Unemployment Rate Drops? Really? More Like Games Being Played!

President Obama is desperate. After his stimulus debacle that was supposed to keep unemployment below 8% didn’t, he and his administration know that the public is watching unemployment numbers with a critical eye and judging him on it.

This week’s government report claims that unemployment dropped, again, to 8.9% from 9.0% last month and 9.8% in November. However other sources, such as Gallup, are telling a different story. While the federal government is claiming unemployment is on the decrease, Gallup’s latest poll for February has the statistic going in the other direction. According to Gallup unemployment is up to 10.3%.

So what is really going on here? Well, a simple look at the numbers reported by the government shows a little bit of potential manipulation going on here.

Let’s look.

Here are the unemployment numbers in the United States since January 2001 (when President George W. Bush was sworn in as President) as reported by the Bureau of Labor Statistics:

U.S. Unemployment Rate January 2001 - February 2011

Now here is a look the number of jobs reported by the Bureau of Labor Statistics over this same time frame:

Employment Levels January 2001 - February 2011

Now how do we use these two sets of numbers?  The math is pretty simple.  The total available workforce, those employed + those looking for work is calculated by the following formula.

Total Available Workforce = Employment Level / (1 – % Unemployed)

The value of (1 – % Unemployed) is the employment percentage.  By dividing the employment level by this number we get the size of the available workforce.

Here are those numbers, calculated by myself, using that formula.

Total Available Workforce in the United States January 2001 - February 2011

While this might not show us a whole lot, graphing the data gives us a better representation of what this data shows.  Here is the graph:

Total Available Workforce in the United States January 2001 - February 2011

Now we see something very tricky.  The pink series shows how the labor force grew during the Presidency of George W. Bush along with a Republican controlled Congress.  The yellow series extends the data to the complete Presidency of George W. Bush with the Democrat controlled Congress.   The dark blue data illustrates the labor force under President Obama’s tenure with the Democrat controlled congress (and two months of the current Congress where Republicans control the House and Democrats control the Senate).

Two trend lines are also included which project the work force growth under President Bush out into the future.  The pink trend line shows the data projected from the data under President Bush and a Republican Congress.  The yellow trend line shows the data projected under President Bush’s complete Presidency.  Both these trend lines are within the margin of error of each other.

What we see from this data however is that from the moment President Obama took office, the labor force (total workers in the United States) flattened out.  This is quite remarkable considering that the population of the United States has continued to grow over that same time frame.

If we look at the trending data we see that in actuality the total available workforce should be around 158 million today.  The February employment levels reported by the government were 139.573 million.  This means we can calculate the unemployment rate by these two numbers:

(158 / 139.573) – 1 = Unemployment Rate = 13.2%

Yeah, so forgive me if I don’t buy the whole 8.9% smoke the government is trying to blow up my rear end.  You cannot have a growing population, a flat employment curve and get the results the government is asking us to believe they are getting.  We can clearly see from the above data that this number is based on the wholly unrealistic claim that since President Obama ascended unto Washington the American labor force has not grown one bit.  It is the only way to get the unemployment rate to 8.9%.

You can make the statistics say whatever you want.  But the raw data doesn’t lie.