Share This Page

Confusing jobless figures in need of explanation

| Saturday, Oct. 13, 2012, 9:00 p.m.

Controversy surrounded the Bureau of Labor Statistics announcement the day after the first presidential debate indicating the unemployment rate had decreased from 8.2 percent to 7.8 percent.

President Obama, likely smarting from what most people agree was a victory by Republican Mitt Romney the night before, spoke of the drop in unemployment with great pride. He said the figures validate his contention of slow-but-steady economic improvement and asked voters to give him four more years to right the economy. The news was greeted by a rise in stock markets.

The jobs report met with skepticism from Republicans, who questioned the timing and the figures. A number of economic experts expressed skepticism, saying it appears odd that the percentage of unemployed would fall while the economic growth rate declines.

Despite some insistence otherwise, however, it is unlikely the numbers were “cooked.” Rather, the unemployment statistics are confusing and need explanation.

Under former President Clinton, the Bureau of Labor Statistics mandated new guidelines to exclude certain groups from the list of unemployed. This rendered the published figures unreliable as a true picture of unemployment.

Under Clinton's directive, all who had been unemployed for so long that they no longer qualified for unemployment benefits are excluded. Even though they are, in fact, unemployed and progressively impoverished.

Anyone who becomes discouraged and gives up seeking a job for more than 28 days, or who compromises by accepting part-time jobs for economic reasons, is excluded.

These “guidelines” shift vast numbers of those actually unemployed off the official U-3 list of those unemployed. Calculating under these Clintonian guidelines, the bureau reported September's official unemployment rate as 7.8 percent, down from 8.1 percent.

In addition, the bureau publishes a U-6 unemployment figure that includes those who have been forced by economic circumstances to accept part-time employment. That rate remained at 14.7 percent in September.

The noted Shadow Government Statistics publishes the total unemployment rate based on the pre-Clinton methodology — reporting September's rate at a staggering 22.8 percent.

Regardless of which political party is in office, government spokespeople focus exclusively on the official U-3 count, the heavily doctored, minimum figure. They avoid references to the larger unemployment figures that expose the realities: 23 million Americans struggling to find work.

Recent “official” monthly U-3 figures have shown signs of falling from the 10 percent reached in 2010. Some economists find this inexplicable, especially when economic growth is falling. However, during a recession, students leaving college are more likely to accept part-time jobs in lieu of permanent employment.

In September, 582,000 people accepted part-time jobs. But they are excluded as unemployed from the 7.8 percent U-3 figure. That's why some economic experts believe the 14.7 percent U-6 figure, which remains flat, is more correct.

The bureau's published Civilian Employment to Population Ratio shows 5 percent less of our population employed than in 2008. This lends credence to the 14.7 percent U-6 rate as more realistic.

John Browne, a former member of Britain's Parliament, is a financial and economics columnist for Trib Total Media. Email him at johnbrowne70@yahoo.com.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.