Unemployment Drops to 9.4% - Sigh Of Relief? Not So Fast

Posted by Brian
Though the writer may be breathing a sigh of relief at the new unemployment numbers, me thinks she should slow down just a minute.
She is correct that the unemplyment figures dropped .4% from November, and that the economy added 103,000 new jobs, though short of the 150,000 forecast by the "experts".  By the way, who are these experts who manage to be wrong every month? If they were experts, wouldn't they be right at least some of the time? But I digress.  Anyway, it sounds fairly positive, doesn't it?  But something bothered me about this report. What bothered me about some of the numbers is this one: 556,000.
The 556,000 number is the decrease in people on the unemployment rolls.  How can you add 103,000 new jobs, and have the number of people receiving unemployment drop by 556,000? That is a 453,000 person difference.  The rosy spin put on this by the government is obviously 103,000.  If you assume that those people came off the unemployment rolls, it means that the other 453,000 dropped off the rolls altogether, have given up and are no longer looking for work, and are now in the welfare system.  This is how the government keeps the unemployment figures as low as they do.  It is estimated thatif you add those who have given up and are no longer looking, the percentage is closer to 18% to 19%, - or nearly 1 in 5.  Now it's not so rosy.  By the way, the unemployment figures for January are expected to increase again, due to many retail stores and businesses laying off their holiday workers. At least this is what the experts are saying.

December Unemployment Rate Drops: 103,000 New Jobs Added
January 7th, 2011 by Marina Shifrin

A sigh of relief can be heard across the nation, as the unemployment figures are released. After a rise to 9.8% last month many were concerned about the economical implications. The newest figures show that unemployment is back on pace, slowly lowering, at 9.4% for the month of December 2010, but our economy still has a long way to go.

December was expected to bring a lower unemployment rate with the large number of seasonal jobs giving work the previously unemployed. As predicted, The Bureau of Labor Statistics released figures this morning that indicated a 0.4% percent drop from November to December. Although this is welcome news, the 103,000 jobs added in December falls short of the expected forecast of 150,000 jobs.

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