Unemployment spikes to 22%

JOB CRISIS
Unemployment spikes to 22%
How the Obama administration lies with work statistics

The real unemployment rate may be 22 percent for March 2011, not the 8.8 percent reported, according to economist John Williams, author of the "Shadow Government Statistics" website, who has argued for years that the federal government manipulates the reporting of economic data for political purposes.

In an April 1 Bureau of Labor Statistics news release, the unemployment rate was reported to have fallen 0.1 percent to 8.8 percent in March 2011, although that is the "seasonally adjusted number."

According to BLS Table A15, the "not seasonally adjusted" unemployment number for March 2011 was 9.2 percent.

Separately, Gallup disagreed with the BLS, reporting that unemployment was 10 percent in March, down from 10.2 percent in mid-March, and 10.3 percent at the end of February, as seen in its chart.

Williams recreates a Shadow Government Statistics alternative unemployment rate reflecting methodology that includes "long-term discouraged workers" that the Bureau of Labor Statistics in 1994 under the Clinton administration redefined away from those considered "unemployed."

The BLS no longer considers as "unemployed" those workers without jobs who had not looked for work in the past year because they felt no jobs were available.

Williams has demonstrated that it takes an expert to truly decipher BLS unemployment statistics.

For instance, in a Table A-15, titled "Alternative measures of labor underutilization," the BLS reports what is known as "U6 unemployment."

U6 unemployment includes those marginally attached to the labor force and the "under-employed," those who have accepted part-time jobs when they are really looking for full-time employment.
While the BLS was reporting seasonally adjusted unemployment in March 2011 was only 8.8 percent, the BLS was also reporting U6 seasonally adjusted unemployment in March 2011 was 15.7 percent.

The only measure BLS reports to the public, as the official monthly unemployment rate, is the seasonally adjusted U3 number.

Williams calculates his "Official SGS Alternative Unemployment Rate" by adding back into to the BLS U6 numbers those long-term discouraged workers who have not looked for work in the past year.

Williams insists his Official SGS Alternative Unemployment measure is the most accurate estimate of true unemployment in that a reliable measure of long-term discouraged workers in that BLS calculations exclude from the discouraged long-term unemployed those who have not looked for work in the past year.

Red Alert has posted a more complete unemployment table that includes both seasonally adjusted and not seasonally adjusted unemployment percentages for U3 unemployment, as well as the same for U6 unemployment, followed by the John Williams Official SGS Alternative Unemployment rate.

Increasingly, critics like Williams feel the seasonally adjusted U3 numbers reported by the BLS as the official monthly unemployment rate do not give a reliable picture of the true magnitude of unemployment in the United States.

The monthly unemployment rate report turned out by the BLS defines unemployment as those currently without a job who have actively looked for work in the prior four weeks and are currently available for work.

This definition conveniently excludes from the definition of unemployed those who have grown so discouraged that they are only marginally looking for work, as well as those who are considered underemployed because they have been forced to accept part-time or lower-paying full-time employment because no other jobs are available.

To get an estimate of these other categories of unemployed, we have to turn not to the BLS monthly unemployment rate press releases, but to a less well-known table produced by the BLS, Table A-15, "Alternative measures of labor utilization."

Even a quick inspection shows that unemployment in this table is presented for March 2011, not at 8.8 percent, but as 9.2 percent, comparing the seasonally adjusted U3, the unemployment percentage the BLS reports to the public, with the not seasonally adjusted U3, the unemployment percentage the BLS reports only in detailed tables such as this one.

Looking at the not seasonally adjusted U6 data, the not seasonally unemployment rate jumps to 16.8 percent for March 2011, not the 8.8 percent seasonally adjusted unemployment rate reported in the monthly BLS unemployment rate press release.

It is no wonder that economist Jim Fitzgibbon, head of the Highlander Fund, calls the BLS monthly unemployment rate report "worthless," noting "the entire report is seasonally adjusted to be positive, while the non-adjusted data is just awful."





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