0 comment Thursday, May 29, 2014 | admin
I don't trust what the Bureau of Labor & Statistics reports. Not one whit. Have you seen the unemployment numbers for June? They're downright abysmal.
Thanks to this article in Forbes, I can shelve yet another dense post about the differences between U3 and U6. My preparatory chicken-scratch stickys, pictured below, I can now peel off my desk shelf.
(An aside: I couldn't find any flickr pictures to post. So, flickr, what's up with all this my-cat-is-so-special, you've-got-to-pay-me-for-his-photo stuff? Flickr, you are dead to me.)
But back to unemployment . . . .
Bottomline: The more folks who stop looking for employment, the smaller the denominator in the government's unemployment equation (i.e., the fewer number of folks being measured).
Put another way, if Harvard accepts 2,000 students every year from 10,000 applicants (instead of 2,000 out of 30,000), its acceptance rate would be a lot higher and its "Dear John, Get out of town" declination (unemployment) rate would be a hell of a lot lower. (It's a simple fraction: 2k/30k or 2k/10k . . . )
The same goes with unemployment.
So when 842,000 people get out of town (e.g., out of the labor force) in one month, and this causes unemployment to inch down only infinitesimally, it's really no time for cheering.
Hence, the unemployment rate appears to be improving, but it's all a mirage.
The unemployment rates in Michigan provide an excellent illustration of how bad unemployment numbers can sound "good."
For a thorough and accurate unemployment primer, watch Khan Academy's video below, not this:
P.S.: Your kids will crush on him, too. Khan has videos on addition, subtraction, division and multiplication, algebra, physics, even the Geithner P-PIPS! Videos for all ages and stages, excellent and free!
Thanks to this article in Forbes, I can shelve yet another dense post about the differences between U3 and U6. My preparatory chicken-scratch stickys, pictured below, I can now peel off my desk shelf.
(An aside: I couldn't find any flickr pictures to post. So, flickr, what's up with all this my-cat-is-so-special, you've-got-to-pay-me-for-his-photo stuff? Flickr, you are dead to me.)
But back to unemployment . . . .
Bottomline: The more folks who stop looking for employment, the smaller the denominator in the government's unemployment equation (i.e., the fewer number of folks being measured).
Put another way, if Harvard accepts 2,000 students every year from 10,000 applicants (instead of 2,000 out of 30,000), its acceptance rate would be a lot higher and its "Dear John, Get out of town" declination (unemployment) rate would be a hell of a lot lower. (It's a simple fraction: 2k/30k or 2k/10k . . . )
The same goes with unemployment.
So when 842,000 people get out of town (e.g., out of the labor force) in one month, and this causes unemployment to inch down only infinitesimally, it's really no time for cheering.
Hence, the unemployment rate appears to be improving, but it's all a mirage.
The unemployment rates in Michigan provide an excellent illustration of how bad unemployment numbers can sound "good."
For a thorough and accurate unemployment primer, watch Khan Academy's video below, not this:
P.S.: Your kids will crush on him, too. Khan has videos on addition, subtraction, division and multiplication, algebra, physics, even the Geithner P-PIPS! Videos for all ages and stages, excellent and free!
Labels: Bureau Of Labor And Statistics, Leaving Work Force, Misleading Unemployment Numbers, U3, U6, Unemployment, Workers
0 comment Saturday, May 17, 2014 | admin
Oh, like say the new unemployment figures. announced today. "Unemployment" is down because more people dropped out of the work force -- just flat-out stopped looking for a job. Hardly good news.
Let me explain. Suppose ten people in a hundred have no job but they're looking for one. That's a 10% unemployment rate on the U3 line. Scary.
But if five of those ten people take a job-search break, that brings "unemployment" down to 5%. It's called the "labor force participation rate."
In fact, the number of unemployed people who aren't even trying to find work is at a 30-year high. And they don't "count." See how bad good news can be?
On a brighter note, this is definitely the time to do something really bad, what with the Charlie Sheen coverage and Quadafi and all. What's that? What about Mark Sanford?
Umm, who's Mark Sanford?
Labels: Flying Under The Charlie Sheen Radar, Labor Force Participation Rate, Mark Sanford, U3, U6, Unemployment Rate, Uruguay