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Once Again, our Gov't Creates a Mirage with Unemployment Report

Discussion in 'Political Discussion' started by PatriotsReign, Dec 2, 2011.

  1. PatriotsReign

    PatriotsReign Rookie

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    This time it's a total joke. The gov't "Removed" 500,000 from the labor force to make the unemployment rate go down. They report it as "480,000 left the labor force".

    If you're actually interested in the details, the attached link explains why we don't have a clue how many people are unemployed.

    "If you look at the average labor force growth from 1948 to 2007 of 1,579,000 the labor force should have expanded by 6,316,000 2008-2011. Instead the labor force expanded by a mere 38,000!

    Those who think the economy is improving based on the falling unemployment rate are looking at a statistical mirage based on an extremely atypical and prolonged drop in the labor force."


    Mish's Global Economic Trend Analysis: Charts of the Day: Labor Force and Unemployment Rate Adjusted for Population Growth Since 1948 Show Falling Unemployment Rate is "Statistical Mirage"
  2. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Big whipsaw on the EUR/USD trade when NFP announce came out, one dir when 8.6% rate announced then >180 pips down when info you cite was noted.

    These numbers are an illusion, especially during election periods, who is running the Labor dept?????
  3. JackBauer

    JackBauer On the Roster

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    Was the reportage of said numbers done any differently than usual?
  4. Real World

    Real World Moderator Staff Member

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    I'm kinda hungry. Might be time for an Ipad on wheat. :D
    Last edited: Dec 2, 2011
  5. PatriotsReign

    PatriotsReign Rookie

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    If you read the article from the link, it discusses in detail what has historically been done vs. the changes they've made over the past 3 years.

    A boatload of inconstencies...so I guess "yes" is the answser to your question.

    Here's one example....

    "In the entire history of the labor force data, only in 1951, 1961, 1964, and 2009 did the labor force "shrink". It also "shrank" in 2011 off 2010. Also note that from 1964 to 2007, only in 1991 at 631,000, 1995 at 723,000 and 2002 at 801,000 did the labor force fail to add more than 1,000,000 people."
  6. PatriotsReign

    PatriotsReign Rookie

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    working too much...I don't get it. :confused:
  7. Real World

    Real World Moderator Staff Member

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    It stems from this exchange. The fed has been manipulating how it calculates inflation for a couple of decades now. I believe it's changed the formula as many as a dozen times or more. Anyhow, I thought the response of "I can't eat an ipad", was priceless, if not as to the point as one could be.

    Sticker Shock
    May 1, 2011 1:00 AM EDT


    The Fed may deny it, but Americans know that prices are rising. Inflation is back.


    Federal Reserve Chairman Ben Bernanke at press conference in Washington, D.C. on April 27, 2011., Joshua Roberts / Bloomberg-Getty Images


    “I can’t eat an iPad.” This could go down in history as the line that launched the great inflation of the 2010s.


    Back in March, the president of the New York Federal Reserve, William Dudley, was trying to explain to the citizens of Queens, N.Y., why they had no cause to worry about inflation. Dudley, a former chief economist at Goldman Sachs, put it this way: “Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful. You have to look at the prices of all things.” Quick as a flash came a voice from the audience: “I can’t eat an iPad.”


    Dudley’s boss, Ben Bernanke, was more tactful in his first-ever press conference on Wednesday of last week. But he didn’t succeed in narrowing the gap between the Fed’s view of inflation and the public’s.


    The Great Inflation of the 2010s - The Daily Beast
  8. PatriotsReign

    PatriotsReign Rookie

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    Gotcha!...No wonder I couldn't figure it out.

    Our gov't manipulates everything these days...
  9. PatriotsReign

    PatriotsReign Rookie

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    In my opinion, our gov't is going to continue to try to convince our citizens that things aren't as bad as they are. Why? So down the road, when unemployment is "only 6%, we'll think, "Cool, the economy is doing well again"

    But the reality will be that the "new" 6% unemployment rate is really about 9-10%. I think our gov't thinks we'll all be stupid enough to SPEND our money if things "look" good. What they don't realize is that "confidence" isn't the key to getting our economy back on track...Jobs are the only key.

