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Unemployment Deception

unlawflcombatnt

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Friday's decline in unemployment is another testament to the Bush administration's statistical chicanery. The raw numbers give an unemployment rate of 5.1%. However, using the mystical "seasonal adjustment," the rate declines to 4.7%. Though the payroll employment number rose by 193,000, the number of those who dropped out of the participating labor force increased by 168,000. Below is a copy of the "Not In Labor Force" numbers from the Bureau of Labor Statistics.



This information can also be found at the "Not In Labor Force" statistics from Bureau of Labor Statistics site at: N.I.L.F. During November the number of new dropouts from the labor force was 250,000. Thus, over the last 2 months the number of "Not In Labor Force" workers has increased by 418,000. In fact, at a different section of the U.S. BLS site, the non-seasonally adjusted increase in the number of unemployed workers increased 652,000 in the last month alone, from 6.956 million in December to 7.608 million in January 2006. Over the last 2 months, the number of new payroll jobs has increased by only 233,000.This can be found at BLS: Employment

Thus the number of those dropping out of the labor force had increased almost twice as much as the number of new jobs, even when using "seasonally-adjusted" numbers. Using non-seasonally adjusted numbers for the last month alone, the 652,0000 workers dropping out of the labor force is over 3 times the number of new jobs created.

Both seasonal adjustment, and alteration of the "Not In Labor Force" workers has a tremendous effect on the unemployment rate. Those that drop out of the participation labor force (labelled as "Not In Labor Force") are not counted as unemployed. As a result their number is not included in the total for unemployed workers. With a total employment 143.07 million, and a total participating labor force of 150.11 million, there are 7 million unemployed workers. This gives an unemployment percentage of 4.7%. However, if the "non-seasonally" adjusted numbers were used (which are the actual raw numbers recorded by the BLS) the total number of employed workers would be 141.48 million, total participating labor force of 149.09 million, and a total of 7.608 million unemployed. Again, these latter numbers are the actual raw numbers, not the "adjusted" ones used to concoct the 4.7% number. Using the raw numbers, the unemployment rate would be 5.1%. Below is a copy of the page from the BLS showing these numbers.



These numbers can also be found at Employment.

Furthermore, even these latter numbers do not take into account the unusually high number of people who just stopped looking for work. It's just amazing how many more people have given up on finding a job under Bush than they did under Clinton. In fact, people have dropped out of the labor force under Bush at twice the rate they did during Clinton's last 5 years. In fact, had the dropout rate from the labor force over the last 5 been the same as that under Clinton, the number of those counted as "unemployed" would be 10.5 million, instead of the current 7 million. And this change alone would make the unemployment rate 7.0%, instead of 4.7%. If the seasonal adjustment factor had not been used as well, the total number unemployed would be 11.1 million, and the unemployment rate would be 7.3%.

Don't be deceived by a 4.7% unemployment rate. The numbers have been cooked by the Bush administration. Not only have they reclassified 3.5 million from unemployed into the "not-in-labor-force" category, they've used the so-called "seasonal adjustment" factor to reduce the rate even further. Without the "not-in-labor-force" manipulation, the unemployment rate would be 7.0%. But even when using that manipulation, the raw numbers put the unemployment rate at 5.1%. However, by the magic of the "seasonal adjustment" factor, that 5.1% has been further reduced to 4.7%.

The Bush administration is the most dishonest, corrupt, and incompetent administration in U.S. history.

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Goobieman

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unlawflcombatnt said:
Friday's decline in unemployment is another testament to the Bush administration's statistical chicanery.
If GWB was a Democrat, this post would be replaced with something like "Bush Economy Best in 50 years!"
 

Stinger

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These are all estimates. The seasonal adjustments are made each and every month and those not in the work place include the very many those who don't want to be in the work place. They are only good for comparision purposes from month to month and year to year. So the figures are realitive to previous dates.

You just can't stand it. And BTW Bush doesn't tell the labor department how to compile the figures.
 

oldreliable67

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unlawful,

First, it is really good to see somebody on DP who can really get 'behind' the headlines and dissect the numbers. That is a really valuable skill; if you are into econ and the business cylce, it will stand you in good stead time and again.

Second, if you're going to get into these numbers, you do need to do a bit more homework on seasonal adjustment, including the annual revisions to the factors as well as to the underlying benchmark figures. Seasonal adjustments are very necessary in order to discern the significant aberration from the normal, well, for lack of a better descriptor, seasonal fluctations.

Third, when you have done a little more homework on seasonal adjustments, I am confident that you will find that Commerce (and its various sub-depts) have been following very consistent procedures for determination of seasonal adjustment factors for many years. The X-11 variant was published in the public domain many years ago and is a well known routine. Should any shenanigans take place, anything unusual would be immediately picked up by the legions of number crunchers, including you and me.

Fourth, a) given the above considerations, b) considering that these people at BLS and DOL have been cranking out these numbers through many administrations of both stripes, and c) everything they do, every number they crunch, is public information, it is really beyond comprehension why you attribute these numbers to any interference by any administration, Bush, Clinton or whomever. Its ok if you have a point of view, in fact thats probably a good thing in that it means you are involved. But know that if you get your facts wrong about something so publicly available and scrutinized, you are most likely to get called on it.

Bottom line: good job, you are going in the right direction, but do some work on the underlying fundamentals. In other words, there is no conspiracy, there is no manipulation of data. Whether Bush is good or bad stands as a completely separate question apart from the seasonal adjustment factors used in this data.
 

Stinger

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In other words, there is no conspiracy, there is no manipulation of data. Whether Bush is good or bad stands as a completely separate question apart from the seasonal adjustment factors used in this data.

Hey I'M not the one saying there is! Unemployment figures are extrapolations of sampling. They are not precise numbers. They are estimates and are adjusted for many factors. There best use is realitive to each other over time to see trends. And no I don't think anyone at the WH is manipulating them.
 
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