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Presented without a lot of my personal commentary, because (based upon my past experience in this community, where I’ve reported upon others who've called into question the accuracy of the stats published by the Bureau of Labor Statistics) it’s very much a hot potato topic. That being said, this little column from today’s NY Post is pretty fascinating…

BLS number is BS
Rate’s closer to 11%, former insider insists
JOHN CRUDELE
NY Post
9:19 AM, July 18, 2013

Keith Hall believes the US economy is a lot sicker than the 7.6 percent unemployment rate would lead you to believe.

And he should know.

Hall was, from 2008 until last year, the guy in charge of Washington’s Bureau of Labor Statistics, the agency that compiles that rate.

“Right now [it’s] misleadingly low,” says Hall, who believes a truer reading of those now wanting a job but without one to be more than 10 percent.

The fly in the ointment is the BLS employment-to-population ratio, which is currently at 58.7 percent. “It’s lower than it was when the recession ended. I think that’s a remarkable statistic,” says Hall, a senior research fellow at the Mercatus Center at George Mason University in Fairfax, Va.

That level tells Hall the real unemployment rate is actually about 3 percentage points higher than the BLS number….

I strongly recommend a read of the entire column! (I will add that attributing the drop in the employment participation rate primarily to an aging baby boomer population has been, pretty much, disproved. The general consensus I've read among middle-of-the-road economists is that our aging population, at least at the moment, accounts for roughly a third of that statistical low.)

Readers should checkout Krugman on almost the exact same topic, via a post from his blog, just four days ago…

There Is No “True” Unemployment Rate
Paul Krugman
Conscience of a Liberal Blog, NY Times
July 14, 2013, 1:41 pm

In my last post I compared food stamp use with U6, a broad definition of unemployment — and I saw some commenters claiming that U6 is the “true” unemployment rate, even that I was for the first time admitting this fact.

Um, no. There is no “true” unemployment rate, just various indicators of the state of the labor market. Fortunately, these indicators pretty much move in tandem, so we’re not usually confused about whether the market is getting better or worse. But they do measure somewhat different things, and which one you want to look at depends on what questions you’re asking…

(Bold type is diarist’s emphasis.)

Yes, “Fortunately, these indicators pretty much move in tandem,” as Krugman notes it. But, that’s “the thing,” as former BLS’ Chief Hall tells us that’s not quite exactly what’s happening at the moment.

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Comment Preferences

  •  come on, Bob (2+ / 0-)
    Recommended by:
    FG, Mr MadAsHell

    the former insider is leaking to a trashy right wing rag.

    I doubt the truth because the truth teller is telling their truth to a not so trustworthy source.

    I sing praises in the church of nonsense, but in my heart I'm still an atheist, demanding sense of all things.

    by jbou on Thu Jul 18, 2013 at 03:07:30 PM PDT

    •  But, you knew that in the headline, didn't you? nt (3+ / 0-)

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Thu Jul 18, 2013 at 04:46:43 PM PDT

      [ Parent ]

      •  ok (0+ / 0-)

        but you still used the NY Post as a source and if you had seen someone use the NY Post as a source for a diary whose point you disagreed with you'd call that person out. I thought it was a given around here that the NY Post is not a reliable source for anything but right wing hot air.

        I sing praises in the church of nonsense, but in my heart I'm still an atheist, demanding sense of all things.

        by jbou on Thu Jul 18, 2013 at 04:54:42 PM PDT

        [ Parent ]

        •  What point is there to disagree with here? (5+ / 0-)

          Frankly, the NY Post columnist's words and opinions aren't really worthy of any significance in this story, IMHO. It's about what Hall's stating and what Krugman's stating. And, comparing the similarities and differences between the two of them. As far as I'm concerned, I really don't give a rat's ass what the NYP columnist thinks. All I really care about in that piece is what Hall's stating. And, there are some fairly interesting similarities between his thinking and what Krugman's stating.

