Behind The Mic With Joe Mathieu: Unemployment Numbers Real or Not?
BOSTON (CBS) - It’s the granddaddy of all economic reports. And it came out Friday.
I’m talking about the Labor Department’s monthly take on the job market. And you should not believe all the numbers inside.
Especially the unemployment rate which stands at 7.4-percent.
People obsess over this number. But I don’t. You shouldn’t either. And there’s a good reason for that.
It’s not real.
I’m not suggesting the government is lying. But it’s not giving you the whole story either.
That’s because of the way it crunches numbers after surveying tens of thousands of households around the country.
Here’s how they do it – they count the number of people who have jobs and those who are looking for jobs. And come-up with an average.
But they do not include people who are “underemployed” or more importantly people who have simply given up looking for work.
Turns out that’s a lot of people.
And when they’re included the real unemployment rate rises above 14-percent, roughly twice as higher as the number that came out Friday.
That’s one reason why Wall Street doesn’t pay attention to it. Instead, experts watch the number of jobs created. Last month it was 162,000.
That may sound like a lot of jobs. But it was less than expected. And economists say we need to create about 200,000 jobs each month just to keep up with population growth.
Suggesting that we didn’t gain anything last month.
Think about that when you hear analysts frothing over jobs Friday.
Follow Joe on Twitter @joemathieuwbz