Has the government understated unemployment by 32%?????

[galileoreloaded]

This will make the economic pollyanna's experience violent cranial explosions. Transparency, my ass.

"There is an old saying, "when in doubt follow the money." These days investors have lots of doubt about pretty much everything (if not so much money). And with data from the government increasingly bearing the Quality Control stamp of approval of the Beijing Communist Party, there is much doubt in store courtesy of an administration which will stop at nothing in its competition with China as to who can blow the biggest asset bubble the fastest, data integrity be damned. Undoubtedly, of all government released data, the most important is, and continues to be, anything relating to unemployment. This is precisely where the government's propaganda armada is focused. Yet in matters of (un)employment, the ultimate authority is, luckily, the Treasury, and not the Fed. "Luckily," because when it comes to making money "difficult to follow" Tim Geithner's office still has much to learn. Which is why when we looked at the Daily Treasury Statement data we were very surprised: because it indicates that the government could be underrepresenting employment data by up to 32%!"

http://www.zerohedge.com/article/government-misrepresenting-unemployment-32

[Tansy_Gold]

1. I'm just kinda guessing here, but I don't think it's as bad as

your subject line suggests.

It's not that the unemployment percentage, currently somewhere around 10%+, is more accurately 42% of the available workforce, but rather that the 10% is off by 32% and should more accurately be, say, 13.5% or something in that area.

DISCLAIMER: I have have not yet read the linked article.

I'm just going by the graph you presented, not any supporting data or text.


The unemployment percentage always depends on how the two quantities -- available workforce and the "unemployed" -- are defined. Getting those definitions locked in has always been the problem.



Tansy Gold

[galileoreloaded]

2. You are correct. The current numbers are misrepresented by 32%, or that isthe crux. n/t

[Tansy_Gold]

3. In which case, I would argue that the article is probably

understating the true figure by 100%, by which I mean the actual "unemployment rate" is probably closer to something like 25% if you factor in those who are no longer counted because they're no longer actively looking for work, have exhausted or were never eligible for unemployment compenstaion, and/or those who are only marginally employed (part-time, low-wage jobs for which they are highly over qualified).



Tansy Gold

[galileoreloaded]

5. I believe they are addressing U-3, or people that get unemployment benefits

and not U-6, contract empl., self employed, part time/discouraged workers. By that logic, U-6 might be right on, the u-3/u-6 gap just might be narrower.

[ChangeYouCanBelieve]

8. A "problem" is that corporate media reports U-3 when U-6 should be the official stat

One idea is to pay to get more realistic stats. I say give everyone without a job, but no longer collecting unemployment some amount say $200/m or some figure that most will make some minimum effort to collect. Then just count the outflowing dollars to get the unemployment rate.

[pinqy]

13. You have been greatly misinformed

The official definition of Unemployed as used in the U-3 is

People are classified as unemployed if they meet all of the following
criteria: They had no employment during the reference week; they were
available for work at that time; and they made specific efforts to find
employment sometime during the 4-week period ending with the reference
week. Persons laid off from a job and expecting recall need not be
looking for work to be counted as unemployed. The unemployment data
derived from the household survey in no way depend upon the eligibility
for or receipt of unemployment insurance benefits.

The alternative measures of labor underutilization are

U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
U-5 Total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers
U-6 Total unemployed, plus discouraged workers, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers
Discouraged: Did not work during the reference week or look for work in the previous 4 weeks but did look in the previous 12 months, wants to work, is available to work and did not look because of belief in inability to find work. Includes believes no work available, could not find work, lacks necessary schooling or training, employer thinks too young or old, and other types of
discrimination
Marginally attached: Did not work during the reference week or look for work in the previous 4 weeks but did look in the previous 12 months, wants to work, is available to work and did not look for reasons other than discouragement (in school or training, child care or transportation issues, illness, disability, etc)
Part time for economic reasons: Wants to work full time but worked part time (<35 hrs/week) ror economic reasons. Economic reasons include slack work or unfavorable business conditions, inability to find full-time work, and seasonal declines in demand.due to slack business, cut hours, or couldn't find full time work

Definitions are derived from Employment and Earnings

[galileoreloaded]

15. Misinformed about what??? The definition of u6??

I paraphrased. The point is that this report may just show the gap narrowing, I don't know.

