Friday, November 4, 2011

Good News on Employment

For donkey's years, we have concentrated on the Unemployment Rate as the measure of economic wellbeing.  But the Unemployment Rate has always been a problem.  As right now.

The Unemployment Rate today declined from 9.1 percent to 9.0 percent.  More of the same, it seems.  But if you look at the BLS Household Survey you see that employment has been rising solidly for three months in a row.  Here are the numbers.

Sep139627 331

There are no two ways about these numbers. They are good numbers and show that there is solid increase in employment in the economy.  So why has the Unemployment Rate stayed so high?  The reason is that the labor force is also increasing as more people start to look for work.  Here are the numbers.

Aug153228 -193

The Unemployment Rate is the employment level divided by the labor force. If both employment and labor force are increasing at the same rate, in this case by about 300,000 per month, then the Unemployment Rate won't change.

There is more good news here.  Our friends in the mainstream media will doubtless soon find it necessary to tell us the good news.  In the past, in the early 1970s, early 1980s, and early 1990s, recessions and recoveries usually occurred during Republican administrations, so the MSM was delighted to put the worst face on the economic numbers.  But now that a Democrat is suffering from bad economic numbers things must change.  And the best way to do it is to show that the solid increase in job numbers is good news that is more important than the continuing bad news in the Unemployment Rate.

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