Article from ZeroHedge.com. written by Tyler Durden on 05/04/2012.
It is just getting sad now. In April the number of people not in the labor force rose by a whopping 522,000 from 87,897,000 to
88,419,000. This is the highest on record. The flip side, and the reason why the unemployment dropped to 8.1% is that the labor force participation rate just dipped to a new 30 year low of 64.3%.
Labor force participation Rate:
People not in labor force:
Another Article from ZeroHedge.com. Written by Tyler Durden on 05/04/2012.
Propaganda unemployment rate: 8.1%; Real unemployment rate: 11.6%. Reason for difference:organic growth of labor force which grows alongside the broader population. Don’t be confused by cheap explanations on TV why the labor force should be declining (especially with ZIRP meaning pre-retirement workers have to stay in the labor force ever longer to supplant their meager fixed income): the widely accepted definition of the labor pool, that used by the CBO and all other government forecasting agencies, assumes a 90,000 growth in the labor force every month as it has to keep in line with the growth of the US population! The implication is simple: using a real labor force participation rate long-term average of 65.8%, the real unemployment rate in April was 11.6%, based on the 5.4 million additional workers that should be counted as part of the U-3 which then means that the real number of unemployed is not 12.5 million but 17.9 million, which in turn implies a 11.6% unemployment rate in the US. This also means that the spread between the propaganda, and the real number is now 3.5%: the most it has been since the early 1980s.
The fuzzy math in Washington continues.