Why the unemployment numbers you read are way off

Published December 12, 2009

(This is a recurring theme of mine, and I wanted one post I could point to every time I write about it.)

The unemployment figures you read or hear about each month are way off. The real rate is much higher than reported.

It’s not a conspiracy of any sort, just a byproduct of the way the Bureau of Labor Statistics calculates it.

In short, the numbers most media report don’t take into account the unemployed people who are no longer collecting unemployment insurance.

In other words, the figure you read is actually “percentage collecting unemployment insurance,” not “out of work.”

Here, take a look at November 2009.

The BLS started its “Employment Situation Summary” with

THE EMPLOYMENT SITUATION — NOVEMBER 2009 The unemployment rate edged down to 10.0 percent in November…

Ten percent, huh?

That’s what the Washington Post reported. And McClatchy. And many others.

But it’s wrong.

But if you look at the BLS’s table A-1, “Employment status of the civilian population by sex and age,” you see something different.

According to the BLS…

  • There are 153.9 million Americans in the civilian labor force.
  • Of those, 15.4 million are unemployed. Ergo, 10% unemployment.

 

bls-nov09

But there are 6 million more “Persons who currently want a job.”

So in reality…

  • There are 153.9 million Americans in the civilian labor force.
  • Of those, 21.4 million are unemployed. Ergo, 13.9% unemployment.

 

And even that doesn’t tell the whole picture, because there are people who have taken part-time jobs to make ends meet — they aren’t officially looking for work, and they aren’t unemployed, but they want to be working full time.

I wish everyone would write to their local newspaper and news stations every month when these figures are released, and point out the huge discrepancy.

The numbers are there. We just need more people to report them.



  1. Dave says:

    I just thought I would wish you and your family a Merry Christmas such as it is as well add nice new look. I agree on the numbers, they remind me of the global warming figures. p

  2. Some years ago I found the US Bureau of Labour Statistics’ Alternative measure of labor underutilization (their title:

    Currently it shows total unemployment to be around 17.2%.

    http://blog.thrashcardiom.com/2008/09/us-unemployment-rate.html

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