000 federal government workers furloughed during part or all of the partial shutdown and treated as unemployed.
The real problem, thanks to the POR economy's progenitors and the Obamanomics policies which have accompanied it since January 2009, is that the official unemployment rate is more unreflective of true job market conditions than it has ever been.
During Republican and conservative presidential administrations, those on the left, particularly in organized labor, often complained bitterly that the official unemployment rate fails to count discouraged workers and those who are working part-time for economic reasons. For some reason — I wonder why? — they're incredibly quiet these days, even though their complaint, as we will see, is far more valid.
In August 1982, AFL-CIO head Lane Kirkland contended that the previous month's official 9.8 percent unemployment rate, so adjusted, would have been 13.6 percent, or 3.8 points higher. That's interesting, because October 2013's seasonally adjusted "U-6" unemployment rate, after I adjusted the official 13.8 percent down by 0.2 points to account for those furloughed government workers, was that very same 13.6 percent, even though the official 7.3 percent "U-3" unemployment rate was 2.5 points lower than it was at the time of Kirkland's complaint.