Behind the Headlines Video
Days ago, the government announced employers added 243,000 new jobs. And unemployment fell for a fifth straight month. So why does this feel kind of phony?
It's all how the numbers are presented. There are just over 154 million people in the US labor force. They are divided into two categories: employed and those "officially" classified as "unemployed." The official designation is very important.
Anyone who is unemployed and has not looked for a job in the previous four weeks is dropped from the government's officially unemployed numbers and is moved into a third category -- "not in the labor force." Millions of discouraged workers unable to find a job are no longer counted as unemployed.
About 88 million people - a record high -- are designated as "not in the labor force." When the government eliminates workers from the "unemployed" category it can mathematically make the unemployment rate drop. Even if it hasn't.
The feds removed more than 1.25 million people from the "unemployed" category in just the month of January -- and presto -- the unemployment rate dropped.
A more accurate number is the unemployed, plus the underemployed and part-time workers. This figure is 15.1%.
But I suspect the "official" unemployment rate will continue to drop thru the end of 2012.
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