    Meanwhile, we'll all wonder why we know so many people who are out of work.
    Last edited: Dec 2, 2011
  10. Real World

    Real World Moderator Staff Member

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    I wanted to puke tonight. I flipped channels and that awful Diane Sawyer was on the nightly news talking about the unemployment rate dropped, and should we be excited about the "recovery". ahahahaha, that's so why I never watch any of the nightly news shows. It's news for morons.
  11. Wolfpack

    Wolfpack Banned

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    Guy is a moron to try that line. I bought a $2,500 laptop yesterday but 10 years from now the same laptop will probably cost about $250 brand new (if it isn't fully obsolete).

    I guess that means we can expect -$90% inflation over the next decade. :rolleyes:
    Last edited: Dec 2, 2011
  12. Titus Pullo

    Titus Pullo Banned

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    True mark of a real *******. ... routinely boasts about his own material purchases and stock market triumphs ... Monetary achievements that no one here could care less about, nor truly confirm.

    If you're allowed to bilk enough people into paying you a ton of money, will you agree to go away to some remote island and live out your days in your mansion, looking into the mirror each hour to remind yourself how awesome you are?

    Because no one here cares what an awesome capitalist you are. You get that, right?
    Last edited: Dec 2, 2011
  13. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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  14. Wolfpack

    Wolfpack Banned

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    Careful, Titus. Patters can only ignore your personal attacks for so long before he is shamed into giving you a warning.
    :rofl: Wow. Jealous much? :rofl:

    I didn't realize posting about the fact that I just bought a laptop was considered "boasting." :confused: Does that mean you don't believe me because I can post the receipt if you'd like. Plus, calling me a liar is a personal attack and a violation of forum rules.

    I have a crappy 2 year old i7 desktop right now and I needed some mobility. I sure as heck wasn't going to downgrade and all those little addons add up. But I'd be willing to bet that my new laptop probably isn't even all that much nicer than most of the systems people in here are using.
    I would never "bilk" anyone into anything. I'm very blessed to be able to make an honest living.
    Last edited: Dec 3, 2011
  15. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    Couple things.

    1) What happened in 46? Start of the baby boom.
    2) What's 1946 + 65?
    3) If it's 2009, you're 63, and you lose a job, likely or unlikely you'll get another?
    4) "Mish"'s quoted sage of the blog post evidently is unfamiliar with that fact. Or just really really wants to spin up the PRs of the world to scream at the tops of their lungs "OMG the labor force SHRANK!!!" The guy even says "coincidence?"

    Uh, yeah. Isn't it also possible that if you overlay birth rates from 65 years ago, reverse the correlation (i.e., the direction of the dip in the graph for the size of the labor force points downward, and the uptick for the birthrates would point upward,) you'd end up with at least a start for your detective work that differs somewhat from "The gubmit is manipulating all data like never before OMG!!!!!"?

    The never-ending campaign to find zebras continues. Meanwhile... every now and then those hoofprints really do come from horses.

    PFnV
  16. Nikolai

    Nikolai Football Atheist PatsFans.com Supporter

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    #54 Jersey

    PFinV's point is valid (and touches on a whole other issue that is going to wrack the western world over the next 50-100 years), but it still doesn't do away with the fact that unemployment numbers aren't telling the whole story. If someone with a Master's degree in engineering is working 39 hours a week at JCPenney this holiday, then he is considered "employed". Underemployment is a big problem, but it's getting itself worked out. More and more educated and skilled Americans are leaving to find jobs overseas, hence a few less people in the job market. Problem solved, right?
    Last edited: Dec 3, 2011
  17. PatriotsReign

    PatriotsReign Rookie

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    I'm sure there are some valid reasons to adjust the population/work force numbers, but the AMOUNT of adjustments that have been done since this recession started is historic...thus the "coincidence?" comment.

    The reality is, our unemployment level miraculously went down .4 points when the net jobs added should have kept it constant. Meanwhile, we're heading into the "heat of the battle" for presidential elections.

    So we have all these reports in the media showing the US economy is "heating up" for the better while the rest of the world is tanking. How is that possible? We basically have the same number of people unemployed as we did a year ago if we remove all population/workforce adjustments.

    Then we have the question, "why did the US dept of Labor ever change the way we report unemployment? If we reported it the same way we did during the depression, our unempoyment level would be 15.6% off a peak of 17%. Did we do it because it's easier for Americans to swallow? Yes, of course that's the reason!

