The Bureau of Labor Statistics is out with the January 2012 Employment Situation Summary. The report is chipper with good news. Haven't you heard? The unemployment rate is down to 8.3%!
The unemployment rate is calculated by dividing the number of people who are willing to work in current market conditions but can't find employment by the number of people available to work.
It is not, as some people instinctively think, the number of non-working people divided by the working age population.
This has implications for what we'd expect to see if things really were getting better and people were feeling it.
According to BLS data (series CEU0000000001), 137 million people were employed in October 2008. This number, in October 2011, was 133 million.
Similarly, in January 2008, before the dynamic Bernanke-Paulson chicken-dance-duo kicked into high gear, 136 million people had jobs. In January 2012, this number was 130 million.
In January 2009, right before the Shoveler in Chief took office, 132 million people were employed. A year after he rolled into town with his expert Keynesian economists and grand plans for all of us, in January 2010, employment was down to 127 million people.
Make no mistake about it, 130 million is more than 127.
Now, according to the Census Bureau, the population of the U.S. in January 2009 was 306 million. That is, about 43% of the country was employed. In other words, for every 10 employed people, there were 13 people not gainfully employed.
Fast forward to today, where the population of the country was apparently somewhere around 313 million, and we have about 42% of the country employed.
That is, for every 10 employed people, there are now about 14 people not working.
After all, this is the number that matters. For the working people produce stuff to meet the needs and wants of the entire population.
In addition, the per capita real GDP fell by about 1.2% between the end of 2008 and the end of 2011.
So, a smaller proportion of the population is working and they are producing less stuff.
We'll see where we go from here.
Down the crapper is where we go from here unless there are major policy changes in favor of free markets. Under this administration and Senate that is an impossibility. Under a Romney presidency with a Republican congress, chances are better, albeit not by much. Even so, a RINO would be infinitely better than a full fledged collectivist.
ReplyDeleteAs for the U3, it is bogus. The real rate is about 11% (with the U6 at almost 18%). But hey, the media and the folks at BLS have a job to do: re-elect the SOB that is in the WH.
Please, don't look at unemployment rates. Look at the "Labor force participation rate" and also the "civilian employment-population ratio".
ReplyDeleteUltimately, people only participate in an economy on a voluntary basis, or not at all. People have a choice of living frugally, and enjoying their own time in their own way, or living more lavishly and selling their time to an employer. That's the economic decision we all face. Where the balance sits depends partly on individual preference, and partly on the type of incentives that are out there, and what opportunities are available.