More Unemployment Magic

Once again the Bureau of Labor and Statistics (BLS) has reported another truly unbelievable unemployment report with the unemployment rate dropping from 8.5% to 8.3% in a single month. Quite the feat when you compare that to all the other abysmal statistics regarding our economy:

• January saw a drop in consumer spending by 17%. And, it's consumer spending that drives 70% of our economy and, ultimately, jobs.
• January's Mass Layoffs Report was the highest in four months.
• 2011 saw the worst economic growth (GDP) in 2 years at an abysmal 1.7%
  
• Each week, more than 360,000 workers continue to lose their jobs.

The fact is that the BLS has been able to lower the unemployment rate by using a little "trick" in the way they calculate the unemployment rate. That trick is to shrink the labor force and, in doing so, create the impression that the employment situation is getting better; when, in fact, nothing could be farther from the truth. The fact is that, in January, 1.2 million unemployed workers were no longer counted by the BLS as being part of the workforce because those workers were so frustrated that they stopped looking for work. And, according to the methodology used by the BLS, a unemployed worker who stops looking for work is no longer a worker. When you really think about, that 1.2 million workers is an absolutely, astounding one-month number. It's as if the entire city of Dallas, Tx. (our 9th largest city) had been jobless and then, suddenly, in January, the entire population decided to stop looking for for work.

The truth is that, if the BLS wasn't able work its magic with the numbers, the true unemployment would be closer to 11% and not hardly at today's 8.3%. And, of course, Obama should be doing cartwheels over the fact the "his" Bureau of Labor and Statistic has been able to work all this magic at a time when Obama desperately needs a declining unemployment rate in order to get reelected in the Fall.