I've gotten the impression from past conversations, that the "unemployment rate" is one of those things that the general population thinks Economists make more complicated than it has to be. "Just tell us what the rate is!" I've had people say to me.
The truth is, it's not that easy, but until very recently, no one was interested. Now everyone seems to be aware that there are birth/death issues, seasonality adjustments etc. And while those issues are designed to add accuracy (and do if responsibly used), in the current environment they just distort the real economic activity.
The point I most mean is the "labor force participation" statistic. The idea is that when someone is unemployed but is no longer looking for a job, they are not providing any additional "demand for work" (technically it's "supply of labor") so they must be removed from the pool. In literal terms this makes sense, but is easily distorted.
I think this zerohedge post goes a long way toward illustrating the problem, and the way the distorting effect of the reporting method that has crept in over time.
5 comments:
tthis is where mitt should take a play outa clintons playbook. he always got ahead of the upcoming story.."the right wing conspiracy" etc.. mitt should be making a commercial right now to start airing next week on this.. call it unemploy number for dummies.. that way when odummy stands up and says hes created 4 mil new jobs the people already know its smoke and mirrors. or when he says the unemply number is down they already know smoke and nirrors.. get ahead of him at every step...
not a huge fan of grover norquist but he and david walker have just made about 5 commercials for mitt from buffet taxes to alternative min tax etc..
Here's how I would say it so that the 14 to 30 demo "gets it."
We need to quarantine the Obama performance drags and reboot the economy. The policies of a swarm of small businesses will put unemployment on the run far better than Washington policies that do not update.
These guys don't know what a pump that you can prime is. And why you would talk about "spurring" the economy when nobody rides horses, let alone barbaric Western, is beyond me.
rev - "... Washington laws that do not update."
well said frith....
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