    Finally, if we are to make changes to social security where people will have to work longer, shouldn't we be keeping people in the work force longer?
    Last edited: Dec 3, 2011
  18. PatsFanInVa

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    As regards the number dropping out of the labor force, I don't see either "Mish" or the redoubtable Tim talking about adjustments. I see them talking about the number of people who dropped out of the labor force, vs. the number who "should" drop out of the labor force.

    To your point, however, the redoubtable Tim does say that he knows how many should drop out of the labor force, including the demographic adjustment.

    I just think the "coincidence?" comment is based on his ignorance of what he thinks he knows, vs. the reality of what is. Neither Mish nor Tim offer evidence of shady miscounts. What they do note is that people are dropping out of the labor force more than they expected.

    The reality is, you, Mish, and Tim, think it "should" have been one number, yet it was another number. The same forced relationship pertains: It is indeed "heading into an election year."

    Think: It is always either an election year or "heading into an election year." That's part of our broader problem. However that's pretty thin gruel to be claiming is grounds for conspiracy thinking.

    Look at other "anomalous" years in terms of labor force growth. They will probably line up with events that explain them. I believe one of them was '82 or '87? Going by memory. Maybe '92. But plot "big" downturns, count out a year or two for staying power, and during that period you'll probably see plateaus or dips in your labor force line graph.

    Now consider the 08 collapse et seq involved job losses exceeding the last three recessions combined. Naturally those numbers are exacerbated by the artificial drumming out of workers from the public sector, based on political factors. You might not like public sector jobs, but they are jobs. When you're counting jobs you can't just count the ones you like or you think should be there.

    In general, banishing "should" from our vocabularies would be a nice start to look at these figures. It would also be nice to forget the "rosetta stone" we always want to claim explains it all. A lot of sh1t comes into play.

    The reports are the reports, and the numbers are the numbers. I'm okay with the fact that there's good news here, to the extent that there is slightly less unemployment. There's bad news here, to the extent that it reflects people who just dropped off the rolls, but hey, you want that news to be reflected in a nice pessimistic way? Just extend the unemployment benefits. People will be "looking."

    Here's the thing: you can't "double-count." You can't say "OMG it's bad that people will have longer retirements, retirements are BAD because we have to pay for people when they're too old to work!!!!," and then also say, "OMG it's bad that there's nowhere for a young person to go to find work, because that guy that should be retired is clinging to a job for dear life!!!!"

    So as in all things, trends that just are what they are, have offsetting effects. Yes, there are economics to the wave of retirements that eventually HAD to kick in. But there are also upsides, such as the availability of jobs elsewhere (either for a living breathing human being, or, wherever possible, for a robot.)

    Gen Xers will have to fill management and executive posts, finally, after looking up the age ladder at the widening hind-quarters of an aging boomer for years, from a middle management perch. Their places will be taken by young Xers, then by fast-moving millenials (because they're a bigger generation than the baby boom, replacing a generation half their number as these demographics continue to unfold.)

    Here's the future of the workforce -- the Gen Xer continues to see his poor-me, hard-working, everybody/thing hates me, I'm gonna eat some worms world being unfair and inexplicable, even as he takes the reigns of that world.

    Whoopee. He's finally at the top. And he will be PISSED as the young millennials age, fill the suddenly more plentiful vacancies alongside him, and act like the universe owed them those places (like the MVP trophy everybody got on his youth soccer team.)

    But at the end of the day, the pertinent fact is that the effects of a baby boom will hit us one way at the retired end, and another way at the workforce end.

    All of that is a sidetrack of course.

    There's quite a pertinent effect underway that explains what so puzzles Mish and Tim. You can add to that that the big exodus north from Mexico has reversed itself, despite rightie talking points. The flood of immigration, legal and otherwise, is more like a trickle now. People are going back home. The 08 collapse et seq turned off the proverbial magnet -- which is not US benefits, at the mass level, but US jobs.

    No, we don't have that question, in any relevant way. We're comparing to things we remember in our lifetimes. We're wondering whether we can trust the current data. We're wondering what it means.

    This is bolting on another level of zebra-hunting, because it's too murky and difficult and unsatisfying to look at the world as we have it.

    It's akin to saying "Then we have the question of the great vowel shift" when you're comparing, say, Hemingway to Faulkner. It plays no part because it is from another era... or saying "Then we have the question of legalization of the forward pass" when comparing Montana to Brady.

