In a time of universal deceit - telling the truth is a revolutionary act
- George Orwell
If you strip out the 92,000 jobs that Government "estimated" were created on a net basis from the formation and termination of new businesses during the month of March and assume that the Government was egregiously wrong with this estimate - which it likely was - then in fact it's possible that employment - the way the Government guesstimates it - actually declined in March (here's the birth/death model report: LINK).
But let's play "pretend" with the birth/death numbers and look at input behind the headline report, which is what most people in this country look at and assume as fact. From February to March, the Government tells us that the "civilian non-institutional population" (people 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions - penal, mental facilities, homes for the aged - and who are not on active duty in the Armed Forces) increased by 167,000. BUT, the "civilian labor force" declined by a shocking 496,000. That's half a million people who left the labor force. Disappeared. They don't matter anymore except that they get student loans, food stamps and social security disability.
Next the Government tells us that the "employed" number of people declined by 206,000. So, how on earth, when you look at those numbers, can the Government tell us that employment increased by 88,000? The numbers above come from the Household survey and are not seasonally adjusted. In other words, they don't get put thru Government statistical meat grinder and spit out in the form some kind of unidentifiable "sausage." It looks to me that based on the household statistical survey, our economy lost a lot of jobs in March. Here's the household data: LINK
Now, the Government also wants us to believe that the unemployment rate declined to 7.6%. What a great looking number for the headlines and the idiots who report mainstream news. But let's look under the "hood" of that number. The unemployment rate is calculated by taking the number of people defined to be in the "civilian labor force," 155 million and divides it by the "civilian labor force," 244.9 million. That yields a civilian labor force participation rate of 63.3% Last month it was reported to be 63.5%. In March 2012 it was 63.8%. Hmmm. I went and dug up the history of this number on the Federal Reserve website, LINK, this is the lowest percentage of the population of the U.S. that is "participating" in the work force going all the way back to May 1979.
The way the Government "engineers" a decline in the unemployment rate is it gives more people student loans to go to "college" and it gives social security disability benefits to more people who no longer qualify for jobless benefits (the jobless benefits people are part of the "labor force" number). The unemployment rate is calculated by taking the number of unemployed and dividing it by the civilian labor force number. The labor force participation rate hit a 34-year generational low. Given that this many people dropped out of the labor force entirely, mathematically we would expect that the unemployment rate should decline. But remember, there's really more like 500,000 people who completely disappeared from the Government's meat grinder. That's the "sausage" that was consumed by the system and a high percentage of those people were moved from receiving jobless benefits to other forms of Government welfare assistance.
As you can see if you were able to stay awake while reading that dry analysis, there's a huge difference between the headline numbers that get fed to the general public and the actual facts about the number of workers employed in our system. In my view, it's truly catastrophic that an opportunistic politician like Obama will likely later today get in front of the public and promote the decline in the unemployment rate and take credit for that. It's truly tragic that the truth is that our system continues to lose 100's of thousands of workers each month.