          The Post is used as a "source," because that's the outlet in which Hall was quoted.

          Frankly, if you want to talk bias, I think it's more pertinent to note that Hall is currently working at George Mason University (one of the most rightwing colleges in the country, and a place heavily funded by the Koch bros.), and he started his tenture at the BLS under Bush.

          But, at the end of the day, AGAIN, there are some striking similarities, and some not-so-subtle differences between Krugman's commentary and Hall's quotes. That's what I find most interesting about it.

          The Post matter is really not even a tertiary concern to me, IMHO. But, those are my own opinions, and I'm certainly NOT going to impose them on others, contrary to the comments of a handful of my detractors in this community.

          "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

          by bobswern on Thu Jul 18, 2013 at 05:05:36 PM PDT

          [ Parent ]

  •  I smell an Issa investigation... (1+ / 0-)
    Recommended by:
    Farugia

    And I smell claims that Obama himself told this guy and the new guy to cook the UER.

    I also bet there will be nothing to this - the same formula used for decades is being used now, and if it's understated now, it has been for decades as well.  

    If you're not talking about what billionaire hedgefund bankster Peter G. Peterson is up to you're having the wrong conversations.

    by Jacoby Jonze on Thu Jul 18, 2013 at 03:36:42 PM PDT

  •  And the TRUTH is that the deceptively (9+ / 0-)

    low unemployment propaganda we've been foisted upon us--not only does not include those who've given up--but also it does NOT include:

    1. Independent Contractors.  They folks get NO unemployment benefits and yet this is the BIG trend to avoid paying any benefits whatsoever.

    2. Part-Time Workers/Under-employment. This, too, is the other BIG trend in employment.

    3. Substandard Wages.  I know of senior management at a division of Johnson & Johnson who were told they were fired but could reapply as entry level sales people if they wanted to.  Of course, this is on the eve of possibly getting retirement. Nice timing!

    Shameful!!! Criminal!!! And Despicable!!!

    Separation of Church and State AND Corporation

    by Einsteinia on Thu Jul 18, 2013 at 04:04:38 PM PDT

    •  Parts 2 & 3 are, of course, true ... (4+ / 0-)
      Recommended by:
      bobswern, brunoboy, Einsteinia, terabytes

      ...and a big problem.

      But independent contractors are counted (as an extrapolation of the 60,000 interviews the BLS does) each month. If they say they're employed or unemployed, they are counted that way. The fact they don't get unemployment benefits (true of a large portion of the jobless population) is rough on them and ought to be remedied, but it isn't part of the unemployment count.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Thu Jul 18, 2013 at 10:27:53 PM PDT

      [ Parent ]

  •  speaking of the employment population ratio... (5+ / 0-)

    here are the graphs and charts from the bls website which demonstrate again this month that there is no change in the dismal performance of the economy on obama's watch.  obama's adherence to simpson-bowles austerity despite the utter failure of diminishing debt to improve the economy continues to bear unpleasant fruit:

    emp-pop-grph-7-13

    emp-pop-chrt-7-13

    i'm part of the 99% - america's largest minority

    by joe shikspack on Thu Jul 18, 2013 at 04:16:08 PM PDT

    •  To be fair ... (0+ / 0-)

      your characterization of the "Obama watch" is unjust. First, the recession was very, very bad. Second, stimulus efforts were hampered by Congressional intransigence. Third, Congress has been the place where economic ideas go to die since January 2011 when Republicans took the House.

      What your chart actually demonstrates is that Obama was able to stanch the bleeding but was not allowed to stitch up the wound and start it on the way to healing.

