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Thread: Validity of gov't unemployment statistics ...

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    Default Validity of gov't unemployment statistics ...

    I ran across this 'explanation' of how the BLS actually compiles unemployment statistics ...

    "(snip)One would think an accurate count of unemployed could come from 350,000-plus workers per week who file new jobless claims, but that is not how the government counts the tiny fraction of workers who lose their jobs.

    If you got to John's grocery story on Main Street and count his red apples for sale, and assume he alone represents quantity and price of apples across all grocery stores in the state...that is the method used by The Bureau of Labor Statistics at present.

    Have you been called by the Bureau for its monthly survey? Statistically speaking we should all receive a call from them at some point. Don't hold your breath. But aside from the survey, there are ways to make the unemployed picture look better than it actually is given the pool of unemployed logged by BLS computer systems, and collected through benefit notification and IRS data records. The numbers could be skewed in favor of the White House just as in the example ahead.

    Simple formula to understand unemployment rate calculation:

    Let us use simple terms -- for this example 10 weeks of employment benefits -- statistically it does not matter how many weeks benefits are given. We've used the same data from the Bureau of Labor Statistics (BLS) to re-introduce professionals into the workforce; with equally shorter time to compensate for lost benefits.

    With a group of 100 professional men and women (non-farm labor,) working for a variety of different corporations, at the first of month No. 1, 4 percent of these professionals are cut. With 96 people employed, 4 people are on unemployment benefits for the next 10 weeks. And our unemployment rate is 4 percent.

    At the first of month No.2, two more people are laid off... six people are on unemployment benefits for the next 10 weeks, and six weeks respectively. While 94 people are employed the unemployment rate has risen to 6 percent.

    Month No.3, four of our original 100 lose their benefits, so, 96 people are counted in the pool. Three people are laid off and our total of unemployed professionals stands at five, but the unemployment rate has dropped from month No.2, to 5 percent without anyone having found a new job.

    Month No.4; great news two people have found jobs (one from month No.2,) two people are laid off, but we have a second readjustment to the number of employed, because only the two hired now count. With 95 people in the pool, our unemployment rate holds steady at 5 percent.

    Month No.5; more great news two people found jobs! One person fell off the benefits, three people are laid off and now, we only have 94 people to measure. The unemployment rate holds steady at 5 percent.

    Month No. 6, no new jobs this month with our 94 people. Two people were laid off. We loose two people on benefits. We have five people on benefits in total, and now with only 92 people to measure, our unemployment rates holds at 5 percent.

    Month No. 7; excellent news two people were hired this month! Three were laid off. Four people live on benefits and one person fell off. And our unemployment rate has fallen to 4 percent while the number of people on benefits is at the lowest in six months.

    With a 4 percent unemployment rate, anyone could claim this is super news. Except an important factor misses the equation. Our total of employed professionals from the original 100 has dropped to 88. Four live on benefits and from the original 100 people, the actual unemployment rate is 12 percent.... or three times greater than month No.7 shows.

    While this example must not be taken to mean the BLS statistics should be multiplied by three, this model simply uses numbers to understand how the rate may appear positive, when in fact it does not provide an accurate picture of trends.

    According to the Los Angeles Times, the true number of unemployed in the United States tops 16 million at the end of 2003. The number of professionals in part-time or freelance work while waiting-out their job hunt is 4.9 million, and 1.5 million professionals seek jobs due to imminent layoffs, added too 9 million already unemployed -- the US-unemployment is the highest in 20 years. The actual percentage of "unemployed" in the United States is 9.7 percent, up .3 percent from 2002. "(snip)

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    Default Re: Validity of gov't unemployment statistics ...

    If oil really goes up due to instability, GM and Ford will be in big trouble. I'm going to bet on Ford, not because their cars are better, but because their management is better.
    If the Ford family supports the company with money they will pull out, always the advantage of a partial family owned company over an amorpous corporation like GM.
    However the Ford and GM layoffs will really hurt. When one goes BK (say GM)
    the cutoff of health benefits to 3,000,000 retirees and loss of pensions and reduction in
    401k balances will really hurt the bigger US economy. This will have a ripple effect to all
    small supply companies that sell to GM. (and Ford)

    While Chrysler management, design and quality is excellent, they also are not very innovative on replacing gasoline and petro products in their engines with electricty or something else. While I don't believe in the "something else" I do think ethanol will
    help stretch gasoline or diesel supplies.

