Friday, February 3, 2012

On the Increase in the Non-Participation Rate by 1.2 Million

Since this morning's posting on the improved employment picture, I have been inundated with links to a ZeroHedge story claiming that the improvement in the employment number is because "an unprecedented 1.2 million" dropped out of the labor force in January. Not true. What went down is an adjustment in the BLS data based on the new census data.

The adjustment in my view signals the antiquated collection methods the BLS is using, but has nothing to do with the overall trend in the economy. The number of new jobs was up. It coincides with other economic data showing an improving economy.

CNBC's Steve Liesman's does a pretty good job of explaining things.


  1. ZH readers are always looking for the conspiracy and the "game over" moment, so, you have to take it in stride -- next you're going to get a flurry of emails saying "yeah but his name is liesman."

    any time i post about gold and the dollar at ZH, it gets downvoted. tells me all i need to know.

  2. "What went down is an adjustment in the BLS data based on the new census data."

    Can you explain?

  3. Fedex's Fred Smith was on the other day with a great graph in Squawk Box video:

    It shows the high correlation between investment in equipment and employment, which is great supporting evidence for the ABCT!

  4. ZH is quickly becoming the whipping boy of blogs to derail when challenging the crap coming from the BLS and other elite controlled organizations.

    Here's another take from a different source,


    "As I have discussed previously, on the first Friday of the month (the day the jobs report is released), the unemployment rate is determined by the number of people working divided by the number of people in the labor force.

    If you have 200 people on an island and 92 are working, you have 46% of the people employed, or 54% unemployment. That number is very scary, so the government on this island decides that it will change the way they calculate the number of people unemployed.

    Let's say that of the 200 people living on the island, 100 have been out of work for so long that they have given up looking for a job. "Aha!" says the the government, "these people are no longer in the labor force because they have given up. They should no longer be counted."

    Now there are 92 people working with only 100 people in the labor force. This means they now have only an 8% unemployment rate!"

    END SNIP<<


  5. How does the BLS determine when someone has "stopped looking for a job"?

    If Bob "stopped" looking but something fell on his lap and he took it, was he considered someone who "stopped" looking? Or is an active participant since the desire to work was still there?

    Who defines what any of this means? How can you determine if a person is no longer looking for work but is still unemployed?

    If you are unemployed and are interested in working but are not actively applying then what are you counted as? Lazy? Sure, maybe. But you are still a participant in the labor force in my opinion. Sometimes all it takes is the right price for you to take that job.

    I was under-employed and found a better job, but was not actively looking for one as something happened to fall on my lap and I took it. What am I counted as? Obviously, I was a participant in the labor force as I already had a job...but as stated earlier I was under-employed. So was I not counted as someone looking for work?


  6. "What went down is an adjustment in the BLS data based on the new census data."

    "Can you explain?"

    Hello? Is this thing on? What's the point of having a blog with comments if you never engage anyone?

  7. Wenzel:

    Talk about denying evidence that contradicts your desperate story of "manipulated recovery."

    Zerohedge has a new article explaining why you're wrong about BLS merely updating its "antiquated collection methods."