This came in over the e-mail transom from a regular reader of this blog. It is clear that the Bureau of Labor Statistics is in the manipulation business. ZeroHedge has the details in Real Jobless Rate Is 11.4% With Realistic Labor Force Participation Rate
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 as more and more people “drop out” of the labor force for one reason or another. While there is some floating speculation that this is due to early retirement, this is completely counterfactual when one also considers the overall rise in the general civilian non institutional population. In order to back out this fudge we are redoing an analysis we did first back in August 2010, which shows what the real unemployment rate would be using a realistic labor force participation rate.
To get that we used the average rate since 1980, or ever since the great moderation began. As it happens, this long-term average is 65.8% (chart 1). We then apply this participation rate to the civilian noninstitutional population to get what an “implied” labor force number is, and additionally calculate the implied unemployed using this more realistic labor force. We then show the difference between the reported and implied unemployed (chart 2). Finally, we calculate the jobless rate using this new implied data. It won’t surprise anyone that as of December, the real implied unemployment rate was 11.4% (final chart) – basically where it has been ever since 2009 – and at 2.9% delta to reported, represents the widest divergence to reported data since the early 1980s. And because we know this will be the next question, extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%, which should be just before the presidential election. [Emphasis in original]
Labor Force Participation since 1980:
Reported and Implied number of Unemployed:
Difference between Reported and implied unemployment rate:
I want to know why Congress is allowing the BLS to foster this fraud on the American Public. By November it will appear the economy is doing just fine, with million of citizens still out of work.
On Wednesday, Congressman Tom McClintock is going to speak at our local Tea Party Patriot Luncheon and I plan to ask him if he is aware of this deception and what can Congress do to apply some corrective measures. I suggest readers not at the Luncheon to do the same. Call your Congressman, we cannot let this fraud continue to November!