      •  fair? (5+ / 0-)

        yes, the recession was very, very bad. it was largely caused by fraudulent transactions in the fire sector.  obama as president has entirely failed to prosecute these "savvy" criminals.   there is little disincentive for these rampant criminals to modify their behavior such that another similar event will not happen.

        it is true that congress has been less than helpful.  in point of fact, though, both congress and obama have adhered to a policy of deficit reduction and the future demolition of americans' earned social security and medicare benefits.  the conflict between congress and the president is not over the type of policy to be imposed, but how many trillions the policy must cut and how badly to screw the old, the poor and the infirm in the future.

        congress is not the place where economic ideas go to die.  both congress and the president have the same ideas.  congress is the place where the president's plans for process go to die.

        if obama had different ideas then he might be able to sell them to the american people who would be delighted to have jobs and a social safety net.  a plan that actually produced such a thing, rather than promising a slower decline would be wildly popular.

        i'm part of the 99% - america's largest minority

        by joe shikspack on Thu Jul 18, 2013 at 04:51:44 PM PDT

        [ Parent ]

      •  No, not really. (0+ / 0-)
        Second, stimulus efforts were hampered by Congressional intransigence
    •  What's interesting is the divergence between... (5+ / 0-)

      ...the most recent m-o-m changes in the U.3 vs. the U.6 indices, IMHO; and, both Hall and Krugman tacitly (and directly) acknowledging that the U.6 is a more accurate barometer of the jobs/jobless trend(s).

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Thu Jul 18, 2013 at 04:53:29 PM PDT

      [ Parent ]

      •  I consider U6 to be more accurate.. (4+ / 0-)

        I think the Clinton Administration changed it so discouraged workers aren't included?  

        I worry about this. Yes, the stock market has done well but this is because corporate profits are at record levels. They are at record levels because corporations have downsized, laid off workers, not so much because consumer demand is healthy

        If corporations goal is to maximize shareholder value, and they do so by laying off workers and investing in themselves and not in communities, then we are going to have a combination of inadequate consumer demand and excess capacity.

        Really, we are at a point where corporations goal to maximize shareholder value maximizes themselves at the expense of the population. This can't continue long term.

        As a member of Courtesy Kos, I am dedicated to civility and respect for all kossacks, regardless of their opinions, affiliations, or cliques.

        by joedemocrat on Thu Jul 18, 2013 at 05:06:40 PM PDT

        [ Parent ]

      •  Krugman and DeLong and Wray and even... (3+ / 0-)
        Recommended by:
        bobswern, Brian B, LeftHandedMan

        ...Barry Ritholtz have for years said that U6 was a better measure of the health of the labor segment of the economy. It was, by the way, repeated coverage of U6 here at Daily Kos that spread to traditional media that had not previously given it any attention.

        And, of course, Hall is late to party in pointing out the impact of the reduced emratio.

        The problem has been that too many have bought into the trope that the emratio is due almost entirely to baby boomer retirements. The Economic Policy Institute, not exactly radical economists, have blasted that position for years, pointing out that the emratio of the 25-54 population, prime working age, is abnormally low. And also, EPI has calculated, only about a third in the drop in emratio can be chalked up to baby boomer retirements. Eventually, of course, those retirements will have a huge impact, but they haven't yet.

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Thu Jul 18, 2013 at 10:37:27 PM PDT

        [ Parent ]

    •  You're missing a demographic transition (2+ / 0-)
      Recommended by:
      bobswern, brunoboy

      If you want a clear picture of the health of the labor market, you need to look at another series :

      LNS12300060 Employment-Population Ratio - 25-54 yrs. Seasonally adjusted

      It looks at the core working population and contrary to LNS1230000, it is insensitive to evolutions in the demographic make-up of the population. It's particularly relevant right now because of boomers retiring.

      The good news is that, compared to LNS1230000, LNS12300060 show a clear improvement in 2011-2012, which corresponds pretty well to the general perception that things sucked but were clearly on the mend last year.

      The bad news, it's barely budging right now, about +0.2% y/y since the beginning of 2013, which means that the recovery has essentially stalled. If that doesn't move up or, worse, goes in reverse between now and the end of the year, we are in for a nasty one.

