Marketwatch: US Jobless Rate understated

[Tandalayo_Scheisskopf]

U.S. jobless rate understated, study says
Labor force participation rates have not rebounded
By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) - The current low U.S. unemployment rate probably understates the true level of joblessness by 1 to 3 percentage points, the senior economist at the Boston Federal Reserve says.

Millions of potential workers who dropped out of the labor force during the recession four years ago have not returned as expected and are thus not counted in the official unemployment statistics, said Katharine Bradbury in a paper published by the Boston Fed. Read the study.

The jobless rate fell to 5% in June the lowest level since the terror attacks of September 2001.

Labor force participation rates "have not recovered as much as usual and the discrepancies are large," she wrote.

"Current low rates of labor market participation thus potentially represent considerable slack in the U.S. labor market," she wrote.

http://tinyurl.com/bjobr

[SpiralHawk]

1. Just undoing the BushCo propaganda lies.

eom

[nickinSTL]

2. no f*ing $#!^

1-3% is STILL understating it, IMO

[Roland99]

3. That's what I've been saying for MONTHS...But, she's wrong on one point

The unemployment rate is not derived as she says.

http://www.bls.gov/cps/cps_htgm.htm

Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey.

There are about 60,000 households in the sample for this survey. The sample is selected so as to be representative of the entire population of the United States. In order to select the sample, first, the 3,141 counties and county-equivalent cities in the country are grouped into 1,973 geographic areas. The Bureau of the Census then designs and selects a sample consisting of 754 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State.

Each of the 754 areas in the sample is subdivided into enumeration districts of about 300 households. The enumeration districts, in turn, are divided into smaller clusters of about four dwelling units each, through the use of address lists, detailed maps, and other sources. Then, the clusters to be surveyed are chosen statistically, and the households in these clusters are interviewed.

Every month, one-fourth of the households in the sample are changed, so that no household is interviewed more than 4 consecutive months. This practice avoids placing too heavy a burden on the households selected for the sample. After a household is interviewed for 4 consecutive months, it leaves the sample for 8 months and then is again interviewed for the same 4 calendar months a year later, before leaving the sample for good. This procedure results in approximately 75 percent of the sample remaining the same from month to month and 50 percent from year to year.

Each month, 1,500 highly trained and experienced Census Bureau employees interview persons in the 60,000 sample households for information on the labor force activities (jobholding and jobseeking) or non-labor force status of the members of these households during the week that includes the 12th of the month (the reference week). This information, relating to all household members 16 years of age and over, is entered by the interviewers into laptop computers; at the end of each day's interviewing, the data collected are transmitted to the Census Bureau's central computer in Washington, D.C. In addition, a portion of the sample is interviewed by phone through two central data collection facilities. (Prior to 1994, the interviews were conducted using a paper questionnaire which had to be mailed in by the interviewers each month.)

Each person is classified according to the activities he/she engaged in during the reference week. Then, the total numbers are "weighted," or adjusted to independent population estimates (based on updated decennial census results). The weighting takes into account the age, sex, race, Hispanic origin, and State of residence of the population, so that these characteristics are reflected in the proper proportions in the final estimates.

A sample is not a total count and the survey may not produce the same results that would be obtained from interviewing the entire population. But the chances are 90 out of 100 that the monthly estimate of unemployment from the sample is within about 230,000 of the figure obtainable from a total census. Since monthly unemployment totals have ranged between about 5 and 8 million in recent years, the possible error resulting from sampling is not large enough to distort the total unemployment picture.

Because these interviews are the basic source of data for total unemployment, information must be factual and correct. Respondents are never asked specifically if they are unemployed, nor are they given an opportunity to decide their own labor force status. Unless they already know how the Government defines unemployment, many of them may not be sure of their actual classification when the interview is completed.

[ClintonTyree]

4. DUH............

and it took all this time for these MBA's to figure it out? :wtf:

"The current low U.S. unemployment rate probably understates the true level of joblessness by 1 to 3 percentage points". Yeah, right. Try 3-5 points, at least. There are more people who have stopped looking for work than there are reported unemployed.

Well, at least someone has said it. Someone other than us, anyway. We here at DU knew the rosy picture they were painting all that time was complete bullshit, but try to get others to listen.

[Tandalayo_Scheisskopf]

5. I have a crazy dream.

I have a dream that someday, somehow, all these CEOs and corporate board members that have eroded our economy, destroyed our jobs and lives and enriched themselves on the back of beleageured souls will somehow be brought up on charges of economic sedition.

Yup, I know. Crazy.

[NNN0LHI]

6. Army is hiring n/t

[TahitiNut]

7. The Employment/Population Ratio tells part of the story...

Here's the (temporarily) cached graph ...


Series Id: LNS12300000
Seasonal Adjusted
Series title: (Seas) Employment-Population Ratio
Labor force status: Employment-population ratio
Type of data: Percent
Age: 16 years and over




Here's the link (for when the graph isn't cached) ...
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS12300000

[cap]

8. they did the same thing during the Reagan administration

eom

[Rose Siding]

9. Must be Friday afternoon

[katsy]

10. Who would have thought...

the results are skewed in favor of corporate facsist politicians?

:sarcasm:

In fact, corporations/shareholders/military-industrial complex and politicians do benefit from this rosy outlook.

While industrialists and their puppet government (includes the majority of gop and dems) sell out this country to the highest foreign bidders in order to line their own pockets... they keep chanting the mantra "the economy is strong" and "job ceation is peachy" and "get rich quick by supporting free trade".

They laid their bets that average Americans would buy their shyte and they were right. THEY WERE RIGHT and we lost.

So these corporations shed American workers and ramped up in other countries in order to take advantage of slavery. Salaries for American workers haven't risen for umpteen years either thanks to reaganomics.

But surprise surprise... the average Chinese and Indian (fill in whatever applicable country) can't afford their products. So what do they have to do? Sell their crap to the American people "CHEAP" until such time as foreign markets become viable markets for them to rape and pillage.

Meanwhile they've completed the rape & pillaging of America and American workers but so what... they have new fertile grounds to victimize.

Considerable slack in the US labor market? No phucking shyte. By the time the American people wake up... the corporate facsists will be living comfortably in more civilized countries, leaving America long before the panic about joblessness hits America's streets.

There is no bigger threat to this country than multinational corporations and our government. The rw fundies are just their ignorant foot soldiers keeping the American people divided.



:rant:

[The_Casual_Observer]

11. Where have I heard this before? ........DU

and DU only.

[cornermouse]

12. Duh...

Only the diehard believers truly think the job market is improving.

[Canuckistanian]

13. Double Duh

My first reaction too.

[davhill]

14. Thats me

I was laid off right after 9/11 and have not returned to work except for occasional consulting jobs. When I cashed in my 401k and took early social security when I turned 62, I stopped looking for work.