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Did 1 Million Job Seekers find Work in April?

By Roger O'Daniel

According to the Bureau of Labor Statistics (BLS), "Yes."  Here is the link to their latest report.

Dennis Jacobe, Chief Economist for Gallup says what Minnesotans call a "Yabut."  It means "Yes, but that is not the whole story."  Here is the link to his analysis. 

The link is so long that it might not fit some browsers.  Here is a summary with translation.

"The number of unemployed fell to 11.9 million in April from 12.9 million in March. Part of this decline came from a reduction in the size of the workforce of about 400,000 as the workforce participation rate fell to its lowest level since 1981. The rest resulted from an increase of about 600,000 in the number of employed Americans."

Translation:  400,000 no longer actively seek work because their unemployment expired and the BLS stopped counting them.  600,000 found jobs.

"As a result of these household survey findings, the BLS reported an unadjusted unemployment rate of 7.7% -- down from 8.4% in March. In contrast, Gallup's unadjusted unemployment rate, based on nearly 30,000 random phone interviews, was 8.3% -- also down from 8.4% in March."

"The slow economy suggests April new jobs created were likely a lot closer to the BLS payroll increase of 115,000 than the household survey's nearly 600,000. It also suggests that the unadjusted unemployment rate is probably closer to Gallup's 8.3% than the government's 7.7%. In turn, the foundation supporting the government's decline in its seasonally adjusted unemployment rate to 8.1% seems a lot weaker than that supporting Gallup's survey results showing an increase in the adjusted unemployment rate in April. "

Translation:  BLS cooked the numbers again.  Gallup got 8.3%, not 7.1%.

The Back Story

There is another side to this story – Social Security Disability Income (SSDI) fraud.  Bloomberg explains it in the following link.

These two paragraphs got my attention.

“The number of workers receiving SSDI jumped 22 percent to 8.7 million in April from 7.1 million in December 2007, Social Security data show. That helps explain as much as one quarter of the decline in the U.S. labor-force participation rate during the period, according to economists at JPMorgan Chase & Co. and Morgan Stanley. “

“The participation rate -- the share of working-age people holding a job or seeking one -- was 63.8 percent in March after falling to a three-decade low of 63.7 percent in January. Disability recipients may account for as much as 0.5 percentage point of the more than 2 point drop since the end of 2007, the economists calculate, and that contribution could grow when some extended unemployment benefits expire at the end of this year.”

Translation:  People getting SSDI are not counted as unemployed seeking work.  People whose unemployment benefits expire are not counted as unemployed.  BLS can cook the numbers by getting more people in the SSDI program.  Are your unemployment benefits about to expire?  No problem.  Just apply for SSDI and the checks keep rolling in for the rest of your life.  Heck of a deal.  AND BLS can tell the gullible public that the unemployment rate fell when it actually grew.  The BLS is not only cooking the numbers; they are about to burn up the stove doing it.

A Modest Proposal

Merge the Bureau of Labor Statistics (BLS) and the Congressional Budget Office and name it the Bureau of Statistics (BS).  We all know what BS really means, don’t we.  My apologies if I offended a member of the bovine population.

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Tags: BLS, Bloomberg, Gallup, unemployment


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Comment by Roger O'Daniel on May 7, 2012 at 8:16am

The post has been updated to include the Bloomberg article.

The unemployment rate is not what it appears to be.  It improves when unemployment benefits expire.  It improves when people apply for and receive Social Security Disability Income.  It improves when people retire and start drawing Social Security benefits.  Part of the data is reported later than other data used to calculate the percentage.  The BLS uses what it calls "the birth-death model" to estimate the unreported portation.  They compare the number of companies going out of business with the number of companies going into business to estimate the size of the labor force.  They never bother to correct the estimate when the actual numbers come in.  They do not include under-employed seeking full-time employment.  They double-count people holding two part-time jobs.  The true unemployment number is not published by BLS.  It is available only to the political elites.  They call it "embargoed."

Comment by Catherine on May 6, 2012 at 11:29am
Comment by Michael Brennan on May 6, 2012 at 2:31am

No, 1 million workers fell off the unemployment rolls. The unemployment is still above 12% but only 8.1% are receiving assistance. It is fuzzy math to make Obama look good, he has nothing else economically he can use to counter Romney in the major debates.

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