Unemployment and Statistics (Nothing to Do With The Bakken)

A senior writer for CNN writes today: "By historical standards, the labor market is recovering nicely."

That was the opening paragraph. The headline: "Jobs Recovery is Stronger Than Past Recessions."

Talk about misleading. This has to be a press release written by the administration.

This is a great example of playing with statistics.

This is how the writer can state the jobs recovery is stronger than in the past. In October, 2009, unemployment was 10.1%. Last month, the unemployment rate had dropped to 9.5%. And that leads the writer and the headline writer to say that "the labor market is recovering nicely." Wow, talk about rose-colored glasses. I am an eternal optimist but even I can't make that stretch.

On the other hand, the country continued to lose jobs for eleven months following the end of the 1990-1991 recession; and, "everyone" agrees that the jobless recovery following the 2001 recession lasted nearly two years after the end of that recession.

The difference is that the current recession has resulted in an unprecedented loss of jobs. There have been 8.4 million jobs lost in this recession and although there has been job growth, it is statistically insignificant. With the current pace of hiring, it will take us a minimum of three years to get back to where we started at the beginning of the downturn, and there are indications that hiring may have slowed down. We will know more tomorrow.

So, yes, technically, one can argue that job growth has been faster in this recession than in two previous recessions, but when seven (7) percent of workers lost their jobs, it would only make sense that there is a larger pool of unemployed eager to get back to work, and thus a statistically "better" jobs recovery than previously but raw numbers suggest otherwise.

Personally, when 8.4 million folks lose their jobs, I don't see a whole of difference between 10.1% unemployment and 9.5% unemployment, especially when one understands that those folks who have quit looking for work are no longer counted among the unemployed. With an economy this bad that has resulted in 10% unemployment, many have simply quit looking.

My rant for the day.