    The point? The social disruption caused by looming geo political and economic macro events
    caused by yet another "unforseen event" (In this case economic cutoffs and reductions
    of petro not terrorist action) will make the amount of people hurting on lowered wages
    quite visible and show that the stats aren't reliable. Or at least that the stats
    are bureacratic accounting procedure creations that do not tell the picture in the real world.

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    Default Re: Validity of gov't unemployment statistics ...

    Quote Originally Posted by Melonie
    According to the Los Angeles Times, the true number of unemployed in the United States tops 16 million at the end of 2003. The number of professionals in part-time or freelance work while waiting-out their job hunt is 4.9 million, and 1.5 million professionals seek jobs due to imminent layoffs, added too 9 million already unemployed -- the US-unemployment is the highest in 20 years. The actual percentage of "unemployed" in the United States is 9.7 percent, up .3 percent from 2002.
    And where did these numbers come from?

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    Default Re: Validity of gov't unemployment statistics ...

    Quote Originally Posted by lunchbox
    And where did these numbers come from?
    I believe that the 'source' of these alternate unemployment numbers involved the LA Times applying the 'European' unemployment methodology and formula to US unemployment statistics ... which the same link included in a table :

    "2003 Unemployment Rates by Country: U.S. rate includes those off unemployment benefits, which is how E.U. countries measure their true unemployment.

    * United States 9.7 percent
    * France 9.6 percent
    * Germany 9.3 percent
    * European Union 8.8 percent
    * Italy 8.5 percent
    * Canada 7.6 percent
    * Japan 5.2 percent
    * United Kingdom 4.9 percent
    "

    The point? The social disruption caused by looming geo political and economic macro events caused by yet another "unforseen event" (In this case economic cutoffs and reductions of petro not terrorist action) will make the amount of people hurting on lowered wages quite visible and show that the stats aren't reliable. Or at least that the stats are bureacratic accounting procedure creations that do not tell the picture in the real world.
    This has been a suspicion of the 'tin foil hat' crowd all along, myself included ! BTW the reference to the 'tin foil hats' involves some past history here in DD, wherein certain posters attempted to totally dismiss some 'other than mainstream' opinions outright, on the basis that anybody who really gives such opinions serious consideration must also be wearing a 'tin foil hat' (and all that implies). I now use the phrase as a 'heads-up' warning that an 'other than mainstream' article / opinion / statistic is about to be posted.

    As far as my personal opinion re gov't stats, I do believe that they accurately reflect a digestion of the best available data given a certain methodology and formula. In other words my personal opinion is that the various gov't agencies are not outright 'lying' to anyone. However, as you also point out, my personal opinion is that the normally unpublished official methodology used to arrive at such statistics as unemployment, CPI, 'Core' CPI and numerous others often produces results which are 'misleading' in comparison to the basic methodology assumptions that most Americans tend to apply to those numbers.

    In other words, most Americans assume that the US unemployment statistic includes ALL unemployed Americans, which is not the case under the actual methodology used which 'forgets about' unemployed Americans whose unemployment benefits have expired. Most Americans have no concept whatsoever regarding what hedonic adjustments, substitutions or deflators are, or how they are applied to the various CPI's. However, besides the 'tin foil hat' crowd, some extremely well respected financial gurus have analyzed their effects versus the assumptions most Americans make in regard to what the CPI is actually composed of.





    quote from no less a personage than King of Bonds Bill Gross at the above link :

    (snip)"No I cannot sit quietly on this one, nor as I’ve mentioned, have other notables in the past few years. The CPI as calculated may not be a conspiracy but it’s definitely a con job foisted on an unwitting public by government officials who choose to look the other way or who convince themselves that they are fostering some logical adjustment in a New Age Economy dependent on the markets and not the marketplace for its survival. If the CPI is so low and therefore real wages in the black, tell me why U.S. consumers are resorting to hundreds of billions in home equity takeouts to keep consumption above the line. If real GDP growth is so high, tell me why this economy hasn’t created any jobs over the past four years. High productivity? Nonsense, in part – statistical, hedonically created nonsense. My sense is that the CPI is really 1% higher than official figures and that real GDP is 1% less. You are witnessing a “haute con job” and one day those gorgeous statistics just like those gorgeous models, will lose their makeup, add a few pounds and wind up resembling a middle-aged Mom in a cotton skirt with better things to do than to chase the latest fad or ephemeral fashion."
    ~
    Last edited by Melonie; 02-06-2006 at 03:32 PM.

