The real Unemployment rate in the United States.

Discussion in 'Economics' started by SouthAmerica, Jan 4, 2008.

  1. .

    January 4, 2008

    SouthAmerica: Here is how the US Labor Department keeps unemployment rates low at around 5 percent using a flexible way of reporting. It is very easy – just create a new category for “discouraged workers” and you dump any adjustments necessary to achieve the desired fictitious unemployment rate in that category.

    Since George W. Bush became president almost 7 years ago – over 4 million people from age group 44 to 57 disappeared from the US work force (most of them with advanced degrees) – you can find them during the week playing with their laptops and cell phones, and looking busy at Starbucks, Borders, Barnes and Noble - all around the country. (This trend reflects a real waste of talent and practical experiences going on in the US today).

    Another large group – in the millions – decided to call themselves consultants (because of various reasons including their age, pride, and so on). Others even though they still reasonable young (on their early 50’s) decided to qualify themselves as retired.

    Another very large group of approximately 4 million mostly unemployed people are hiding on the disability figures of the US government. In the first 3 years of the Bush administration the number of people who started receiving disability benefits went through the roof. As an over-reaction to that figure explosion in the first 3 years of his administration in the last few years the Bush administration has been making almost impossible for people to qualify for disability even to the people who are really disabled.

    The number of people in prison in the United States also continues to grow year after year and in the near future the United States will have over 2.3 million inmates in Federal, State, and local prisons.

    Sorry, if I forgot to mention above some of the other creative ways to fudge the unemployment rate numbers.

    The Bush administration probably has the least credibility of any US administration in modern times. Is it possible that the US Labor department started adding to its numbers the new jobs being created in Iraq? I know that Americans are investing a large amount of taxpayers money in Iraq. I would not be surprised if this administration is counting the new jobs created in Iraq as part of the US job creation.

    They use all kinds of gimmicks to fudge all the data they provide to the public. For example, the unemployment rate kept going down as the government kept adding large amounts of people to the discouraged workers group of people. It is pathetic. The Bush administration adopted the Enron and WorldCom method of statistics and releasing figures and information to the public.

    But if you make some rational adjustments to the unemployment rate as reported by the US Labor Department, you get a different picture. It is estimated that at least 3 million people are hiding in the disability figures. (People who had some form of disability for many years such as a pain in the back or some other form of disability, but these people were willing to keep working if they had a job.)

    Lots of people run out of unemployment benefits and they couldn't find a job that’s why they had an explosion in the number of people on disability in the first 3 years of the Bush administration until they closed that option.

    Another 4 million are not counted because they left the labor force and are considered discouraged workers who abandoned their job searches. If we adjust the unemployment rate for these items, then the US unemployment rate jumps to over 12 percent.

    The unemployment problem in the United States it does not account for over 6 million people who are underemployed or decided to further their education because they could not find a job, then if we made these adjustments a more realistic picture appears of the real unemployment rate in the United States, with the actual unemployment rate increasing to over 15 percent.

    The US government fudges their statistics, and they make footnotes to let everybody know that the figures published are not worth much. But people still use the data anyway, as if the data had any value.

    The US government has lost most of its credibility around the world since the Bush administration took office. It is not a secret that the current administration doesn't make much distinction from good information and garbage; if it is useful information to further their agenda they'll use it.

    A few years ago I had to go to the US Labor Department website to find out who was the invisible Labor Secretary of the Bush administration. I was surprised to find out that the current Labor Secretary was a Chinese-woman called Elaine L. Chao. Now, I am beginning to understand what the Bush administration means when they say that they created 4 million jobs – they mean in China.

    The Easy Fix

    To improve the unemployment rate overnight, any government should adopt the same system of counting the unemployed as the system being used by the United States government today. It is a simple method of counting the unemployed, massaging the figures and using various modern techniques, such as: "Lying, Deception, and Misinformation."


    Jobless Rate Hits 5 Percent, 2-Year High
    Friday January 4, 12:40 pm ET
    By Jeannine Aversa, AP Economics Writer
    The Associated Press
    Jobless Rates Hits 5 Percent, a 2-Year High, Fanning Recession Fears

    WASHINGTON (AP) -- Hiring practically stalled in December, driving the nation's unemployment rate up to a two-year high of 5 percent and fanning fears of a recession.

    Employers last month added the fewest new jobs to their payrolls in more than four years, according to the employment report released Friday by the Labor Department. The report showed that employment conditions are deteriorating, strained by a housing slump and credit crunch that are sapping economic strength.

    "The economy is getting hit by some body blows. The big question is whether the economy can withstand it or will it take a fall," said Ken Mayland, president of ClearView Economics.

    The unemployment rate jumped from 4.7 percent in November to 5 percent in December, the highest since November 2005 after the Gulf Coast hurricanes dealt the country a mighty blow. Total payrolls -- both private employers and government -- grew by just 18,000 last month, the worst showing since August 2003, when the economy suffered job losses as it struggled to recover from the 2001 recession.

