Search


Subscribe to AFM


Subscribe to AllFinancialMatters
by Email

All Financial Matters

Promote Your Page Too

The American's Creed

Site Sponsors

Books I Recommend


AFM in the Media


Money Magazine May 2008

Real Simple March 2008

Blogroll (Daily Reads)

« | Main | »

U.S. Adds 96,000 Jobs and Yet the Unemployment Rate Drops to 8.1%

By JLP | September 7, 2012

I don’t know about you guys but I think it’s misleading the way the unemployment rate is calculated.

Today’s employment report shows that 96,000 jobs were added in August. I did a quick search and found that we need to add about 250,000 jobs per month in order to drop the unemployment rate. We added 96,000 jobs but 400,000 people are no longer counted in the numbers because they gave up looking for work.

So, what’s the real unemployment rate?

According to the last paragraph of this article, it’s around 14.7%, or nearly TWICE the official number.

Topics: Business News, Economic Indicators, Economics | 31 Comments »


31 Responses to “U.S. Adds 96,000 Jobs and Yet the Unemployment Rate Drops to 8.1%”

  1. Ben Says:
    September 7th, 2012 at 9:24 am

    It dropped because roughly 350,000 people gave up looking for a job.

    sad day, I do wish the media focused more on the U6 more accurate number during times of recession.

  2. clocks Says:
    September 7th, 2012 at 11:20 am

    I agree, the way we currently report unemployment is very misleading. Wish they would find a better calculation.

  3. Kate Says:
    September 7th, 2012 at 12:44 pm

    And how many are under employed?

  4. Matt Says:
    September 7th, 2012 at 12:45 pm

    Welcome to JLP’s world, where 14.7 is “nearly” 16.2!

    Hey selective reader, since you brought it up, do you want to mention how in the exact same paragraph it’s noted that this other unemployment rate went from 15 to 14.7?

  5. Charlie Says:
    September 7th, 2012 at 1:28 pm

    88 MILLION no longer in the workforce… this is progress? This is the economy “turning the corner”?

    I’m not buying what Obama is selling….

  6. Jack Says:
    September 7th, 2012 at 3:39 pm

    The Household Survey says we LOST 119,00 jobs.

    Call PEOPLE, and they will tell you they are losing jobs. Call ESTABLISHMENTS, and you get to choose which ones you survey, and the ones that went under don’t answer their phones.

  7. Squeezer @Personal Finance Success Says:
    September 7th, 2012 at 4:39 pm

    I don’t understand how someone can give up looking for work

  8. Jack Says:
    September 7th, 2012 at 6:40 pm

    Dude, I know plenty. You live in a small town, and no-one’s got the “Help Wanted” sign out. You’ve knocked on all the doors anyway. They know you. Hell, everyone knows everyone, and know who needs work. There just isn’t any. How many times do you knock on the same doors?

  9. BG Says:
    September 8th, 2012 at 12:04 am

    Its truly sucks if you are out of work, but 4 years ago it was MUCH worse — losing over 600 thousand jobs a month, every month!

    Yes, I get the statistics that a 96k positive growth rate isn’t keeping up with the population, but it is still better that those huge job loss numbers of the recent past, Charlie.

  10. Jack Says:
    September 8th, 2012 at 1:29 am

    Yup — a lot of folks lost their jobs when the dems priced them out of work with the Minimum Wage hike. Now they have to wait for inflation to catch up with it again.

  11. Valkyrie Frost Says:
    September 8th, 2012 at 1:56 am

    Looking at the water glass the other way, that means the unofficial employment rate is at ~85%. That’s still better than it was in the Great Depression era and with a much larger population.

  12. Jack Says:
    September 8th, 2012 at 7:19 am

    If the labor force were the same size it was when 0bama took office, the official unemployment rate would be over 11% and the U6 about 20%.

  13. BG Says:
    September 8th, 2012 at 8:38 am

    Jack) I’m fairly confident minimum wage rates have not exceeded inflation rates….you have a source?

  14. Jack Says:
    September 8th, 2012 at 7:34 pm

    Any sudden increase in the price of a commodity will result in less purchasing of that commodity.

  15. BG Says:
    September 9th, 2012 at 9:10 am

    So your are saying minimum wage rates should be adjusted every year for inflation, instead of rarely/sporadically (and only when a Democratic president makes it their priority)?

    I agree with you.

  16. Jack Says:
    September 9th, 2012 at 8:41 pm

    Yes, BG. It should be set to ZERO, and be multiplied by one plus the inflation rate.

  17. BG Says:
    September 10th, 2012 at 11:01 am

    We should get rid of the child labor laws too then? They have small fingers that are more suited for greasing heavy machinery in factories (sarcasm).

  18. Jack Says:
    September 10th, 2012 at 11:08 am

    Playing it by the book, eh, BG? When you’ve lost the argument, start another.

  19. BG Says:
    September 10th, 2012 at 4:55 pm

    You said the recession was caused by minimum wages increasing faster than inflation, which was flat out wrong. Your defense, you said minimum wage rates should be set to zero. So my reply to you (about child labor laws) was on the same level as your nonsense answer.