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    Default Re: Validity of gov't unemployment statistics ...

    Melonie. I have told you before. Thye following statement is FALSE
    In other words, most Americans assume that the US unemployment statistic includes ALL unemployed Americans, which is not the case under the actual methodology used which 'forgets about' unemployed Americans whose unemployment benefits have expired.
    The unemployment number bear no relation to the absence or presence of unemployment benefits. UI is irrelevant to employment status, other than the fact that if you are getting UI, you are either either unemployed or committing fraud.

    UI claims has no direct relationship with actual unemployment since a sizeable fraction of people filing a claim never collect a dime. You have to be unemployed for 2 weeks to collect a check, and the clock starts running the day you file. Also in most states with auto plants, you can file for unemployment the day your model-year changeover summer vacation starts and collect a weeks unemployment befoe you go back to work at the same factory you considered yourself employed at for 40 years.

    The author of the original work uses a model of unemployment at radical odds with the real world. 2% of the workforce quits their jobs each month. (source JOLTS, which Melonie referred to in an earlier post). 60,000 Government employees get laid off EACH MONTH! That is 0.6% of the government workforce. Guess who it is? School bus drivers in NYC and cafeteria workers who technically get laid off when the winter break starts, and they do not go into work Monday, plus lifeguards whose job ends when the pool closes labor Day. 4.5% of the leisure and hospitality industry workers quit every month. Where? McDonalds workers who get a job at the grocery store down the street and do not have to wear silly clothes and wear dumb uniforms.

    The houshold employment survey is far from an ideal vehicle, but it is essentially the same thing today as 5,10,20,....55 years ago. It measures people who are working or looking, not "would like" a job, or want a better job, or want more money for their job. If you measured the way the author propses, unemployment would always be higher. Hell, I would love a job with Bill Gates income and a part-time schoolbus driver's hours. the author wants to put all people who are self employed as unemployed. They may not be optimally employed, but they have jobs doing stuff people find valuable enough to pay for. A person can be employed and hate theri job, but one cannot measure tightness of the job market off of a one-shot "take this job and shove it" philosophy.

    The unemployement rate is a measurement of what it asks, not what people believe they want it to ask during this administration, but not change the record of the 1990s when the other party held the White House.

    IS it a perfect measure? Of course not. If I controlled it it would be a larger sample, and you all would have to pay higher taxes to pay for it. I would also distinquish more between casual employees and those in the market for full-time permanent jobs. In a decade that data would be useful. As it is, it is a known-imperfect measure, just like an IQ or SAT score is a known imperfect measure of intelligence and educational achievement. Because it has been done roughly the same way for 60 years, it is a relative guage. If you all want to pay 5 times as much far a number that is 1.5 percentage points higher, feel free--just leave the same-old crap until we have 50 years of history to learn its flaws, too.

    Why are consumers taking our hoem equity loans. real simple. They want it NOW, and think they can pay for it later. Most can.

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    Default Re: Validity of gov't unemployment statistics ...

    Quote Originally Posted by Melonie
    I believe that the 'source' of these alternate unemployment numbers involved the LA Times applying the 'European' unemployment methodology and formula to US unemployment statistics ... which the same link included in a table :

    "2003 Unemployment Rates by Country: U.S. rate includes those off unemployment benefits, which is how E.U. countries measure their true unemployment.

    * United States 9.7 percent
    * France 9.6 percent
    * Germany 9.3 percent
    * European Union 8.8 percent
    * Italy 8.5 percent
    * Canada 7.6 percent
    * Japan 5.2 percent
    * United Kingdom 4.9 percent
    "
    Mel, one should be suspect of numbers simply stated in articles questioning the tabulation of others. The link to the latimes just points to their mainpage.

    This has been a suspicion of the 'tin foil hat' crowd all along, myself included !
    Do you hear what you are saying?

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    Default Re: Validity of gov't unemployment statistics ...

