BLS Politicized?

Jack Welch publicly claimed that the Obama campaign had influenced the BLS to report an anomalously low unemployment rate. Personally, I have no idea whether it did or not. I tend to doubt it because government is generally as incompetent at conspiracy as it is at everything else. I do think it may be significant that the BLS has remained mute about the causes of this anomaly, given that it usually attempts to explain exceptional data, which this report certainly contains. But it is important to remember that the reported unemployment rate is propaganda itself, omitting people who withdraw from the labor force.

Before the 2008 recession, about 63% of the working age population had a job, falling from a high of nearly 65% in 2000. That fell to between 58 and 59% in the recession and has not recovered, standing at 58.7% today. Simply adding back in these losses gives a more meaningful unemployment rate, somewhere around 12%. The bottom line is that the marginal growth in employment is roughly keeping up with population growth, but has not moved at all in the direction of recovering the jobs lost in the 2008 recession.

Edit: Polling and measurement expert Gallup weighs in on the subject; “Time to Replace the Unemployment Rate.

The problem is that even though the Household survey tends to be very volatile, this decline seems to lack face-validity, particularly after the prior month’s numbers….

The Household data raise similar questions when averaged over time. Over the past two months, the unadjusted increase in the number of Americans employed has totaled 207,000 while the number of unemployed workers has declined by 1.66 million. The difference is made up by a decline of 1.45 million workers in the size of the workforce.

As a result, the unadjusted unemployment rate has plunged by one percentage point over the past two months to 7.6% from 8.6% — an enormous decline given the weak economy. Over the same period, the seasonally adjusted rate has fallen 0.5 points to 7.8% in September from 8.3% in July.

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