    It's interesting as an historical footnote, but not much more than that, in this context.

    If you were born in 1946, you get full benes at age 65. The effect you want kicks in years later.

    Social Security retirement age is a pretty powerful predictor of when folks will retire... hence my "dragging" that into play.

    However, your question becomes pertinent down the road. I believe I can retire at 67 (maybe 66, I forget.)

    Being a late boomer/early Xer, I have a little bit of that "wahhhh we got screwed" mentality on this count, of course.

    But the truth of the matter is we're gutting the idea of American retirement based on some misguided puritanical no-work no-eat ethic.

    You would like the answer to be "hey we fixed this they're supposed to work longer, not til 65," but that doesn't kick in yet.

    But there is an associated real answer.

    If you want people to retire later, that means the age cohorts move through the available positions slower, and we eventually start fitting in 4, rather than 3, generations into the workforce.

    I'm going to a retirement for a late-retiring, late pre-boomer next week. There are also a wave of boomer retirements happening where I work. Yay. Look at all the open positions.

    It doesn't matter where I fill such a position, but I'll probably have my pick of "better" jobs (which I was headed toward anyway.)

    I may not veer toward such positions, for personal reasons. However, let's say the magnet of cash/prestige operates on people in such a position without adjustment.

    That person shuffles around the "top floor" for a very long time, in established organizations. Outside of them, in entrepreneurial organizations, he hangs on until he stops being employable. Meanwhile the young, entitled barricudas begin emerging once they have the seasoning to add sufficient business and organizational skills to their superior technological skills.

    There are plenty of the better jobs however -- as the boomers keep getting out of the way. That makes room at the bottom as well.

    It's sort of a little of this, a little of that, good news, bad news. It always is.

    Now I will say that the Gen Xers will have to try like hell to embrace continual change, or be left behind and be replaced by the "natives" to newer technology in the following generation.

    So how this recession keeps affecting us for the years it takes to get the jobs back that we need will hit all of us different ways, depending on how you slice and dice it.

    And, some of the mass effects will be to the whole system -- like the question of why the labor force itself goes through a contraction, just when we most want unemployment numbers to go down.

    Yes, older people nearest retirement who are also laid off will always have a lot of trouble getting the next job.

    That's especially true now that there are so many of them.

    PFnV
    Last edited: Dec 3, 2011
  19. PatriotsReign

    PatriotsReign Rookie

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    The bottom line is that the unemployment rate went down .4 points and most Americans who read that will believe that means more people are working. But the fact is, there aren't more people working or more jobs available. At least not enough to move the unemployment rate.

    The question as to why our gov't changed the way unemployment is reported is certainly valid whether you agree or not. It speaks to motivation of our gov't. If they did indeed change it because it was "softer" on our citizens, then why not use the same rationale to make more changes?

    Yes, I'd have to say it's extremely valid. Anyone who is ok with our gov't slanting reality on our economy....I have some land I'd like to sell you.

    BTW...business commentators on both CNN and NBC had some nice comments to make about the mirage of Friday's jobs report. This is being widely discussed by business analysts everywhere.

    Last edited: Dec 3, 2011
  20. PatsFanInVa

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    More people are working.

    However, more people are also leaving the labor force.

    What you're doing now is saying since "unemployment should be higher," the facts on the ground should be wrong, because you also want to only count one set of effects.

    The truth:
    - You've added 120,000 new jobs
    - You've also lost more than that number who are looking
    - The combination of these effects yields an 8.6% unemployment rate
    - The way we measure unemployment has not been "fixed" to "make it look like" people are working, at least based on this post.

    You so want things to be a conspiracy that you've just changed black to white, so that you don't have to admit to the existence of gray.

    If there is evidence that, say, we measure it different now than under Bush or Clinton, that's way more important. Roosevelt? Not so much, although if you're trying to figure out whether people selling apples in sandwich boards in black and white footage is worse than rioting kids with iphones, well I guess sure, knock yourself out.

    Got CNN on now, and they're noting exacting what the case is:

    1) We added jobs
    2) We lost a lot of job-seekers

    And no, they're not trotting out a "hmmmmm wonder if there's a conspiracy" point.

    Sometimes trends intersect. That's pretty much what you're seeing here.

    Now they're talking about using Youtube to put an online resume out there. Damn, I just got used to the advance technology of the mojo wire.

    PFnV

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