The US Government released some startling official unemployment numbers for the month of September. Are those a reflection of the real unemployment situation? Or, are those unemployment statistics highly misleading?
Firstly, let's review the actual reported official unemployment data for September, exactly as they were reported by the Bureau of Labor Statistics (BLS):-
Number of people employed - 155.1 million
Number of unemployed - 12.1 million
Unemployment rate - 7.8 %
How did these numbers compare to the official unemployment data for August?
Here is a look at the official unemployment data for August:-
Number of people employed - 154.6 million
Number of unemployed - 12.5 million
Unemployment rate - 8.1 %
If we compare the official unemployment data for September versus August, we see the following delta:-
Number of people employed - 0.5 million more in September than August
Number of unemployed - 0.4 million less in September
Unemployment rate - 0.3 % decrease in September
Compared to recent history, this delta is extraordinary and certainly lends itself to question, or at the very least a raised eyebrow. Some very influential business magnates and thought leaders have publicly questioned the data and are themselves suspicious of the sudden change in the official unemployment data.
Some deeper investigation into the reported data, shows that there has been a sudden and influential change in the survey. Government researchers have been instructed to change the angle of the research questions so as not to enquire whether interviewees are not working in their chosen career field, but rather, and very simply, are interviewees not doing any work, of any type, whatsoever. This subtle, but yet misleading question, has resulted in many interviewees admitting that they are doing something, at least, in order to bring in some income for their families. The interviewees are not asked whether the activities that they are engaging in are bringing in sufficient revenue to pay the bills. Thus, many respondents are, very honestly, replying that they are not doing nothing about their unemployment, but are trying to start a home based employment opportunity for themselves. And, yes, you guessed it, a number of folks have resorted to exploring the world of internet marketing in order to attempt to generate income to replace the income they were earning before unemployment struck them.
Thus, internet marketers, and similar folks, have now been included in the government's official unemployment data definition as "employed", irrespective of whether they have made a single dime or not.
Are we, therefore, to trust the government's official unemployment data?
The answer is, somewhere between a yes and a no. The official unemployment at its core is more than likely accurate. However, what is to be distrusted is any variation, from month to month, in the definition provided to interviewees of what constitutes employment or unemployment. In the current situation, what would be more instructive would be to provide two sets of data:-
- One that includes the new definition being provided to interviewees
- A second that asks the interviewee to respond based on the historical definition
In that way, a delta can be established between the two definitions and the official unemployment data can be more transparent and therefore lead to less skeptism and doubt.
Alternatively, a less desirous method, would be for Congress to pass legislation that changes in data collection techniques and definitions cannot be made within 6 months of any major federal election. That would hopefully remove the question mark of political influence being behind the official unemployment data.
In summary, the timing of this sudden change in the definition of employment, just weeks before the 2012 election, is questionable and raises suspicions regarding the reason and timing for this change. Are those that sit at home and surf the net hoping to get paid a penny per click really employed? Seems a stretch to me.
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