The Jobs Number Is BS Says Former Head Of BLS

thenews 2013.07.18 18:26

After every non-farm payroll report we provide our own breakdown of what the real unemployment rate is in a country in which the labor force participation rate has not been adjusted to normalize for the Second Great Depression. In the most recent such endeavor we found the "Real Unemployment Rate" to be 11.3%.

To wit:

As of May, assuming realistic LFP assumptions, the real U-3 unemployment rate should have been not 7.6% but 11.3%.

Today, courtesy of the Post's John Crudele we find that our estimate was spot on not just from anyone, but the former head of the BLS himself: Keith Hall.

Keith Hall believes the US economy is a lot sicker than the 7.6 percent unemployment rate would lead you to believe. And he should know.
Hall was, from 2008 until last year, the guy in charge of Washington’s Bureau of Labor Statistics, the agency that compiles that rate. “Right now misleadingly low,” says Hall, who believes a truer reading of those now wanting a job but without one to be more than 10 percent.

The fly in the ointment is the BLS employment-to-population ratio, which is currently at 58.7 percent. “It’s lower than it was when the recession ended. I think that’s a remarkable statistic,” says Hall, a senior research fellow at the Mercatus Center at George Mason University in Fairfax, Va.

That level tells Hall the real unemployment rate is actually about 3 percentage points higher than the BLS number. If the jobless rate is unacceptable at 7.6 percent, it’d be shockingly bad if he is right and the true rate is 10.6 percent.

Hall reckons there are millions of U-6 people on top of the 4.5 million long-term unemployed. "This has been a very slow, very bad recovery,” he says. “And I think the numbers have really struggled as a result. In fact, I’ve been very disappointed in the coverage of the numbers."