    I have only drawn unemployment benefits once in my life so I am by no means any kind of "expert" but I have always understood that, like Melonie said the goverments unemployment % was driven by the number of new claims, but mostly by the number of people drawing benefits and that when you do exhaust your benefits you drop off into this limbo where you don't have job but as far as the goverment is concerned you are no longer "unemployed"

    Over the years I have heard more than a few "experts" on CNN, CNBC etc. talk about this "problem" and state that at any one time,depending on how the economy is doing that there are millions of people that don't have a job but "no longer count"

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    Default Re: Validity of gov't unemployment statistics ...

    Melonie. I have told you before. Thye following statement is FALSE
    Well, it is equally arguable that the statement is true, since actual verification of how most Americans 'interpret' the UI would require polling Americans with greater accuracy than the BLS poll used in the UI sample. At any rate, there is absolutely no question that people in other countries 'interpret' the American UI to represent something other than it actually does, because their own UI formulas do measure long-term unemployed which the American formula does not.

    Mel, one should be suspect of numbers simply stated in articles questioning the tabulation of others.
    the european vs american unemployment chart calculated using the same european methodology in all cases, which I directly cut and pasted from the link page right side box, is independently verifiable. In fact, detractors of the GWB administration have been very vocal in doing so ...

    Now I certainly don't want to turn political here, but when you have conservative Bill Gross and liberal Colman both saying essentially the same comments about the 'distortions' of US gov't statistics, you certainly have to consider the possibility that both are telling the truth !

    Again, my point is only that American UI, CPI etc. do not actually represent what most Americans are allowed to assume that they do represent.
    Last edited by Melonie; 02-07-2006 at 05:43 AM.

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    Default Re: Validity of gov't unemployment statistics ...

    Well, it is equally arguable that the statement is true, since actual verification of how most Americans 'interpret' the UI would require polling Americans with greater accuracy than the BLS poll used in the UI sample. At any rate, there is absolutely no question that people in other countries 'interpret' the American UI to represent something other than it actually does, because their own UI formulas do measure long-term unemployed which the American formula does not
    I am sorry Melonie, but a fact is a fact, regardless of how anyone in a foreign country. or you, interprets it. Want to read how they do it. It is all explained at http://stats.bls.gov/cps/cps_htgm.htm
    and in gorey detail in the BLS Handbook of methods. A lie is not arguably the truth! There is no argument about it, it just is not so.

    The BLS sample size is 60,000 (a statistically Very LArge sample) or more than 20 times the number polled in any political poll you ever saw on TV. It takes 1,500 people to do the survey and if they cost the government $75K total compensation cost $112.5 million in payroll. If you increased the sample size 10 fold you might get a number 0.1-0.2 percentage point different (with no known direction to the change up or down, and in all likeliehood almost identical), but it would cost you over a billion dollars EACH YEAR more. That is $3.21 per person in the United states to make a token improvement in the one calculation- and it would still be imperfect.

    It is what it is, with no regard to what anyone thinks it is.

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    Default Re: Validity of gov't unemployment statistics ...

    Quote Originally Posted by montythegeek
    I am sorry Melonie, but a fact is a fact, regardless of how anyone in a foreign country. or you, interprets it. Want to read how they do it. It is all explained at http://stats.bls.gov/cps/cps_htgm.htm
    and in gorey detail in the BLS Handbook of methods. A lie is not arguably the truth! There is no argument about it, it just is not so.
    This is why I can't understand what the 'tin foil hat' crowd has been suspicious of, if anything they should be suspicious of the data collected/used to do the calculations.

    Mel you're second link (to dailykos) contains a different set of opinions, while it has interesting arguments, it doesn't support your first article.

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    Default Re: Validity of gov't unemployment statistics ...

    The unemployement rate is a measurement of what it asks, not what people believe they want it to ask during this administration, but not change the record of the 1990s when the other party held the White House.
    a lie is not arguably the truth! There is no argument about it, it just is not so.

    Good points (as usual) made by Monty.

    Also just in case it has not been mention yet , people who choose not to collect unemployment and those whose unemployments has run out are also not counted as unemployed. At least that is my understanding of things anyway.
    Monty please do correct me if I have that wrong.

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    Default Re: Validity of gov't unemployment statistics ...

