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Is the Unemployment Percentage Misleading? by: Ed Zimmer August 07, 2009

Is the Unemployment Percentage Misleading? 
by: Ed Zimmer August 07, 2009

The announcement that the unemployment numbers actually fell in July comes as good news, but also raises questions as to how the numbers are being manipulated. While the headline rate fell to 9.4% from 9.5%, an additional 637,000 people suddenly appeared in the "Not in Labor Force" part of the report. This occured at the same time that 422,000 people left the Civilian Labor Force, indicating annother 215,000 bodies suddenly came into existance and settled in the Not in Labor Force pool.

In the past three months, the combined Civilian Labor Force and Not in Labor Force numbers have grown by 418,000. During that same period, the Civilian Labor Force numbers have actually declined by 577,000 people.

While total unemployment numbers have basically remained steady from May to July (14,5 M in May and 14.46M in July), more than a million people have been added to the "Not in Labor Force" numbers. If you look at the numbers that are not seasonally adjusted, the YOY figures are slightly more than 2 million people, with the bulk of that increase in just the last three months!

We are losing more people from the workforce every month, not just to job layoffs, but to people actually moving out of the workforce. They want jobs, but there are no jobs to be found. I have to wonder about those people who are nearing the end of their jobless benefits extensions and where they will end up in the next few months.

DIsclosure: Long SLV, GLD, Physical Metals, retirement accounts