      PS: I actually prefer to use the LNU02300060 series - Employment-Population Ratio - 25-54 yrs, Not seasonally adjusted - and use 12 months delta when looking for trends. But unadjusted data is an acquired taste.

      I deal in facts. My friends are few but fast.

      by Farugia on Thu Jul 18, 2013 at 08:15:30 PM PDT

      [ Parent ]

  •  Why promote this incompetent CT article? (0+ / 0-)

    Here's a little more from the article:

    That may be so, but the Fed, and particularly Chairman Ben Bernanke, are acting rather strange these days. One minute Bernanke is suggesting that his highly controversial and very dangerous money-printing operation, called quantitative easing, will be tapered off in the near future because the economy is doing better.

    The next minute Bernanke is talking about how QE will continue if the economy isn’t strong enough to stand on its own. The Fed chief often points to the housing and the stock markets as evidence of economic improvement, although those are nonsense indicators.
     

    Great, just great.  I guess the Fed is supposed to take sides and not take a balanced approach. And I love how housing and the stock markets are NOT evidence of economic improvement. So, the stock market is not a leading indicator of the economy's improvement? Gee, I guess all those investors are just a bunch of dumbasses. So too the management of oh, just about every public construction company, Home Depot, Lowe's, etc. who note the housing market improvement as an indicator of the overall improvement they are seeing.

    Oh, and my favorite part of the article:

    In a couple of weeks we’ll all be anxiously waiting for the BLS to tell us what the job market did in July. We might as well look for answers in the next must-read work of fiction to hit the bookstores.
    Just what we need, a link to an article that calls the BLS job reports a work of fiction.

    Yes, let's focus on the fact that many people are hurting, and the recovery is not producing either the quantity or quality jobs we need. No, let's not lower ourselves to a crappy NY Post CT hit job to do it.

    Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

    by absdoggy on Thu Jul 18, 2013 at 04:22:01 PM PDT

    •  im confused (3+ / 0-)
      Recommended by:
      bobswern, Sandino, Meteor Blades

      so now Keith Hall who ran the BLS for 4 year  under Obama,  is a Conspiracy nut?  really? So he doesnt know what he is talking about?  but you do?

      •  Mr. Hall didn't say these things at all (0+ / 0-)

        If you read the article, the ONLY thing that Keith Hall said in that article is that the regular U-3 unemployment rate of 7.6% doesn't reflect the full picture of  unemployment. As evidence of this, he notes the decline in the employment  - population ratio, and in his opinion the U-6 unemployment rate of around 14% is a better indicator of unemployment at this time.

        Fine, I agree with this.  But that takes up about 1/4 the article. The rest of the article has nothing to do with Mr. Hall's point, and makes a number of stupid assertions, including the ones I noted.

        Are you saying that Mr. Hall would agree with that last sentence, that the BLS report is a work of fiction?

        Did Mr. Hall say that the housing market and the stock market are "nonsense indicators"?

        Did Mr. Hall take Mr. Bernanke's comments as evidence that the Fed is acting strangely? Did Mr. Hall call the Fed's QE program very dangerous?

        This article is a NY Post right-wing hit job, nothing more.  It takes one relevant point of analysis from Mr. Hall and then adds to it a bunch of Republican talking points and ends with a CT assertion that the BLS jobs report for July will be nothing more than a piece of fiction.

        As I noted, I would urge that there are better ways to make the case about unemployment than this article.  

        Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

        by absdoggy on Fri Jul 19, 2013 at 06:40:31 AM PDT

        [ Parent ]

  •  I'm getting a kick out of reading the few... (5+ / 0-)

    ...comments in this post. It's interesting to see how many people are commenting (obviously) before reading (and understanding) BOTH the Post column and the Krugman piece. (I was unexpectedly pulled away from my computer for about 75 minutes, immediately after posting it.) I think I'm just gonna', as they say in the gambling world: "Let it ride."

