4 ms·

The explanation is that the government massages unemployment figures to make the economy look better than it is. The government has been doing this for decades

The explanation is that the government massages unemployment figures to make the economy look better than it is. The government has been doing this for decades, under Republicans and Democrats, liberals and conservatives. Unemployment is one of the most widely watched and therefor political numbers; anyone who is in power wants it to look as good as possible. One of the tactics to make the official unemployment rates look better is to classify some unemployed workers as "not looking for work." Voila! They don't show up in the official estimates and it is their fault! Most economists are funded by the National Science Foundation (NSF) and other powerful institutions that have little interest in questioning the official numbers. Hence lengthy academic discussions to try to "explain" the seemingly odd behavior.

jack9 10y ago
It's shocking, just plain shocking, how short people's memories are, in regards to their own governmental details. The manipulations to deflate the unemployment numbers, I was cognizant of in high school, have never stopped. New techniques come up every administration (seemingly every year). It's like how "the tech industry innovation value" is now added to the UDP arbitrarily. Smoke and mirrors. Google "US employed population" then click "What percentage of the US population is working?" - What percentage of the US population is working? According to the October jobs report, the seasonally adjusted employment-to-population ratio was 59.2% last month, one percentage point higher than it was a year earlier. Over that same period, the “official” unemployment rate fell from a seasonally adjusted 7.2% to 5.8%.Nov 7, 2014
- extra88 10y ago
  For that 59.2%, who counts as employed and who counts in the population? To have 40.8% not employed, they must be counting people in school, people who are retired, probably stay-at-home parents, people with serious disabilities, and the people wealthy enough not to work. How is that a useful figure? The official figure doesn't include people who are too young or too old and doesn't include people who are not looking for work. Certainly there are some people who society would say should be looking for work and we'd like to count them amongst the unemployed but there isn't a good way differentiate them from the people who have good reasons for not looking for work. So the official number is based who says they are looking for work.
- tomjen3 10y ago
  That seems like a low number, but babies tend not to be allowed to work in this country, and more people are going to college, retirees are living longer. A better number might be NEET - self employeed under the retirement age vs entire population. Thats still not entirely fair, since it misses those who have deliberately chosen not to work, but that number is probably pretty small.
- nodamage 10y ago
  59.2% is quite misleading because it includes students and retirees. The next two paragraphs from your own source[1] say: One reason for the difference is that the share of Americans saying they don’t want a job has trended up since the Great Recession: from 31.9% of the working-age population in October 2008 to 34.6% last month (on a non-seasonally adjusted basis). Some of that increase, though, may be due to Baby Boomers reaching retirement age; as they leave the workforce over the next several years, labor economists expect the employment-to-population ratio to trend lower. Young adults staying in or returning to school also may be a factor. So if we look at just the 25-to-54 age group, which strips out most students and retirees, the employment-to-population ratio has been slowly improving since it bottomed out at 74.6% (not seasonally adjusted) in February 2011. Last month, 77.3% of all 25-to-54-year-olds were employed, which is well below the indicator’s pre-recession high in October 2006, when 80.7% of people in this age group were employed. [1] http://www.pewresearch.org/fact-tank/2014/11/07/employment-vs-unemployment-different-stories-from-the-jobs-numbers/ http://www.pewresearch.org/fact-tank/2014/11/07/employment-v...
  - jack9 10y ago
    > 59.2% is quite misleading because it includes students and retirees. Misleading does imply context, which is used to confuse the issue and has traditionally been used to alter the statistic to meet agendas. People who aren't looking for work, students, retirees, etc is irrelevant. It's a statistic about who is employed versus not employed as a relative portion. While I don't think there is a canonically sound source anymore, we have had a serious system problem for awhile. When even the curated sources by one agency are more pessimistic than the celebrated federal numbers, it's now a question of how wrong they are, not what they say.
  - lacker 10y ago
    Why should we exclude students and retirees from our key employment metrics? Society must pay for students and retirees, and the higher the employment-to-population ratio, the easier that is to do.
    - 10y ago
extra88 10y ago
"Massages" makes it sound like the change the measures on the fly which is not the case. See my other comment about counting those not working vs. those not looking for work.
- NumberSix 10y ago
  I use "massages" to cover two factors. First, the Bureau of Labor Statistics has redefined the way it measures unemployment and employment several times over the decades. In addition, there are a range of seasonal adjustments and other possible variations in the surveys and number crunching that are more difficult to understand and less well documented. See for example this discussion of discrepancies between the BLS unemployment rate and the Gallup Poll unemployment rate (since 2010): http://unemploymentdata.com/unemployment/is-the-government-fudging-unemployment-numbers/ http://unemploymentdata.com/unemployment/is-the-government-f... It is difficult to know if in practice the household surveys are done the same way each time and also what seasonal and "one-time" adjustments may be occurring either during the first measurement or subsequent corrections. As the discrepancies between the BLS and Gallup numbers indicate, there is evidence of shorter term massaging not captured in the major redefinitions, such as excluding "discouraged workers" who want a job but supposedly have not looked for one recently, in the 1994 revisions to the unemployment measures.
dv_dt 10y ago
This view really bothers me. The generally reported "unemployment" figure in the media does have the problems you mention. But the US Gov't through Bureau of Labor Statistics puts out all the numbers you say are being hidden. More numbers than a typical person has time to consume in it's entirety. They're just not termed "unemployment", it's labor participation rate or sometimes U-7: https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 or other flavors: https://www.bls.gov/news.release/empsit.t12.htm https://www.bls.gov/news.release/empsit.t12.htm Now I'd agree it is a terrible shame that political and business news media almost completely ignore any introspection in the labor stats of this area.
- NumberSix 10y ago
  This is the opening paragraph of the BLS press release on employment from Feb. 28, 2017. https://www.bls.gov/news.release/srgune.nr0.htm https://www.bls.gov/news.release/srgune.nr0.htm For release 10:00 a.m. (EST) Tuesday, February 28, 2017 USDL-17-0286 Technical information: (202) 691-6392 * lausinfo@bls.gov * www.bls.gov/lau Media contact: (202) 691-5902 * PressOffice@bls.gov REGIONAL AND STATE UNEMPLOYMENT -- 2016 ANNUAL AVERAGES Annual average unemployment rates decreased in 38 states and the District of Columbia, increased in 9 states, and were unchanged in 3 states in 2016, the U.S. Bureau of Labor Statistics reported today. Employment-population ratios increased in 36 states and the District, decreased in 12 states, and were unchanged in 2 states. The U.S. jobless rate declined by 0.4 percentage point from the prior year to 4.9 percent, and the national employment-population ratio rose by 0.4 point to 59.7 percent. Note that BLS uses the U-3 "unemployment rate" of 4.9 percent without qualifications or explanation. Yes, if you read through the fine print in BLS documentation (not the press release), you can determine that U-3 omits allegedly "discouraged workers" as in fact does the broader U-6 measure as well. The mass media is following the government/BLS lead in promoting the U-3 measure as the "jobless rate." Again, there is no qualification in the opening paragraph, no mention of the broader U-6 measure or the general issue of purportedly discouraged workers. The uncritical, almost universal repetition of the U-3 number raises the question of the independence of the major mass media, the so-called Mainstream Media or MSM, and the government, and vice versa.
awqrre 10y ago
The real unemployment rate, U-6 is probably closer to the truth: http://www.gallup.com/poll/189068/bls-unemployment-seasonally-adjusted.aspx.aspx http://www.gallup.com/poll/189068/bls-unemployment-seasonall...

