The Real Story About Unemployment

by admin on February 26, 2011

According to recent employment data, the Labor Department says the national unemployment rate dropped in January from 9.4% down to 9.0% — the biggest one-month drop in years.

This would seem to be good news for the millions looking for work, except for one problem … the non-farm payroll sector only added 36,0000 new jobs last month — 109,000 fewer jobs than were expected for that same period.

Hmmmm — something doesn’t add up here. Maybe we should do a little math to see what’s REALLY going on with this latest round of employment data.

With over 16,000,000 people currently looking for work, a reduction of 0.4% in the unemployment rate would require 64,000 new jobs — almost double the reported 36,000 figure.

So what happened to the other 28,000 people who were no longer “unemployed” in January?

They simply gave up and stopped looking for work.

The government doesn’t count people who are no longer looking for a job as “unemployed” — which, of course makes the numbers look better anyway.

So, before we start celebrating and declare victory over this jobless recovery, let’s sober up and realize that there were almost as many people who just simply gave up looking for work, as there were who actually found a new job.

And what happened to the other 109,000 new jobs that everyone was anticipating?

Sorry, but it ain’t over folks.

~ Dave

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