  20. Jack Says:
    September 10th, 2012 at 8:22 pm

    No, BG, I didn’t say that. Please go back for reading comprehension class.

  21. Jack Says:
    September 10th, 2012 at 8:23 pm

    But, yes, the Minimum Wage should be ZERO. If you want to index it to inflation from there, I’m fine with that.

  22. BG Says:
    September 11th, 2012 at 7:05 am

    Jack said: “Yup — a lot of folks lost their jobs when the dems priced them out of work with the Minimum Wage hike. Now they have to wait for inflation to catch up with it again.”

    You make outlandish claims and broad generalizations against a political party, the burdon of proof is on you.

    You need to aprove that minimum wage rates have exceeded inflation rates. And also show me that minimum wage increases only happen under democratic leadership. Linking to an online source will be sufficient.

    As for others not able to understand the meanings of what you write: that is your failure, not your audience.

  23. Jack Says:
    September 11th, 2012 at 9:22 am

    Really? Are you THAT daft? On July 24, 2007, the Minimum Wage went from $5.15/hr. to $5.85/hr. That’s a 13.6% increase in one day. Has inflation ever increased 13.6% in one day?

    Now, let’s look a little longer. Between JUL 23, 2007, and JUL 24, 2010, The Minumum Wage went up to $7.25/hr. That’s a 40.8% increase in two years.

    That law was passed by a DEMOCRAT-run Congress. So was the original law in 1938. So were the 1961 amendments, and the 1966 amendments, and the 1974 amendments, and the 1977 amendments, and the 1989 amendments. Only the 1996 amendments were passed by a Republican congress.

  24. Charlie Says:
    September 11th, 2012 at 10:43 am

    Those who point out that things were “much worse when Obama took office” are also those who confuse bottoming out as “recovery.”

    Just because jobs are not being lost at a rate as high as when Obama took office, doesn’t not mean things are better… only less bad. This is not growth. It is not a recovery. We are not better off…. unless you’re a wall street investment banker maybe.

  25. BG Says:
    September 12th, 2012 at 1:48 am

    Its like arguing with a rock, a pointless exercise.

    Under Bush’s watch, the minimum wage increased from $5.15 to $6.55, a 21.4% increase over two years.

    Under Obama’s watch, min wage increased from $6.55 to $7.25, a 9.7% increase over the past 3 1/2 years.

    So: #1 rates increased faster under bush than obama. #2 even with those increases, minimum wage still have not kept pace with inflation.

    “That’s a 13.6% increase in one day. Has inflation ever increased 13.6% in one day?”

    The rate hadn’t change for over 9 1/2 years! Yes, inflation was faster than 13.6% over those nine years when the min wage was stuck at $5.15.

    Your argument is so asinine anyway as only about 4% of all US workers are paid that minimum rate. But in your mind increasing the scrap wages of that tiny portion of the population is what caused the massive job losses across the country — do you really believe the stuff you post here?

    Charlie) if you dont think a 96k positive growth rate is not better than a monthly 600k loss, then you are as blinded as my friend Jack here.

    Another rock…welcome!

  26. Jack Says:
    September 12th, 2012 at 5:13 am

    > The rate hadn’t change for over 9 1/2 years!

    And we had the lowest unemployment rates since…. what? …the 1950’s?

    It is not just the people earning minimum wage that are hurt when it is raised. Those who employed them, but who could no longer afford them, lost that productivity. Some had to close up shop. All that economic activity was lost.

    Furthermore, the lowest rungs of the economic ladder were removed, making it harder for inexperienced, unskilled workers to get jobs. They stay out of the job force, and we lose all that economic activity too.

    And was that 96,000 jobs gained, or 119,000 lost? It depends who they asked.

  27. BG Says:
    September 12th, 2012 at 7:59 am

    If what you say is true then in 1996/1997 when minimum wage increased from $4.25 to $5.15 (a 17.4% increase over two years) then jobs were lost / unemployment went up.

    Nope, you are wrong: unemployment dropped.

    How can that be? This doesn’t fit with your preconceived notions and hatred of the democratic party.

    You getting tired of defending your losing position yet?

  28. Jack Says:
    September 12th, 2012 at 9:25 am

    A 40% increase in two years has more impact than a 17% increase in the same time period. In 2007 we saw that 17% jump in a single day.

    Still, your point is well taken. However, if you look more closely at the numbers, in the six months prior to the OCT 1, 1996 increase, job growth averaged 0.20% per month. In the following six months, it was only 0.15% per month, and after the SEP 1, 1997 increase, it was down to 0.10% per month.

    Yes, unemployment continued to drop, but not at the pace it had been dropping prior to those increases.

  29. Evan Says:
    September 16th, 2012 at 7:41 pm

    Why wouldn’t the media publish the “real” unemployment rate? Please don’t say b/c of Dem President since the “real” number was never really used during President Bush either.

  30. John Says:
    September 18th, 2012 at 3:50 am

    Sounds better than the 700,000 jobs per month lost under Bush. Oh I forgot, according to the Rebpulicans, those eight years didn’t exist. I wish that was true!

  31. Jack Says:
    September 18th, 2012 at 5:45 am

    We were doing just fine until the democrats raised the price of unskilled labor.

Comments