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Real Unemployment Rate Rises To 11.4%, Difference Between Reported And Real Data Rises To Record

Posted By admin On September 6, 2013 @ 10:49 am In Money Watch | Comments Disabled

Zero Hedge [1]
September 6, 2013

As frequent readers know, for the past three years we have compiled data looking at the US unemployment rate assuming a realistic labor force participation rate, which is the trendline average of the past three decades, or in the mid-65% area. Using such an approach allows us to estimate what the true unemployment (U3, not U6 underemployment) rate is. We can report that as a result of the latest monthly collapse in the labor force whose only purpose was to lower the unemployment rate from 7.4% to 7.3%, the actual implied unemployment rate just rose from 11.2% to 11.4%.

This can be seen on the chart below. Also can be seen that the spread between the reported manipulated unemployment rate and the real rate accounting for a realistic labor force participation, just hit a record high 4.1%. In other words, unemployment data manipulation by the BLS was never been greater in the history of the US than in the past month.

Real Unemployment Rate Rises To 11.4%, Difference Between Reported And Real Data Rises To Record Real%20Unemployment%20Rate 0 [2]

Perhaps most ironic is that last month’s massive jobs revision was as we predicted based on the JOLTS breakdown of data [3], which showed that the Establishment survey was persistently overestimating what the underlying situation is. We said [3]:

This means that either the JOLTS survey is substantially underrepresenting the net turnover of workers, or that once the part-time frenzy in the NFP data normalizes, the monthly job gains will plunge to just over 100K per month to “normalize” for what has been a very peculiar upward “drift” in the NFP “data.”

Q.E.D.

 


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URLs in this post:

[1] Zero Hedge: http://www.zerohedge.com/news/2013-09-06/real-unemployment-rate-rises-114-difference-between-reported-and-real-data-rises-rec

[2] Image: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/08-2/Real%20Unemployment%20Rate.jpg

[3] as we predicted based on the JOLTS breakdown of data: http://www.zerohedge.com/news/2013-08-06/bls-catches-bls-misrepresenting-2013-job-gains-over-40

[4] Persons Not In Labor Force Who Want Job Now Jumps To All Time Record; Real Unemployment Rate At 12.8%: http://www.prisonplanet.com/persons-not-in-labor-force-who-want-job-now-jumps-to-all-time-record-real-unemployment-rate-at-12-8.html

[5] Real U-3 Unemployment Rate: 11.6%: http://www.prisonplanet.com/real-u-3-unemployment-rate-11-6.html

[6] Labor Force Participation Rate Drops To Fresh 25 Year Low, Adjusted Unemployment Rate At 11.7%: http://www.prisonplanet.com/labor-force-participation-rate-drops-to-fresh-25-year-low-adjusted-unemployment-rate-at-11-7.html

[7] Real Unemployment Rate 14.6 Percent in October: http://www.prisonplanet.com/real-unemployment-rate-14-6-percent-in-october.html

[8] Real US unemployment rate at 16 pct: Fed official: http://www.prisonplanet.com/real-us-unemployment-rate-at-16-pct-fed-official.html

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