    I am sorry Melonie, but a fact is a fact, regardless of how anyone in a foreign country. or you, interprets it. Want to read how they do it. It is all explained at
    and in gorey detail in the BLS Handbook of methods. A lie is not arguably the truth! There is no argument about it, it just is not so.
    Again you're attempting to side-step the larger point by arguing over minutiae. Most Americans do NOT take the time to wade through the BLS handbook of methods to determine exactly what is and is not being included in the BLS statistic for US unemployment, any more than most Americans NOT making the effort to research hedonic adjustments, substitutions etc. being implemented in calculating the CPI statstics. Therefore the arguable point is that most Americans assume that the BLS unemployment number has some reasonable correlation to the actual number of unemployed Americans, as well as most Americans assuming that the CPI number has some reasonable correlation to their actual cost of living - and not that the US govt's source data or calculations are technically in error.

    The FACT is that the official US unemployment statistic and the european unemployment statistics have significant differences in methodology, with the US statistic 'excluding' significant numbers of Americans who do not have jobs from their criteria of 'unemploment' (which european unemployment statistics 'include'). If there's any 'lie' involved it is a statistic which purports that US unemployment is 3-4% lower than european unemployment, as comparing the official unemployment statistics of the USA versus European countries tends to indicate on first glance. The consequence of this first glance comparison is an impression that the US economy is doing significantly better than european economies. The further consequence for investors is that 'joe sixpack' will likely continue to invest in American stock markets versus european stock markets based on an arguably false premise.

    Mel you're second link (to dailykos) contains a different set of opinions, while it has interesting arguments, it doesn't support your first article
    Well it certainly supports the larger observation that there are many well known voices out there with all sorts of political leanings who are all questioning the 'real world' relevance of official US statistics. And as Bill Gross would certainly affirm, smart investment decisions depend on a 'realistic' understanding of actual economic conditions, something which is likely to not be found in official US statistics alone.

    ~
    Last edited by Melonie; 02-07-2006 at 11:05 AM.

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    Default Re: Validity of gov't unemployment statistics ...

    If we start ot have groups of 1930's hobos and "Hooverville" shanty towns springing up, this would be the visual indication that something is wrong with the "buro speak"
    formula calculations of the present numbers.

    Here's the scenario. Oil prices rise above $3.00 a gal and stay there through summer
    and up to Dec. 2006. GM sales really tank. Ford, GM, Kraft worker layoffs start.

    US dollars goes down due to countries not paying oil bills in dollars. Inflation goes up.
    Long term rates finally notice the inverted yield curbe and that the inflation is not
    temporary and stop believing the "core" rates of inflation apologists.

    ARM rates are adjusted upward along with credit card rates. (Have to support the dollar).
    The Home equity mortgage refinance merry go round slows down to 10 rpms from the present 500 rpm speed. Housing prices slow down their rate of increase.

    A few go-go, ill underwritten ,CMBS bond packages on Wall Street blow through their
    debt service reserves and the law of large numbers fails as a package with really big bad numbers defaults. (I admit that a CMBS package has never defaulted, but the market is only about 15 years experience in mass packaging backing the bonds so in invesgtment experience terms that is not a long time.) Office building vacancies get worse. (part of cmbs bonds) Retail vacancies in barley function regional malls go up and the malls fail.
    Walmart kills more regional grocery chains and small shopping center strip tenants.
    Industrial warehouse makret tanks (fairly strong market right now actually in certain areas)becomes a talking point absolute.

    Middle class income is squeezed or declines due to new jobs paying less, less work hours offered. Debt amounts and debt service go up due to rising rates and desperation to keep pulling money out of housing. Nasty fraudluent lenders take away peoples houses who are suckered into the bad loan ARMS. Energy prices go up and stay there. Then Venezula
    withholds gas. Iran withholds gas. The US army remains unable to bring Irag oil on line
    (because there aren't enough US army troops and civil affairs engineer troops), Nigeria
    descends into civil war cutting oil, and the rest of the Muslims go nuts over the
    dubious Mohamed cartoon issue. (Europe freaks out, but of course this would be a good thing to wake them up over there.)

    Note to Russia people: Should be a good time to go back to Russia if the violence and corruption can be cleaned up as Russia will be a real oil powerhouse in this scenario.
    If you can get a visa to visit your homeland look around. Make sure you can get back to the US before you go, because things can change quickly over there. Might be ten years too early in this scenario but you should think about the positive changes in Russia.

