Real Unemployment in America
BLS reports this morning:
Nonfarm payroll employment rose by 120,000 in March, and the unemployment rate was little changed at 8.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in manufacturing, food services and drinking places, and health care, but was down in retail trade.
But as “Tyler Durden” writes:
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, completely counterfactual when one also considers the overall rise in the civilian population.
Then Zero Hedge goes on to quantify our real unemployment rate, minus fudging:
To get a realistic labor force participation rate. we used the average rate since 1980, 65.8%. We then apply this participation rate to the civilian noninstitutional population to get what an “implied” labor force number is, and…it won’t surprise anyone that as of December 2011, the real implied unemployment rate was 11.4%.
The BLS “harmonizes” its numbers by using an unrealistic labor force participation rate. So what is the real job deficit?
- Job losses – Based on a Durden analysis, America has lost 5.2 million nonfarm jobs since the start of the 2007 recession. Employment, which stood at 138 million in Dec. 2007, has dipped to 132.8 million.
- Labor force expansion – The labor force is growing by 90,000 people each month, or 4.6 million since Dec. 2007. Looking at this trend over a decade: 33 million joined the workforce since 2000, but only 4 million jobs have been added since then.
Adding the 5.2 million jobs lost to the 4.6 million labor-pool expansion and you arrive at an official job deficit of 10 million.