Tuesday, November 10, 2009

Unemployment Is Really at 22.1%

NyPo's John Crudele reports on the latest numbers from Shadow Government Stats and fills in a bit more on how the government is able to whittle down the number to 10.1%:
My friend John Williams of Shadow Government Stats thinks the true unemployment rate would be 22.1 percent if everyone -- all discouraged former workers, encouraged, involuntary part-timers and the like -- were included.

Here are more numbers to fry your brain and cause a temporary sense of helplessness.

The government's household survey (the one from which the unemployment rate of 10.2 percent comes) showed a "decline in employment" of 589,000 in October, which followed a 785,000 employment drop in September.

That number also includes people who say they retired and others who were fortunate enough to have died during the past month and no longer require a job.

More numbers: Last Friday's 190,000 loss of jobs (from the survey of companies) would have been worse if 86,000 imaginary jobs weren't included to the tally.

The government thinks those 86,000 jobs are coming from newly formed small businesses that it can't survey, but last month the Labor Department admitted that this might be overly optimistic
The imaginary numbers Crudele refers to are the numbers that come from the infamous Birth/Death Index by which the BLS estimates how many new firms are hiring people.

What is particularly ballsy of the BLS is to make this estimate as money flows to Goldman Sachs, and the like, which is killing off fund availability for small businesses. As Charles Gasparino recently put it:
Goldman, in case you haven't heard, has been classified as a commercial bank, meaning it can borrow cheaply to finance its risk taking, and can borrow from the Federal Reserve in a pinch. That's why it's amassing such massive profits. And yet not a penny of its massive bonus pool will be lent out to funding-starved small businesses. Think about that: The Federal Government run by the most Liberal Administration in years, is subsidizing big business at the expense to small business.
Well, technically, they are no longer a commercial bank (that lasted only a couple of months). God's work they discovered is best done as a financial holding company, but the Fed money still flows and crowds out the small businessman.

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