    The point. (Stand by while I put on my tin foil hat. I know it's here somewhere.)

    Numbers do not always tell the story. That's why we have eyes, words, and experience.
    Number reporting lags events, sometimes by quite a bit.

    I wonder what the numbers said about the US economy in 1929, 1930, and 1931?

    The newspaper headlines from the Wall Street Journal of that era said that "Prosperity was just around the corner."

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    Default Re: Validity of gov't unemployment statistics ...

    Quote Originally Posted by Melonie
    Well it certainly supports the larger observation that there are many well known voices out there with all sorts of political leanings who are all questioning the 'real world' relevance of official US statistics. And as Bill Gross would certainly affirm, smart investment decisions depend on a 'realistic' understanding of actual economic conditions, something which is likely to not be found in official US statistics alone.

    ~
    You have a very odd way of deviating from your own topics.

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    Default Re: Validity of gov't unemployment statistics ...

    I wonder what the numbers said about the US economy in 1929, 1930, and 1931?

    The newspaper headlines from the Wall Street Journal of that era said that "Prosperity was just around the corner."
    The modern version of that headline is the rightwing propaganda mantra of : "the economy is strong and getting stronger"

    One potential light at the end of this dark tunnel of republican leadership is the mid term elections. If Democrats are successful the country just may have a chance to rise again out the deep depths of debt that have resulted from the past 5 years of rightwing rule. If they don't , well then it is going to be a very long couple of years ahead.

    You have a very odd way of deviating from your own topics
    .

    That is pretty common when a person is proven to be incorrect but refuses to admit it. Another trait you'll notice is their need to ALWAYS have the last word
    Last edited by TarynJolie; 02-07-2006 at 01:46 PM.

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    Default Re: Validity of gov't unemployment statistics ...

    f we start ot have groups of 1930's hobos and "Hooverville" shanty towns springing up, this would be the visual indication that something is wrong with the "buro speak"
    formula calculations of the present numbers.
    Well I'm happy that at least one person seems to understand my basic point LOL. BTW none of those hobos and shantytown residents would be counted under current BLS methodology because their unemployment checks would have run out thus the BLS would have excluded them from the official Unemployment statistics !

    You have a very odd way of deviating from your own topics.
    I'm not following you. I posted the LA Times sample unemployment calculation in an attempt to illustrate that official gov't statistics don't always convey the 'real world' picture. Others argued that the LA Times numbers were suspect. I counter-posted that the origin of the alternate numbers is a large disparaty between the BLS unemployment methodology and the methodology used by european countries to report their unemployment. Others argued that the BLS statistics are fine, and implied that my 'tin foil hat' was leaking alien waves again. I counter-posted that prominent financial personalities on both ends of the US political spectrum also have raised the point about official US statistics having significant discrepancies from 'real world' conditions that they are arguably intended to measure.

    In the final analysis, the one applicable point of this whole thread was beautifully summed up by Niceguy ... (paraphrasing) use your own brain, use your own eyes, use your own experience when making investment decisions, and do not blindly accept gov't statistics at face value when making those investment decisions.

    If Democrats are successful the country just may have a chance to rise again out the deep depths of debt that have resulted from the past 5 years of rightwing rule. If they don't , well then it is going to be a very long couple of years ahead.
    I've tried like crazy to avoid politicizing this thread ... however you might want to factor in the probable 'real world' effects of a Democratic personal and business tax increase in the midst of Niceguy's scenario ... i.e. turning a recession into a full blown depression by the gov't reducing individual take-home pay as well as business profits when the 'velocity of money' is already slowing alarmingly, durable goods purchases are already slowing alarmingly, and 'non-core' but very necessary expenditures like food and energy are rising alarmingly. Granted that a tax increase would prop up the exchange rate of the US dollar, but that doesn't matter much if nobody in America has dollars to spend on anything but basic necessities. I'm also quite confident that the official BLS unemployment numbers would remain comparatively low throughout.

    ~
    Last edited by Melonie; 02-07-2006 at 01:35 PM.

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    Default Re: Validity of gov't unemployment statistics ...