    …The government added 31,000 jobs in December, while private employers actually cut payrolls by 13,000, underscoring the weakness….

  2. do you make money striking against the US?

    If you hate us so much, why don't you leave?

    I've been hearing reading about the end of the united states since i was a child.. first was the soviet victory against the US in the 50's.. Then vietnam, the japanese in the 80's, then nixon then carter then clinton and now bush and terrorism.

    why dont you get a real job like everybody else?
  3. .
    January 4, 2008

    SouthAmerica: I mentioned a number of times on this forum that thousands of Brazilians are returning to Brazil – legal and illegal immigrants. And that is also happening to other groups of foreigners who were living in the United States.

    The Exodus is going on…..

    Most Americans are not able to grasp the fact that most of these people who came from other lands looking for some kind of opportunity here in the United States are very hard workers, with initiative, and many have the entrepreneurship spirit and drive necessary to start a business and help the economy grow, these are people who risk everything and they would do anything to move ahead on their lives and to help their families.

    When this type of people are giving up on a country and returning home – they give you real clues to the state of the job market in that country – a much better clue than any other government statistics – these people are giving you a signal and they are acting as the canary in the coal mine.

    If there were government statistics to document the Exodus that is under way of the legal and illegal immigrants group - all these people who are abandoning the sinking ship here in the USA would make the real unemployment in the United States even higher.


    December 5, 2007

    SouthAmerica: The New York Times published an article yesterday about this trend that has been going on for over a year.

    I had mentioned about this exodus of Brazilians from the United States on this Forum many weeks ago.

    Eventually the US mainstream media will realize that the exodus is not only of Brazilians but it is affecting many groups of immigrants - legal and illegal who came to the US various places.

    The Legal and illegal immigrants in this case are like the canary in the coal mine - the legal and illegal immigrants are giving advance notice that the party it is over here in the United States.


    “Brazilians Giving Up Their American Dream”
    Published: December 4, 2007
    The New York Times

    Like hundreds of thousands of middle-class Brazilians who moved to the United States over the last two decades, Jose Osvandir Borges and his wife, Elisabeth, came on tourist visas and stayed as illegal immigrants, putting down roots in ways they never expected.


  4. empee


    I don't think its fair to label Elaine Chao because she is of Chinese descent; its like labeling a Brazilian pro-Chavez just because his ancestors are from Brazil.

    I do agree with some of your article tho.

    You also left out the birth-death adjustments and how they can create jobs based on a model.

    As we see in sub-prime, what could go wrong?
  5. I dont get this clowns agenda. Come to a site that caters to the most capitalistic types in a capitalist society. Bash or critique our country and never post anything that has to do with trading our financial markets. Which in case he didn't notice are the most liquid, fair and traded in the entire world.

    Its a free WWW post what you want. But in the eyes of most here southamerica is a troll, clown, basher and..well out of place.

    What is your agenda anyway SA? Is it to criticize or inform? Either way posting on elitetrader is a pretty useless waste of time as the audience could give a shit about your opinions.

    In other words...why dont you just bolt?
  6. This is true with any government's statistics. Just watch the market and forget about the bullshit numbers the government gives out.
  7. .
    SouthAmerica: Reply to rubibond007

    You said: “do you make money striking against the US?

    If you hate us so much, why don't you leave?”

    I am giving you valuable information here that you probably couldn’t figure out by yourself in a million years.

    You are probably a trader and I am showing you where the cracks are located on the dam wall and you prefer to be surprised when the wall of the dam breaks flooding everything on its path.

    You must be a real fool.

    Besides, why do you think that this kind of information means that I am striking against the United States?

    If anything I am trying to show that the labor market situation in the US is deteriorating faster than most people realized and it is in worst shape than the US government reports and statistics are showing.

    I bet someone such as you must thinking that the people who put the spotlight on the current sub prime mess also are striking against the US interest and they all should leave the country.

    That reflects your closed-mindset – instead of paying attention and grasp the message you are reacting to something else..

  8. fleance



    Most traders don't really care about the government statistics. We all know they're bull@#$%. The official CPI has been almost a flat line while there has been raging inflation. I agree the employment #s are bogus; Even by those bogus numbers, job growth has been the worst ever for a recovery (from 2001-2002). The actual job situation is probably even worse; The US domestic economy is probably already in recession, and there is probably net job losses rather than job gains.

    But if you try to trade based on government statistics, it's a fool's game. Even if you had the more accurate statistics, would that help you trade much better?
  9. .

    SouthAmerica: Reply to empee

    You wrote: “I don't think its fair to label Elaine Chao because she is of Chinese descent; its like labeling a Brazilian pro-Chavez just because his ancestors are from Brazil.”

    Your example doesn’t make sense since Hugo Chavez is president of Venezuela, and he speaks Spanish and has a native Indian ancestry.

    The president of Brazil his name is Lula. By the way the language of Brazil is Portuguese. At least you got the right neighborhood since Venezuela and Brazil are both located in South America.

  10. Yes - the US has fought off all external threats in history
    #10     Jan 4, 2008