[pinqy]

18. The definitions of U3 and U6

Your subject title was "I believe they are addressing U-3, or people that get unemployment benefits" Which is completely untrue...the U-3, as I showed, does not use receipt or eligibility for unemployment benefits and never has. It includes everyone who has not worked and is looking for work including contract employess, self employed.

And then in your subect you said "and not U-6, contract empl., self employed, part time/discouraged workers. By that logic, U-6 might be right on, the u-3/u-6 gap just might be narrower." The U-6 does include part time for economic reasons and discouraged workers (which is also included in the U-4 and U-5).
So your definition of U-3 was completely wrong and misleading, and your definition of U-6 was not "a paraphrase," but misleading in that some of the things you claimed were not in the U-3 but only the U-6 are in fact in the U-3.

In other words it doesn't appear like you had any real idea of what the definitions are. I listed them, read them.

[galileoreloaded]

20. Your gonna be fun to tangle with my friend, I am always looking for a sparring partner......

hope your up to it.

[pinqy]

21. I'm already up on points

so I'd worry about your ability and knowledge.

[Name removed]

4. Deleted message

Message removed by moderator. Click here to review the message board rules.

[proud2BlibKansan]

7. Interesting user name

Pepperoni?

[ecstatic]

6. ..

While each city is different, and some, like Detroit, are experiencing extremely high unemployment rates, all it takes is a little common sense to know that your headline is false.

[pinqy]

9. Clarifying the article

The article has nothing to do with the Unemployment rate. It's about Insured Unemployed...those collecting unemployment insurance. For the unemployment rate, it doesn't matter if you've ever received benefits or ever been eligible for benefits, it only matters if you're not working and looking for work (which is the definition of Unemployed...people not looking for work, like retirees and stay at home spouses are not usually considered to be unemployed).

The article claims that Treasury figue for money spent on unemployment insurance is 32% higher than the DOL number for people receiving unemployment insurance would indicate. While the charts are odd (how do you measure money payments and number of people on the same axis?) the simple solution is that they're going off of the official Seasonally adjusted numbers. Of course that's not going to match up with actual expenditures because it's not the "real" number but statistically manipulated to show the real trend.

Employment and unemployment have regular spikes based on the time of year. This distorts the actual trend. So seasonal adjustment is applied to smooth out the curve and show the trend. So the reason it doesn't match expenditures is because it's not supposed to.

[Tansy_Gold]

11. Would $$ necessarily match % anyway?

In other words, how would one calculate a percentage rate for unemployment based on the dollars spent? Aren't the amounts different for each individual based on prior earnings and benefits per state? Not everyone who collects UC collects the same amount.



Tansy Gold, an accountant but not a statistician

[pinqy]

14. what it looks like they did

was index the two numbers...setting both to equal 100 and then calculating the changes. So a 700 for either means 7 times the original number.

[roamer65]

10. shadowstats.com is a great website

http://www.shadowstats.com

Most of the present BLS numbers are cooked bulls**t.

[pinqy]

12. Interesting

BLS freely presents all their info, with explanations of methodology etc. Williams at Shadowstats doesn't explain his methodology, has made clear mis-statements about BLS (such as claiming BLS substitutes hamburger for beef) and attempts to verify his claims all fail. So please explain why he's more reliable.

[galileoreloaded]

16. Mr. Summers?? Is that you???

:rofl:

[merh]

17. Welcome to DU - it is good to have someone on board

who can rationally explain this stuff.

Thank you

:hi:

[Taitertots]

19. We need a new statistic

Take the total number of people over 18 and under 65.

Employed: More than 30 hours average worked in last 4 weeks.

Underemployed: 20-30 hours average

Unemployed: Everyone else