Friday, February 04, 2011

Unemployment Down, Fewer Jobs Created: Hooray? UPDATED

Look at the Employment Situation Summary, released today. It says: "The unemployment rate fell by 0.4 percentage point to 9.0 percent in January, while nonfarm payroll employment changed little (+36,000), the U.S. Bureau of Labor Statistics reported today."

And also:

"The unemployment rate (9.0 percent) declined by 0.4 percentage point for the second month in a row. (See table A-1.) The number of unemployed persons decreased by about 600,000 in January to 13.9 million, while the labor force was unchanged."

36,000 jobs added
13,900,000 unemployed
36,000 / 13900000 = 0.002%

0.4 - 0.002 = 0.398

See the problem?

If unemployment declined by 600,000, or 0.4%, and there were 36,000 new jobs, as the report says, doesn't that mean that we stopped counting some people as unemployed? Does that mean that .398% of the workforce retired or died, or what?

I'd say that these feel-good figures mean nothing, but I am not an economist. Could someone explain?

Administrations, Republican or Democrats like to put a favorable spin on crap, but what does that say about the health of the economy?

So, then, I am not as bad at math as I feared. It's easy to show that unemployment has decreased if you stop counting the unemployed. Most politicians, spin-meisters, and statisticians deserve all the contempt that they usually get.

No comments:

Copyright 2004-2012