Friday, October 5, 2012

Unemployment Numbers

Today's unemployment numbers are a Godsend to the Obama campaign.  The problem (for thinking people) is that the numbers are misleading.  The unemployment rate is comprised of multiple components including the number of people working, people looking for work, those who have given up looking for work, and those who never bothered to look in the first place.  These components yield the Workforce Participation Rate.  What makes today's number misleading is the way the pundits view and spin the Workforce Participation Rate.  When fewer people are essentially available to work, the numbers are skewed dramatically.

Look at it this way...

You have a sixteen ounce glass that represents the Workforce Participation Rate and this glass has four ounces of water in it.  Therefore, the glass is only 25% full and looks pretty empty.
You have another glass; four ounces this time, with three ounces of water in it.  This glass looks pretty full at 75%.

There's no more water in the four ounce glass.  It just appears to be more full by comparison.  The reality is the available amount of glass has shrunk, just like the available amount of participants to work has shrunk.  The 114,000 jobs that were added were primarily Federal, State and local government jobs, the salaries for which are paid by you and I through taxes.  If all factors are considered, the real unemployment rate is 10.7% as opposed to the 7.8% being crowed about in the news.  These are Labor Department numbers; not mine.

When laymen look at the numbers (or swallow them as spoon fed by the mainstream media), it's easier for them to think we're getting better when the reality is we're not even getting by.  I suppose the good news for the Obama campaign is that it's easy for them to spin the appearance to look favorable to an uninformed audience who can't (or won't bother to) tell the difference.