Saturday, May 03, 2014
U.S. Actual Unemployment Rate Is A Shocking 23%
Economic John Williams provides an analysis of "behind and beyond" government statistics at his website, "Shadow Government Statistics." While mainstream news media reports gloated over lower unemployment numbers last month, his calculations show a much different story. In April, the number of unemployed dropped by 733,000, pushing the official government-reported unemployment rate down to 6.3%; however, there were only 288,000 new jobs added to the economy as the size of the labor forced dropped by more than 800,000 during the month of April. The participation rate, which indicates the number of working-aged people in the workforce, dropped to 62.8%, the lowest level in 36 years. The broader unemployment number is at least double the reported rate, or close to 13%, which includes workers who have recently dropped out of the workforce after giving up on finding a job or dropped from unemployment insurance benefits, as well as those workers who are only employed in part-time jobs. The Clinton administration in 1994 altered the official counting method to exclude the so-called discouraged workers to make the official seasonally adjusted unemployment rate look better than it really was. If unemployment was calculated the way it was prior to 1994, the current unemployment rate would be 23%, not 6.3%, according to Williams' shadow government statistical calculation.