8.2% Jobless Report Bogus

Today’s monthly unemployment report for June came in at 8.2%, unchanged from last month, May.

The monthly unemployment report is a fraud. Unemployment numbers are based on several criteria.  The numbers are plugged into a formula. Both the criteria and the formula are flawed, inaccurate, i.e. bogus. The criteria and formula have changed over the course of several Presidents’ administrations. Here is how the fraud works in part today.

The unemployment criteria:

1)  Number of people drawing unemployment benefits from the government.

2)  Birth-Death Model.  Compares the number of start-up businesses(not people) to the number of businesses closing their doors.

3)  Seasonal Adjustments. To balance out factors of weather, winter time, and holidays.

4)  What kind of employment counts? Does part-time employment count?

5)  The reported number itself, such as 8.2% reported today, is a preliminary number. The number will be refined later, supposedly to a more accurate number next month and again the month after that.  

All five criteria are subjective. They’re estimates. The Bureau of Labor and Statistics(BLS) compiles and reports the number to the public. Here are some of the ways the unemployment criteria are twisted.

NUMBER OF PEOPLE DRAWING UNEMPLOYMENT.  The number of people drawing unemployment is squishy at best. Benefits are awarded for a period of time, then you are ineligible—you are not counted. Plus, there are people unemployed who chose not to apply for benefits.  These folks are not included in the unemployment figures. 

BIRTH-DEATH MODEL.  This is a squishy number. There’s no way of actually calculating an accurate number for this criteria. In other words the BLS makes it up. Furthermore, BLS will “estimate” a large number of start-up businesses each month, but omit entirely businesses that go out of business, thereby increasing the number of supposed employers to a “rosy” employment report.

SEASONAL ADJUSTMENTS.  Another guess by the BLS. If the weather was unusually warm last month, the BLS adds to their final number to account for “more people able to work” on account of good weather.

WHAT KIND OF WORK COUNTS.  The BLS is counting part-time work as full-time work. Yeah, fraud.

PRELIMINARY NUMBER.  The monthly report number is nearly always reported as “better than expected” news. Then months later, the revised “more accurate” unemployment number is quietly reported at the bottom of the back page in the business section of the newspaper. The revised numbers are generally worse than initially reported, but you never hear about that on the news.

Here’s a good question.  And how can the monthly unemployment rate go down if more people are losing jobs? As was the case for the months from April to May.

Let’s say you have a country of 100 people. And let’s say 20 people are too young or too old to work. So, we have 80 adults of working age able to work. Let’s say of those 80, only 60 are employed, the other 20 are in school or at-home moms and dads. So we have 60 employed adults. If ALL 60 people have jobs, the unemployment rate is 0%.  Hard times hit, and 15 people are out of work and apply for unemployment benefits. That’s 25% unemployment(15 of 60 people). So, we have 15 people drawing benefits. However, for 9 of those 15 people their benefits expire. Those 9 people have no job and now no unemployment benefits. How does the government count the 9? They don’t.  As far as the government is concerned, only 6 people are drawing unemployment benefits. Six out of 60 able adults. Those 6 people are plugged into the BLS formula and voila, unemployment next month is reported DOWN from 25% to 10%, when in fact we still have 15 able adults out of work. Yipeeeeeeeeeee! The lie is reported, stocks go up, and away we go.

Keep in mind the report is generated by the Bureau of Labor and Statistics(BLS). The BLS is a branch of Department of Labor.  The Dept. of Labor works for the Executive branch of our government—the President of the United States. The Dept. of Labor is headed by its Secretary, Secretary of Labor. The Secretary sits as one of the President’s cabinet members. Now imagine if you will, all of the President’s Cabinet members sitting ‘round a big boardroom table answering to their friend and boss the President of the United States. Cabinet member positions are appointed by the President, usually a reward or political favor for having campaigned for the President’s election. Got the picture? You think maybe, just maybe, the Secretary of Labor is motivated to find creative ways to “enhance” the unemployment picture to please his or her boss? Yeah, me too. You think maybe the Deputy Secretary of Labor is looking for ways to “improve” unemployment numbers for his boss the Secretary of Labor in order to keep his or her own job? Me too?

Politicians and the government are fudging unemployment numbers to assure reelection, avoid panic in the stock market, and prevent civil unrest. Who wants to march in protest alone because you think you’re the only one in the country who can’t find a job?



(For more information about flaws in U.S. government economic data, and uncovering the REAL unemployment figures, see John Williams’ shadowstats.com.)


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