Putting the Lie to the Unemployment Rate
January’s unemployment numbers made it painfully obvious that the government’s unemployment calculations are a mess.
In case you missed it: the January unemployment number came in at 9.0%, which is a decrease of 0.4% from December’s 9.4%. Â But the other interesting statistic in January was the net number of new jobs: 36,000.
Now, if 36,000 new jobs can lower the unemployment rate from 9.4% to 9.0%, then 810,000 jobs should eliminate unemployment altogether. Â And conversely, a loss of 8,190,000 jobs would make everyone in the US unemployed. Â Put another way, it suggests there are a total of 9,000,000 eligible workers in the United States.
But here’s the problem: there are something like 140 million employed people in the US. Â And if that’s the case, then it should take closer to 560,000 jobs to swing the unemployment rate by 0.4%.
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