Just 8.5 percent? No way says ZeroHedge blog. He says the “real jobless rate is 11.4% with a realistic labor force participation rate.
One does not need to be a rocket scientist to grasp the fudging the BLS has been doing every month for years now in order to bring the unemployment rate lower: the BLS constantly lowers the labor force participation rate as more and more people “drop out” of the labor force for one reason or another. While there is some floating speculation that this is due to early retirement, this is completely counterfactual when one also considers the overall rise in the general civilian non institutional population. In order to back out this fudge we are redoing an analysis we did first back in August 2010, which shows what the real unemployment rate would be using a realistic labor force participation rate. To get that we used the average rate since 1980, or ever since the great moderation began. As it happens, this long-term average is 65.8%.
We then apply this participation rate to the civilian noninstitutional population to get what an “implied” labor force number is, and additionally calculate the implied unemployed using this more realistic labor force. We then show the difference between the reported and implied unemployed.
Finally, we calculate the jobless rate using this new implied data. It won’t surprise anyone that as of December, the real implied unemployment rate was 11.4%
…basically where it has been since 2009. And because we know this will be the next question, extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%, which should be just before the presidential election.”
He has charts at his blog that illustrate his points.
The main stream media can tout these numbers all they like, but America isn’t buying it. Even my plumber told me (we were not discussing politics) that he “doesn’t believe any numbers the government puts out any more.”
Yes, that’s what eventually happens in dictatorships.