The Unemployment Rate Dramatically Overstates the Strength of the Economy

Mish

On Friday, the BLS will update the unemployment rate. It will be a distortion of reality.

People Gave Up Looking

Pre-Covid, the labor force force was 164,516,000. 

Despite the recovery, the labor force is only up to 160,867,000. 

That's a decline of 3,649,000 people. Realistically, unemployment is understated by at least that amount.

Civilian Labor Force 1998-Present

Civilian Labor Force 2020-10 Long Term

Because of the way the BLS carefully constructs its questions, those people are not considered unemployed even if they still want a job.

The unemployment rate was distorted enough pre-Covid. Now it's even worse.

Mish

Comments (20)
No. 1-12
BobSmith
BobSmith

Reality will hit hard in 2021-22. I see massive GOP gains in Congress and impeachment of Biden.

Amanacer
Amanacer

The SPEND and PRINT policies of the last three years have been quite a facade. Hopefully we have had enough of that.

Lance Manly
Lance Manly

Once we get to the 2Q 2021, things should improve markedly. There will probably been over 100M exposed to covid and the vaccinations combined with seasonality will put the pandemic in the rear view mirror. Not that I agree with the mismanagement of the pandemic, many thousands of lives could have been saved by implementing reasonable policies, but that is not the way it is.

There has been a large increase in savings for those on the upside of the "K" shaped recovery and hopefully the next package will help those on the down side. So the money should be there to kick things off, could start inflation though.

Realist
Realist

The future is so hard to predict. But in the coming decades, the US economy will trend toward zero growth. Yes, there will be a short term bump up from current depressed levels, and modest up/downs along the way. However, zero growth in the long term.

Underemployment will also continue to be a trend. And greater disparity dividing those with education and skills from those without.

Politicians will appeal to the disadvantaged, as if they can do something to help them. If they really want to help them they will provide as much training as possible. Hopefully in conjunction with business.

Webej
Webej

A much better measure is OECD stats on how many of the 25-55 are employed full-time. Unemployment stats do not provide the complement you would expect to employment numbers.

Deficit/Revenue & Debt/Revenue also provide a much better picture of where things stand than the always touted /GDP numbers. Government income comes from tax revenues, not from GDP.

Lance Manly
Lance Manly

The BLS actually addressed the labor force issue in the supplemental questions today. In reality there are 4M more unemployed but the top line numbers don't capture it.

"About 3.9 million persons not in the labor force in November were prevented from
looking for work due to the pandemic. This measure is up from 3.6 million in October.
(To be counted as unemployed, by definition, individuals must either be actively
looking for work or on temporary layoff.) "

njbr
njbr

A little longer in this vale of tears---Pfizer is having production issues and now expects to produce half of vaccine by end of year as claimed before--50mm vs 100mm

njbr
njbr

Stimulus?

Rep. Eric Swalwell
@RepSwalwell

This is batty. Americans are in dire need of food and paychecks. More people died yesterday from #COVID19 than any day since. We have work to do. Yet, @HouseGOP just motioned to adjourn Congress. What the hell are they doing?

Isn’t this a procedural stunt you ask? Sure. What makes it outrageous is a single vote now takes well over an hour to occur with #COVID19 restrictions in place. Then Chamber must be sanitized. These are final days of Congress. It’s like pulling the fire alarm during a final exam.

njbr
njbr

245K jobs added as opposed to the 460K expected. Temporary layoffs fall but permanent dismissals rise. Participation rate falls to 61.5 from 61.7

smhayden1
smhayden1

Unemployment hopelessness suicide,,,, while trillions go to the well connected...yes many gave up. And many are just depressed incapable of working for the illusion that their life will get better. Encourage others to practice charity . It helps their spirits even when their wallets are empty.

anxientok.mueir
anxientok.mueir

With this rate of unemployment people should start using other forms of currency apart from the US dollar, virtual currency like cryptocurrency are in the rising and sites like http://www.mintme.com are helping people managing your account and create token in a easy way

polisella
polisella

Everyone has heard about such a popular phenomenon as depression. My child also had this problem. There was a misguided tendency on the internet and in life in general, that depression in teenagers is normal. Unfortunately, it is this neglect of your children that leads to teen suicides, bad habits, bad actions, etc. If you love your child, you should take care of their mental health. I did the same with my daughter at https://drmental.org/icounseling-com-review Take care of your children and be happy!


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