The Bureau of Labor Statistics (BLS) computes unemployment by taking a Household Survey whereas a much more accurate picture could be gained in terms of lost jobs by considering weekly first time unemployment claims. After all almost everyone that files a first time unemployment claim can be considered to have recently lost a job. Sure there are some who might apply who aren't eligible for some reason, but what we really need to know on a weekly or monthly basis is how many jobs were lost and how many jobs were created. Subtracting the two will give us net jobs lost or created for a particular time period.
Interestingly enough Unemployment Insurance Weekly Claims Data for Initial Claims yields some data which contradicts the more rosy Household Survey. It might be noted that the reason given for not using initial unemployment claims as a measure of unemployment is that it understimates the number of those unemployed.
Some people think that to get these figures on unemployment, the Government uses the number of persons filing claims for unemployment insurance (UI) benefits under State or Federal Government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI [Unemployment Insurance] information cannot be used as a source for complete information on the number of unemployed.
We see from the report that for 2009 the weekly report for new claims filed was never less than 400,000 and usually considerably more. For 2010 there are only two weeks so far where the weekly report shows slightly less than 400,000 new claims. Therefore, there are at least 1.6 million jobs lost per month in the American economy on a regular basis and this extends back to 2007. For instance, for the month of May 2010 there were 2,042,629 initial unemployment claims. We can take this as a minimum figure for jobs actually lost.
So we might ask how many jobs were created in May 2010? There were 411,000 jobs created in May but only 41,000 in the private sector. But even taking the more rosy figure of 411,000, that's only approximately one week's worth of those losing jobs according to the weekly new unemployment claims. So 5 times more people lost jobs than gained jobs and the net jobs lost were 1,631,629. 290,000 jobs wrere created in April, but there were 1,762,815 initial unemployment claims in April so there was a net job loss of at least 1,472,815 jobs by my calculations. How can there be job losses of around 400,000 jobs a week, week after week, and the government can say that the economy's improving? This defies credulity!
The number of jobs gained per month is based on a so-called "Establishment Survey." This is done by questioning business establishments as to how many jobs they've added. But as one can plainly see, the numbers for net jobs added according to the establishment survey does not jibe with the weekly initial unemployment claims. For June 2010 the weekly initial unemployment claims again were around 400,000 per week. Yet the government reported job losses of only 125,000 according to the BLS.
Total nonfarm payroll employment declined by 125,000 in June, and the unemployment rate edged down to 9.5 percent, the U.S. Bureau of Labor Statistics reported today. The decline in payroll employment reflected a decrease
(-225,000) in the number of temporary employees working on Census 2010. Private-sector payroll employment edged up by 83,000.
Obviously, the government isn't taking all the job losses as indicated by the weekly initial unemployment claims into account regardless of their survey. The figures for jobs gained in the economy may also be suspect. From my analysis, approximately 1.6 million jobs would have to be created each month just to offset initial unemployment claims in recent history.
The government defines and redefines categories all the time thereby making the labor statistics seem more rosy. Take discouraged workers, for example.
Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.
The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000, eliminating significant surveying in the inner cities. Despite claims of corrective statistical adjustments, reported unemployment among people of color declined sharply, and the piggybacked poverty survey showed a remarkable reversal in decades of worsening poverty trends.
Who knows what shenanigans will be employed to get the unemployment rate down from the current officially reported approximate 10%? The government is already overestimating how rosy the economy is. The next administration might just redefine unemployment rate to create 5% unemployment, a more acceptable figure. They call a recession over when there are two consecutive quarters of growth in the GDP no matter how many unemployed people there are. So now according to them we are experiencing "growth" in the economy. According to the Shadow Government Statistics website, the current unemployment rate is actually around 22%, and with approximately 150 million in the labor force, that equates to about 33 million people!
