Andylusion
Platinum Member
The jobless claims only measure those in the system. The general unemployment numbers, are based off the CPS, which surveys 60,000 households.
Now from there, according to the BLS own records, the response rates to the surveys is between 44% and 63%. So we can say that roughly half of those households respond to the survey. So we are looking at a mere 30,000 households, to determine the unemployment rate of 310 Million people.
If the households surveyed happen to have a bunch of kids, and a significant number hit the 15 years old, which is the age at which they are counted, then sudden unemployment ticks up. Ten 15 year-olds, is 30,000 more unemployed people.
At the other end, 10 people age 60, who are laid off during an economic downturn, 5-years later are in the retirement age, and drop off the unemployment rate, even though nothing improved. Suddenly magically, the unemployed drop by 30,000 people.
Then you have other things, like family business. Down the street where I live, is a family restaurant. They have a dozen employees, and only 3 are paid. Everyone else is a family member. Everyone according to the survey is 'employed' even though, only 3 collect a paycheck.
Then some claim to be unemployed, even while they actually do black market work, to avoid taxes. Others want unemployment benefits, are unwilling to tell the truth, even to a survey which has no ability to tell Unemployment Comp, nor the police.
Another interesting problem, was the people who work for charity while they are unemployed. As long as they put in, if I remember right, 15 hours at the charity, they are counted as employed, even though they are earning nothing.
That's just a sample of the problems with the CPS, not including the issues with things like where they pick their samples. North Dakota is booming. Michigan is crashing. If the number of respondents from ND is high, and MI is low, unemployment just dropped magically. If the number of respondents from ND is low, and MI is high, magically unemployment just went up.
And then you have the weighted responses. Weighting the responses is that in the data, you give a higher priority to one response, over another response. So response X is considered highly important, while response Y is considered not so important. While the other aspects of the survey are fairly straight forward, the weighting system wasn't explained as well, at least not with what I read from the BLS web site.
Conclusion...
I have two main takeaways from all of this.
First, I have a huge problem with the blind acceptance of government statistics as divinely inspired. They are most certainly not. Everything should be looked at, with a skeptical eye.
Second, I do not have any problem believing that unemployment has in fact fallen. What I do have a problem with, is giving credit to a particular individual for it either it going up, or it going down.
Obama is not responsible for unemployment falling, than Bush is of it going up.
The reality is, the policies that directly caused the sub-prime melt down, were put in place before Obama, or Bush, was ever in office.
In fact, the only policy that Bush is responsible for, that did create some amount of unemployment, was the raising of the minimum wage. I do blame him for that. The problem there is, the left is complaining about Bush increasing unemployment, while at the same time pushing the very policy he pushed, that caused higher unemployment.
