From Zero Hedge: Real Jobless Rate Is 11.4% With Realistic Labor Force Participation Rate
One does not need to be a rocket scientist to grasp the fudging the BLS (Bureau of Labor Statistics) has been doing every month for years now in order to bring the unemployment rate lower: the BLS constantly lowers the labor force participation rate as more and more people “drop out” of the labor force for one reason or another.
[EC (Editorial Comment): The Labor Force Participation Rate is a measure of the active portion of an economy’s labor force. The participation rate refers to the number of people who are either employed or are actively looking for work. The number of people who are no longer actively searching for work are not included in the participation rate. In a poor economy, such as this, many people get discouraged and stop looking for employment and as a result, the participation rate, by percentage, decreases.]
While there are some floating speculation that this is due to early retirement, this is completely counterfactual when one also considers the overall rise in the general civilian non institutional population.
In order to back out this fudge we are redoing an analysis we did first back in August 2010, which shows what the real unemployment rate would be using a realistic labor force participation rate.
To get that we used the average [labor force participation] rate since 1980, or ever since the great moderation began. As it happens, this long-term average is 65.8% (chart 1).
We then apply this participation rate to the civilian noninstitutional population to get what an “implied” labor force number is, and additionally calculate the implied unemployed using this more realistic labor force. We then show the difference between the reported and implied unemployed (chart 2).
Finally, we calculate the jobless rate using this new implied data. It won’t surprise anyone that as of December, the real implied unemployment rate was 11.4% (final chart) – basically where it has been ever since 2009 – and at 2.9% delta to reported, represents the widest divergence to reported data since the early 1980s.
And because we know this will be the next question, extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%, which should be just before the presidential election.
[EC: Someone, with more clout than I, must pick up this torch & carry it. Do any of our elected officials or those running for office have the courage to challenge these lies?]