Unemployment Drops To 8.6% (Not Really)

The Labor Department has released its unemployment figures for November, and the media are all celebrating the new government figures showing that unemployment has dropped to 8.6%. I've even seen some Democrats rejoicing because the new numbers should help the president in his bid for re-election. But while I hope the president does get re-elected, I'm too much of a realist to rejoice in these silly government numbers.

The fact is that there is a serious flaw in how the government counts the unemployed -- a flaw that leaves millions of the unemployed uncounted. The Labor Department says there was a net of 120,000 jobs created in November. But since it is a fact that about 150,000 or more new workers enter the workforce on average each month, it is downright silly to think a punt 120,000 jobs could have lowered unemployment by 0.4%. How then did the unemployment numbers shrink for November?

There is a clue in the second paragraph of the Labor Department report. It says there that the number of unemployed persons had dropped in November by 594,000 people (from 13.9 million to 13.3 million). So 120,000 jobs were created, but 594,000 people were dropped from the unemployment rolls. That doesn't compute, until you understand the government doesn't count all of the unemployed.

Anyone who has given up trying to find a job, or who hasn't looked for work in the last four weeks, simply isn't counted as unemployed by the government. And that is what has happened to most or all of those 594,000 people. They are still unemployed, and would love to have the opportunity to work, but are no longer counted because they have run out of options for finding work.

I'm not sure why the government plays this statistical game with unemployment, unless both Democrats and Republicans want to hide the real number of the unemployed from the public -- because the real number might frighten Americans since it would be significantly larger than the government number. And by playing with the numbers they can give the illusion that things are getting better -- when they really aren't improving at all.

The truth is that 120,000 new jobs wouldn't lower the unemployment rate at all -- even if the government counted all of the unemployed. And the real number of unemployed people in the United States easily reaches double-digits. But sadly, most politicians aren't interested in the truth and most of the general public believes what the politicians tell them.