Saturday, February 7, 2015

Are the unemployment numbers reported by the BLS manipulated on purpose? Or did 4 percent of the working population just decide not to work anymore?

There is a saying that one can pick numbers to make any case.  I suspected that this has been happening with the unemployment numbers reported by the US government for some time.  It seems to me like reports played with the labor participation rate to show better than expected unemployment numbers.  So I decided to research the numbers myself and see what came up.  

First I looked at the graph for unemployment reported by the government.  This takes into account employment participation that can be subjective and subject to manipulation in reporting.
The numbers show that the unemployment is almost back to 2008 levels.   It would mean a dramatic improvement in the economy from 2010.

Data extracted on: February 7, 2015 (12:29:02 PM)

Labor Force Statistics from the Current Population Survey


Series Id:           LNS14000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Rate
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 years and over














Next I looked at the percentage of people working.  
The stats below show the percent of people working (full or part time) compared to the total population,  When we look at this chart, we see that the amount of people actually working is still
very far away from 2008 working percentage numbers. 

Percent of Population Working Report 2/7/2015  <--Link to BLS site 

Labor Force Statistics from the Current Population Survey


Series Id:           LNS12300000
Seasonally Adjusted
Series title:        (Seas) Employment-Population Ratio
Labor force status:  Employment-population ratio
Type of data:        Percent or rate
Age:                 16 years and over














So how can this be?  Below is the labor participation rate.   Remember, this is the number that can be "subjective" and subject to interpretation.  The BLS reports that there are about 4 percent less people working or looking for work in 2015 than in 2008.  So if you have less people looking for work, the unemployment numbers reported are lower eventhough there are less people working in terms of percentage.  


Data extracted on: February 7, 2015 (12:42:03 PM)

Labor Force Statistics from the Current Population Survey


Series Id:           LNS11300000
Seasonally Adjusted
Series title:        (Seas) Labor Force Participation Rate
Labor force status:  Civilian labor force participation rate
Type of data:        Percent or rate
Age:                 16 years and over



















Coincidentally, the reduction in percent of population that is currently employed is also about 4 percent lower.  This begs the question, 

"Are the unemployment numbers reported by the BLS manipulated on purpose? Or did 4 percent of the working population just decide not to work anymore?"   The chart shows the participation rate begins to decline in late 2008 and steeper in 2009.    An unemployment is actually higher than reported.  

But some good news...
The US economy is improving but very slowly.  Much slower than is being reported by the BLS  unemployment numbers that are being published.   According to the second chart only recently have we have begun to actually add significant numbers of jobs to indicate more people working as a percent of the population.