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Thu Jul 18, 2013 at 04:42:19 PM PDT

  •  The drop in EPR. (2+ / 0-)
    Recommended by:
    bobswern, brunoboy

    What we're talking about here is a 4.5% drop in labor participation, which equates to about 7 million people. Here is what my research shows:

    One-third, about 2.3 million, are the first wave of retiring baby boomers.

    One-third, another 2.3 million, were laid off during the recession and are unable to get rehired. Some have started businesses. Some are working off-book. Some are still unemployed.

    One-sixth, about 1.15 million, is people returning to or entering college to seek new skills.

    One-sixth is people joining the disability rolls because they cannot find work as an older and/or disabled worker.

    •  Interesting, for sure... but, what about all... (4+ / 0-)

      ...those new folks simultaneously entering the job market during the period? Where do you account for them in your stats?

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Thu Jul 18, 2013 at 05:08:49 PM PDT

      [ Parent ]

      •  "new folks" = young people.... (4+ / 0-)

        ...entering the job market (during this period).

        "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

        by bobswern on Thu Jul 18, 2013 at 05:09:52 PM PDT

        [ Parent ]

      •  Most of the jobs created in the past 5 years ... (0+ / 0-)

        are either part-time, temporary, or low-wage jobs. I'd think many of those jobs were filled by new entrants to the labor force.

        •  actually... (5+ / 0-)

          there's been some reporting of the fact that entry-level jobs are being taken by desperate experienced workers who have been tossed out of work.

          here's an example typical of the reporting from the new york times:

          FORT LAUDERDALE, Fla. — This city has become a front line in a generational battle for jobs, as older workers increasingly compete against applicants in their 20s for positions at supermarkets, McDonald’s and dozens of other places. And older workers seem to be winning.

          With unemployment at a 26-year high and many older workers chasing entry-level jobs like those they held a half-century ago, 70 has become the new 20, as one economist put it.

          Millions of older Americans have delayed retirement because of plummeting 401(k)s, soaring health costs, a sense that Social Security benefits alone are too little to live on or all of the above. This delay, economists say, has made it harder for millions of young workers to climb onto the first rung or two of the career ladder, especially since many employers favor hiring applicants with a track record.

          i'm part of the 99% - america's largest minority

          by joe shikspack on Thu Jul 18, 2013 at 06:32:25 PM PDT

          [ Parent ]

          •  Yes, I posted something on that a few... (0+ / 0-)

            ...months ago.

            "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

            by bobswern on Thu Jul 18, 2013 at 07:15:06 PM PDT

            [ Parent ]

            •  No wonder people dislike you. (0+ / 0-)

              You asked a question that had nothing to do with my original comment and I hazarded a guess that new entrants are taking jobs below their education and skill level. Then I get jumped on for answering your off topic question.

              You really are a jerk. It's no wonder people dislike you and distrust your diaries. I never realized before what all the animosity was about. But now I know.

          •  Point being what? (0+ / 0-)

            New entrants to the job market are not being forced to take jobs below their education and skill levels? What exactly is the point of your comment? I don't get it.

        •  thanks for you research (1+ / 0-)
          Recommended by:
          Sandino

          but the article quotes Keith Hall who pretty much knows exactly what he is talking about.

    •  I agree with that analysis. But some folks... (1+ / 0-)
      Recommended by:
      bobswern

      ...who say that the emratio is not that big a deal argue that baby boomers make up half or even two-thirds of drop. No statistics back that up.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Thu Jul 18, 2013 at 10:44:26 PM PDT

      [ Parent ]

  •  Can you explain this? (1+ / 0-)
    Recommended by:
    bobswern
    The fly in the ointment is the BLS employment-to-population ratio, which is currently at 58.7 percent.
    Not economically, but what the BLS employment-to-population ratio is and how it is calculated? [roughly, not the MIT version]

    and then:

    “It’s lower than it was when the recession ended. I think that’s a remarkable statistic,”
    What does that mean?

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