jack9 10y ago

It's shocking, just plain shocking, how short people's memories are, in regards to their own governmental details. The manipulations to deflate the unemployment numbers, I was cognizant of in high school, have never stopped. New techniques come up every administration (seemingly every year). It's like how "the tech industry innovation value" is now added to the UDP arbitrarily. Smoke and mirrors. Google "US employed population" then click "What percentage of the US population is working?" - What percentage of the US population is working? According to the October jobs report, the seasonally adjusted employment-to-population ratio was 59.2% last month, one percentage point higher than it was a year earlier. Over that same period, the “official” unemployment rate fell from a seasonally adjusted 7.2% to 5.8%.Nov 7, 2014

extra88 10y ago
For that 59.2%, who counts as employed and who counts in the population? To have 40.8% not employed, they must be counting people in school, people who are retired, probably stay-at-home parents, people with serious disabilities, and the people wealthy enough not to work. How is that a useful figure? The official figure doesn't include people who are too young or too old and doesn't include people who are not looking for work. Certainly there are some people who society would say should be looking for work and we'd like to count them amongst the unemployed but there isn't a good way differentiate them from the people who have good reasons for not looking for work. So the official number is based who says they are looking for work.
tomjen3 10y ago
That seems like a low number, but babies tend not to be allowed to work in this country, and more people are going to college, retirees are living longer. A better number might be NEET - self employeed under the retirement age vs entire population. Thats still not entirely fair, since it misses those who have deliberately chosen not to work, but that number is probably pretty small.
nodamage 10y ago
59.2% is quite misleading because it includes students and retirees. The next two paragraphs from your own source[1] say: One reason for the difference is that the share of Americans saying they don’t want a job has trended up since the Great Recession: from 31.9% of the working-age population in October 2008 to 34.6% last month (on a non-seasonally adjusted basis). Some of that increase, though, may be due to Baby Boomers reaching retirement age; as they leave the workforce over the next several years, labor economists expect the employment-to-population ratio to trend lower. Young adults staying in or returning to school also may be a factor. So if we look at just the 25-to-54 age group, which strips out most students and retirees, the employment-to-population ratio has been slowly improving since it bottomed out at 74.6% (not seasonally adjusted) in February 2011. Last month, 77.3% of all 25-to-54-year-olds were employed, which is well below the indicator’s pre-recession high in October 2006, when 80.7% of people in this age group were employed. [1] http://www.pewresearch.org/fact-tank/2014/11/07/employment-vs-unemployment-different-stories-from-the-jobs-numbers/ http://www.pewresearch.org/fact-tank/2014/11/07/employment-v...
- jack9 10y ago
  > 59.2% is quite misleading because it includes students and retirees. Misleading does imply context, which is used to confuse the issue and has traditionally been used to alter the statistic to meet agendas. People who aren't looking for work, students, retirees, etc is irrelevant. It's a statistic about who is employed versus not employed as a relative portion. While I don't think there is a canonically sound source anymore, we have had a serious system problem for awhile. When even the curated sources by one agency are more pessimistic than the celebrated federal numbers, it's now a question of how wrong they are, not what they say.
- lacker 10y ago
  Why should we exclude students and retirees from our key employment metrics? Society must pay for students and retirees, and the higher the employment-to-population ratio, the easier that is to do.
  - 10y ago

