Saturday, December 07, 2013
Unemployment suddenly drops to 7% - sorry I’m not buying it.
The American economy added 203,000 jobs in November, higher than the 180,000 Wall Street anticipated. The unemployment rate fell 0.3 percentage point to 7%, the lowest level since November 2008, while economists expected the rate to fall less to 7.2%. The labor force participation rate, which gauges the proportion of the population employed or seeking employment, rose to 63% from 62.8% in October.
How does this work? According to the Bureau of Labor Statistics the total labor force grew last month. They say that new jobs totaled 208,000 or an increase of 0.13% of the labor force. Yet they report a drop of 0.3% in the unemployment rate.
From 7.3% to 7.0%.
That’s done by claiming that that 365,000 fewer people were unemployed last month that the month before. Looking at the BLS tables it’s easy to see that they simply changed the number for the civilian labor force to back into the unemployment rate.
This is not the first time the Obama Administration has fudged the unemployment numbers for political reasons.