A few days ago I predicted that the unemployment numbers would reveal some “good” news. Well, it seems that prediction came true. Mirabile dictu it has come to pass. Unemployment stands at 9.4% for July, down from 9.5% in June. So, the recession is ending right?
Let’s look a little deeper.
While the CNIP (civilian non-institutionalized population) increased 215,000 people, the CLF (civilian labor force) actually fell by 422,000. Now, this in essence means that while potential working eligible population increased, the actual work force (those ready and able to work) decreased.
The number unemployed actually decreased by 267,000 while the number employed actually fell as well by 150,000. How is it possible that we have lower unemployment while the number of those employed actually falls?
Not only did we lose jobs, but workers as well. Those not in the labor force actually rose by 637,000 people.
You figure the unemployment rate by dividing the number unemployed by the CLF. The smaller the CLF (i.e. denominator) the better the unemployment percentage will look. But, let’s say the CLF had actually remained unchanged. What would unemployment be?
14,462 / 154,926 = 9.3%
So, things are getting better?
What about those 637,000 people “not in the labor force”? Oddly enough, the change in the CNIP and the CLF equals 637,000. Hmmm…
The economy is still hemorrhaging jobs AND workers and we’re supposed to believe that is improving?
The destruction continues…