extra88 10y ago

"Massages" makes it sound like the change the measures on the fly which is not the case. See my other comment about counting those not working vs. those not looking for work.

NumberSix 10y ago
I use "massages" to cover two factors. First, the Bureau of Labor Statistics has redefined the way it measures unemployment and employment several times over the decades. In addition, there are a range of seasonal adjustments and other possible variations in the surveys and number crunching that are more difficult to understand and less well documented. See for example this discussion of discrepancies between the BLS unemployment rate and the Gallup Poll unemployment rate (since 2010): http://unemploymentdata.com/unemployment/is-the-government-fudging-unemployment-numbers/ http://unemploymentdata.com/unemployment/is-the-government-f... It is difficult to know if in practice the household surveys are done the same way each time and also what seasonal and "one-time" adjustments may be occurring either during the first measurement or subsequent corrections. As the discrepancies between the BLS and Gallup numbers indicate, there is evidence of shorter term massaging not captured in the major redefinitions, such as excluding "discouraged workers" who want a job but supposedly have not looked for one recently, in the 1994 revisions to the unemployment measures.

dv_dt 10y ago

This view really bothers me. The generally reported "unemployment" figure in the media does have the problems you mention. But the US Gov't through Bureau of Labor Statistics puts out all the numbers you say are being hidden. More numbers than a typical person has time to consume in it's entirety. They're just not termed "unemployment", it's labor participation rate or sometimes U-7: https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 or other flavors: https://www.bls.gov/news.release/empsit.t12.htm https://www.bls.gov/news.release/empsit.t12.htm Now I'd agree it is a terrible shame that political and business news media almost completely ignore any introspection in the labor stats of this area.

NumberSix 10y ago
This is the opening paragraph of the BLS press release on employment from Feb. 28, 2017. https://www.bls.gov/news.release/srgune.nr0.htm https://www.bls.gov/news.release/srgune.nr0.htm For release 10:00 a.m. (EST) Tuesday, February 28, 2017 USDL-17-0286 Technical information: (202) 691-6392 * lausinfo@bls.gov * www.bls.gov/lau Media contact: (202) 691-5902 * PressOffice@bls.gov REGIONAL AND STATE UNEMPLOYMENT -- 2016 ANNUAL AVERAGES Annual average unemployment rates decreased in 38 states and the District of Columbia, increased in 9 states, and were unchanged in 3 states in 2016, the U.S. Bureau of Labor Statistics reported today. Employment-population ratios increased in 36 states and the District, decreased in 12 states, and were unchanged in 2 states. The U.S. jobless rate declined by 0.4 percentage point from the prior year to 4.9 percent, and the national employment-population ratio rose by 0.4 point to 59.7 percent. Note that BLS uses the U-3 "unemployment rate" of 4.9 percent without qualifications or explanation. Yes, if you read through the fine print in BLS documentation (not the press release), you can determine that U-3 omits allegedly "discouraged workers" as in fact does the broader U-6 measure as well. The mass media is following the government/BLS lead in promoting the U-3 measure as the "jobless rate." Again, there is no qualification in the opening paragraph, no mention of the broader U-6 measure or the general issue of purportedly discouraged workers. The uncritical, almost universal repetition of the U-3 number raises the question of the independence of the major mass media, the so-called Mainstream Media or MSM, and the government, and vice versa.

awqrre 10y ago

The real unemployment rate, U-6 is probably closer to the truth: http://www.gallup.com/poll/189068/bls-unemployment-seasonally-adjusted.aspx.aspx http://www.gallup.com/poll/189068/bls-unemployment-seasonall...