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Mint Explains Why The Real Unemployment Rate Is 17.2 Percent
- martythemaniak 17y agoToday was NFP day and the newest statistics should have set off bells for anyone reading them. A lot of people are already aware of the difference between the U3 and U6 unemployment rates, but consider this: -11000 jobs were lost in November -there have been net job losses every single month since Jan 08 - the unemployment rate officially fell from 10.2 to 10.0 today. This is kinda like saying a function's value has started growing while its first derivative is still negative. Reeks of bullshit through and through.
- cynicalkane 17y agoUnemployment counts the number of unemployed active job-seekers, not the total number of people without jobs. It says so right in TFA.
- electromagnetic 17y agoThe loss of jobs could easily have led to parents switching from 'employed' to 'home keeper'. I know people who have been fired, and because the cost differences between child care and income are negligible, they're better off being unemployed due to lower taxes.
- josefresco 17y ago"I know people" unfortunately does not support your argument well.
- mnemonicsloth 17y ago"The loss of jobs could easily have led to parents switching..." The point of speculation is that it doesn't require support.
- UncleOxidant 17y agoGood analysis of why the UE rate went down today even though jobs were lost: http://www.calculatedriskblog.com/2009/12/if-economy-lost-jobs-why-did.html http://www.calculatedriskblog.com/2009/12/if-economy-lost-jo... Quick summary: Rate was probably overestimated in October and underestimated in November. But read it, it's a very informative article with scatter plots, etc.
- teeja 17y agoIt's rather like the fact that the inflation rate has been skillfully manipulated since the 1980s... if you see it mentioned at all any more, which it used to be. But just because you're paying for the statistics doesn't mean you need them, unless you live on Wall St.
- jordanb 17y agoU6 isn't the "real unemployment rate," it's just the loosest definition of "unemployment" that the BLS calculates. It's much higher than U3 because the definition is so much more broad. It is also, of course, much higher than U3 in good times as well as bad. The cartoon tries to assert that U3 is not valid because it excludes people not actively looking for work, etc. While it's true that there are deficiencies in U3 (and that is the reason why the BLS continues to publish U4/5/6), the primary purpose of U3 is to provide an economic indicator, so we can tell if things are getting better or worse. U3 is a less subjective definition than U4/5/6 and is more reliant upon primary data, rather than data from sampling-based surveys. It's the broadest definition of unemployment for which the available data is very robust, and thus less likely to drift due to sampling problems. Robustness is a very important quality for an indicator, whose primary purpose is to be compared to itself at some other t. U4/5/6 are important to keep in mind, but calling any of them the "real" unemployment rate is disingenuous. Any one of them would be inferior to U3 as "the unemployment rate indicator."
- joe_the_user 17y agoYour argument fails take into account the fact that the unemployment rate is a highly politicized figure in which the adjustments are by no means all for statistical accuracy. The discussion of employment and unemployment at the Shadow Government Statistic website gives a good overview of this topic. See http://www.shadowstats.com/ http://www.shadowstats.com/ (I've given the home page since they discourage deep linking - the article is at article/employment). Of course, the original Mint discussion was hardly better than the parent's argument.
- jordanb 17y agoMy "argument" is simply to state that U3 is a measure defined so that it can rely on population (not sampled) data. This is done precisely to reduce the amount of processes error and bias. The definition of U3 leaves little room for adjustment, and that is intentional. If you were worried about "manipulation," then U4/5/6 are much more open to manipulation than U3 is.
- ntoshev 17y ago
- jws 17y agoMint explains…, then why is the link to techcrunch? Perhaps http://www.mint.com/blog/trends/unemployment-rate-video/ http://www.mint.com/blog/trends/unemployment-rate-video/ would be nice. It isn't a pure link jacking, the tech crunchers did add a pair of facts from today's announcements.
- josefresco 17y agoIt's the relative change that's important. Doesn't really matter what 'scale' you use, the change in % is what is most telling about where we are headed.
- deleted 17y ago[deleted]
- gcheong 17y agoI'm wondering if I get counted as part of the officially unemployed as the little checkbox that asks you to give details of your job search contacts for the past weeks has never been checked on any of the UI claim forms I received. This is in CA.
- gojomo 17y agoThe U3 official rate is based on a household survey, not any unemployment insurance claims. So whether you're collecting unemployment insurance, whatever you report on the forms, and even whether your unemployment insurance runs out has no bearing on the rate. Instead, it's a statistical projection based on the surveyed households self-reported employment/looking-for-employment status. (So you weren't literally counted unless the survey contacted you, but you were statistically counted as long as their sample was representative.)
- patrickgzill 17y agoSurprised no one pointed out http://www.shadowstats.com/alternate_data http://www.shadowstats.com/alternate_data which indicates 22 per cent, if the stats today were calculated using the pre-Clinton administration method.
- andreyf 17y agoSomewhat aside: what software do people use to create cartoons like this?