Job Losses Make The Unemployment Rate Better?

Last month, our economy shed another 20,000 jobs. Yet, the unemployment rate went down from 10% to 9.7% (Click to See the Full CNBC Story: "Economy Sheds 20,000 Jobs But Rate Drops to 9.7 Percent").

The Bureau of Labor and Statistics (BLS) said that the rate went down because they "found" 541,000 jobs that they hadn't counted before. But, in contradiction to that number, the BLS also said that our economy shed more jobs than had been previously thought. Instead of our economy losing 7.2 million workers since the beginning of the recession, it is now estimated that 8.4 million workers actually lost their jobs in that very same time frame. That's 1.2 million more jobs lost in comparison to the 541,000 that the BLS said they had magically found. Yet, still, the unemployment rate dropped!

Remember, at one time the unemployment rate was 10.4 percent. Since then we have continued to lose more and more jobs. But, unbelievably, the rate has managed to drop to 9.7 percent in this latest month's report. That's almost a miracle! And, how convenient going into this year's election cycle.

Most people will just look at the headline number of 9.7% and will see that the unemployment rate is getting better without even questioning how illogical that number actually is. And, politically, that's all that the Obama Administration and the Democrats really want.

As I had noted before, it is hard to believe that the national unemployment rate has fallen when the majority of States and a majority of our metropolitan areas are seeing higher and higher rates of unemployment each month.

As Mark Twain aptly said: "There are lies, damned lies, and statistics." However, I would think that if Mr. Twain lived today, he might just say: "There are lies, damned lies, and the Bureau of Labor and Statistics."

Please also note that the BLS is arbitrarily "shrinking" the workforce by excluding those people who have stopped looking for jobs -- the so-called discouraged worker. I will write a blog on this distortion in the not too distant future.