A Rising Unemployment Rate is NOT Good News!

I read with interest an article by US News this morning that made me wonder what some people put in their coffee.

The headline was “Why a Rising Unemployment Rate is Good News”

Well a rising unemployment rate is definitely not good news! Especially for those who recently lost a job, or for those who had given up looking for work.

Let’s take a hard look at the real numbers:

First the true number of unemployed Americans is 11.44% not the 9.9% that other sources are misquoting. Their “misquote” has been based on their acceptance without question the numbers from the Department of Labor, which were misleading, “I am being kind”.

Currently we have 154,715,000 people employed in the US aged16 and over, while 17.7 million are unemployed. 15.3 million Americans unemployed and acknowledged by the labor department and another 2.4 million marginally attached and not counted, but never the less a part of the “real” work force.

The method to determine the unemployment rate is to take the total number of unemployed and divide it by the total number of employed. In short 17.7 million divided by 154,715,000 gives us the 11.44% unemployment rate.

In Simple terms the Unemployment Rate = 'Unemployed Workers' divided by 'Total Labor Force'.

In fact the true numbers of unemployed may even be higher than 11.44% because there are millions of workers that have given up and lost hope.

What these other sources failed to incorporate in their elucidations was that we had 444,000 initial claims filed against a backdrop of an alleged 290,000 hiring’s, this is still a net loss of 154,000 jobs! But don’t forget that 66,000 were temporary workers hired by the US government for the census. If we remove them from the count because they are not full time the picture gets even worse! The net loss goes up to 220,000 net job losses.

A net loss is a net loss no matter how you skin the orange!

America is still shedding jobs!!

The economy is being carried by Americans, some 8 million strong who have given up on any idea of saving their homes, and are spending their money purchasing things they have done without for the past two years, this support is a temporary measure at best.

When we can see 300,000 jobs created each month, over and above job losses, we will see a real recovery. However the Fed itself feels that may be a decade away.

News should be accurate, and give facts. Not a false sense of hope!