Jobless Rate Drops to 9.4% – But What’s the REAL Deal?

by Darwin on January 7, 2011

I don’t mean to be a perpetual party-pooper here, but the headline number for unemployment looks good today – better, at 9.4%.  So, why didn’t stocks rally on the news?  Why aren’t people exuberantly rejoicing in the streets?  The reason is the way the unemployment number is calculated.  What actually helps this number is when people “leave the workforce”.  That’s just part of the equation, and when 434,000 people leave the workforce like they did last month, it helps juice the unemployment rate.  But it’s not like 434,000 won the lottery, or decided things are so peachy they no longer need to work – they just gave up!

Rather than rehash entirely, some top blogs with people that describe this more eloquently than myself have laid out the basics and what’s really going on.  Take, The Burning Platform for instance.  He provides a really interesting set of data that indicates unemployment is really at 23%!.  Here’s an especially telling line that I haven’t heard before myself – and isn’t widely reported in the press:

The employment to population ratio dropped again and is now the lowest since 1983.”

Talk about a serious situation!  So, it’s a declining unemployment rate on the headline number, but we added fewer jobs than forecast.  So, the number’s getting better, but the situation isn’t really improving at the rate anticipated.  This has pretty much been the situation for a couple years now.  Housing continues to disappoint, employment continues to disappoint, and things probably aren’t going to improve appreciably faster than they have been.  So, brace yourself for a long haul.  Other blogs that cover topics like this include The Mish, Zero Hedge, Gonzola Lira and more.  You should check them all out – after the rest of this article of course :>

How To Thrive in This Economy

Since it’s been a while since I did a look back at career and education topics, here are 10 Career-oriented articles that you may find relevant, helpful, and employed!  Take a look and if anything, perhaps it will give you some ideas on either a) getting back into the workforce or b) staying in the workforce or c) getting ahead in this stagnant economy:

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{ 1 comment }

1 Janet January 10, 2011 at 4:33 pm

Yep, it’s a sad story when so many who are out of work are discouraged enough to no longer count as “unemployed.”

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