Spinning Unemployment Figures in a Collapsing U.S. Empire

Politics / Economic Statistics Jan 10, 2011 - 08:31 AM
By: Paul_Craig_Roberts

The Bureau of Labor Statistics (BLS) reported Friday that the economy gained only 103,000 new jobs in December--not enough to keep up with population growth--but the rate of unemployment (U.3) fell from 9.8% to 9.4%. If you are confused by the report, you are among the many.

In truth, what fell was not the number of unemployed people but the number of unemployed people who are actively looking for work. Those who have become discouraged and have ceased looking for work are not considered to be in the work force and are not counted as unemployed in the U.3 measure. The unemployment rate fell because discouraged workers increased, not because employment rose.

The BLS counts short-term discouraged workers (less than one year) in its U.6 measure of unemployment. That unemployment rate is 16.7%. When statistician John Williams (shadowstats.com) adds the long-term discouraged, the US unemployment rate as of December 2010 was 22.4%.

The question to ask yourself is: why does the media focus on the unemployment measure that does not count any discouraged workers? The answer is that the U.3 measurement only counts 42% of the unemployed and makes the situation appear to be a lot better than it is.

Where are the 103,000 new jobs? As I have reported for years, the jobs are in non-tradable domestic services: waitresses and bar tenders, health care and social assistance (primarily ambulatory health care services), and retail and wholesale trade.

Today the United States has only 11,670,000 manufacturing jobs, less than 9% of total jobs. Yet, despite America’s heavy dependence on foreign manufactures and foreign creditors, the idiots in Washington think that they are a superpower standing astride the world like a colossus.

John Williams reports that “the level of payroll employment still stands below where it was a decade ago, despite the U.S.population growing by more than 10% in the same period. The structural impairments to U.S. economic activity continue to constrain normal commercial activity, preventing any meaningful recovery in business activity.â€