January 2012
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Real Unemployment Rate is 11.2%

Civilian Participation Rate Annual Numbers

The official unemployment rate has fallen from 8.6% to 8.5% and the average person will not question the statistic. While using the current unemployment rules the figure is correct, workers who are discouraged and fail to make unemployment claims and/or fail to look for work are dropped from the calculations, it certainly is not reflective of the overall economy.

Briefly I use the July 1999 economy because federal spending was at 18.2% of the GDP, today it is 25.3%, and the civilian participation rate peaked at 67.9%, today it is at a 28 year low of 63.8%. Simply put this 1999 economic performance is not some fantasy, it has been achieved and could be duplicated with effective federal government management team that understood the proper role of limited government.

The media is reporting jobs added but the BLS reports a loss of jobs.

The labor force dropped for the fifth strait month from 154,812,000 to 153,373,000. Using the “1999” criteria the labor force, combined with population growth rates, would be 158,491,000 or 5,118,000 more workers.

Employed workers dropped in December from 141,070,000 to 140,681,000 or a loss of 389,000 workers. Using the “1999” criteria workers with jobs would number 151,394,000. Using this data it is apparent there are approximately 10,713,000 American who would prefer to work but are not due to extremely poor macroeconomic policies.

Doing the math the “1999” unemployment rate is 11.2%. this is pretty close to a estimate by Zero Hedge that was 11.4%.

4 Responses to Real Unemployment Rate is 11.2%

  • Learn from yesterday, live for today, hope for tomorrow.-Einstein

  • Can you post your Calculation of this number (11.2%)? As an engineer, I’m curious as to how it’s calculated. Thanks

  • Pretty simple calculation.

    Go to Fred or Federal Research Economic Data from the St. Louis Federal Reserve, Google FRED St and it will pop up, look at civilian participation rate, or civilian employment participation rate, July 1999, peak employment years, use those percentages as your “base” employment percentages.

    Then the the actual employment/unemployment numbers for those years, I think 1999 was 137,000,000 or something employed, and simply move the number forward based on population growth to 2012. So if the population grew at, say 12%, then the 137,000,000 wold be about 153,000,000 today, Ceteris paribus, “with other things the same.” Also have to get the total work force for July 1999 and do a standard unemployment calculation, very simple divide WF by TWF problem.

    With the numbers moved forward you can see the deterioration of the work force percentages pretty dramatically, millions, tens of millions, from a good functioning economy.

    Pretty simple.

    The math part is very simple and strait forward. The hard part is making sure you are using the right tables and numbers from the hundreds of graphs and statistics that best fit what you are trying to communicate.

    What I will have to start doing soon is correct the numbers to reflect the increase in retirement when those ratios chance drastically. I have not done it for the blog but if I get 10,000 hits I will research it. 1999 to 2012 is not a huge time frame.

    Play around with it and you will get the hang of it. Its a lot of fun. You will love the FRED ST web site.

  • 83.7% of statistics are made up, on the spot… Looking into it a little bit, the range is 69.42 – 89.0%… Further investigation shows that it is between 0.00 and 99.99% +/-0.01 accuracy, based entirely on; Who. What. Where. When. Why. and of course, How…

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