When the most recent unemployment data was released just a couple of days after the second Presidential debate, there was some speculation that the numbers were “rigged” or “fudged”. We’ve been saying for a long time that even though they should be two sides of the same coin, the “Employment” numbers don’t track with the “Unemployment” numbers.
See: Employment vs. UnEmployment.
Basically, what the comparison chart shows is that unemployment is falling faster than employment is rising. Historically, in a recovery employment rises faster than unemployment falls.
But this time somehow “magically” unemployment is falling faster than employment is rising. How can that be?
Discouraged Workers are not the Answer
Some possible explanations up until this point were that people had given up looking for work (became “discouraged workers”) and so they were no longer counted as unemployed under the standard U-3 definition. This would of course make the U-3 number look better but wouldn’t indicate an improving economy. However logical this possibility sounds, the data does not hold up. If we look at the Bureau of Labor Statistics numbers for Unemployed persons by duration of unemployment we can see that the number of people unemployed for more than 27 weeks in September 2011 was 6,217,000 but in September 2012 that number had fallen to 4,835,000 so the long term unemployed had fallen considerably.
In the table below we see the number of “discouraged workers” in thousands according to the Bureau of Labor Statistics. Once again we see [Read more…] about Unemployment, Part-time Workers and Obamacare