    We can't use a term coined in 1930 (no matter how appropriate or accurate)to describe homeless people who have lost theirr jobs, houses,and are living in wooden crates and shacks. So "Hooverville" is out. Most of you here probably don't even know what a Hooverville is or who is Hoover?

    A new term is needed. I suggest the following. "Bush towns." Bushtowns.
    Waddya think?

  18. #18
    God/dess montythegeek's Avatar
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    Default Re: Validity of gov't unemployment statistics ...

    Well I'm happy that at least one person seems to understand my basic point LOL. BTW none of those hobos and shantytown residents would be counted under current BLS methodology because their unemployment checks would have run out thus the BLS would have excluded them from the official Unemployment statistics !
    Melonie, again why with the aboslute LIE. I gave you the link to the BLS description of the methodology and you persist in posting blatant falsehoods, then accuse me of missing your larger point--a derived preemise from untrue assumptions.. I believe your tinfoil hat has shrunk somehow and is affecting blood flow to the brain.

    Your premise is that all of the world are fools, and no one recognizes your "truth". Did you know that according to the ILO standards used by most European countries that there would be fewer people counted in the labor force AND fewer people counted as unemployed because the respondents had to have actively sought work in the past 4 weeks? No you did not, because you read some idiot's lie on some doomsday way site and fell for it hook, line, and sinker.

    You want the price measure to show more inflation. Guess what, that means that since 1980, gold's "real" price has fallen even faster, making it a worse investment.

    For the record, there are no official unemployment statistics for the depression era, they were not calculated until 1939. Some have been estimated at 30%+, but they were not done by sampling or any real nationwide count.

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    Default Re: Validity of gov't unemployment statistics ...

    The present government numbers may be accurately collected, but the mathematical models and formulas to calculate them may never have been a correct model to report lack of work and total amount of people out of work. Basically they are a mathematical model or limited computer program to achieve a result that is constrained by the model.

    Models that do not report what people need to know, are useless. Here’s the questions.
    Do the present BLS accurately report the amount of people in this country out of work who no longer have jobs? The answer is no. Do the present CPI numbers accurately report the increases in prices that everyday people have to pay everyday to live? The answer is no. There are all sorts of economics debates on why the numbers are what they are, and all sorts of compromises to get the formulas to calculate where they are.

    Now, however, the result is not correctly modeling reality. The gap between what the numbers say, and what middle class (and lower class) people see with their own eyes and experiences is growing wider. This will create an “unreality gap” and already has.
    The “non-reality gap” will just grown larger.

    I’m taking off my tin foil hat right now and setting it aside.

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    Default Re: Validity of gov't unemployment statistics ...

    Well shit, I didn't know you could simply say "the answer is no" and prove a point.

    The unemployment numbers are tabulated, not calculated. It's a report of a sampling. You can try to apply models to predict where it will go, however it is what it is. I would say while it's not exact, it's a pretty good representation do to the sampling size. Why? Becasue it doesn't have any huge oddball months where it shifts a 20-30% for no known reason.

    The only gap I care about is the one I learned from David Sklansky.
    Last edited by lunchbox; 02-08-2006 at 09:49 AM. Reason: can't say first off all when you only say one thing.

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    Veteran Member TarynJolie's Avatar
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    Default Re: Validity of gov't unemployment statistics ...

    again why with the aboslute LIE. I gave you the link to the BLS description of the methodology and you persist in posting blatant falsehoods, then accuse me of missing your larger point--a derived preemise from untrue assumptions..
    There is a simple answer to your question , Monty. People do that when they are unable to admit when they are incorrect. As I said a few posts back, they also ALWAYS have to have the last word. Just wait and see what happens in responce to your last set of comments

    A quick on topic question for you though. Was I correct in saying that those out of work people who choose not to collect unemployment and those whose unemployments has run out are also not counted as unemployed ?

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    Default Re: Validity of gov't unemployment statistics ...

    Quote Originally Posted by TarynJolie
    A quick on topic question for you though. Was I correct in saying that those out of work people who choose not to collect unemployment and those whose unemployments has run out are also not counted as unemployed ?
    That is incorrect. Monty explained the unemployment rate is determined by a sampling of 60k people.

    Maybe it is worth noting that unemployment claims are tracked, and are usually reported/presented in the media at the same time.

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    Default Re: Validity of gov't unemployment statistics ...

    Ok, thanks.

    I know I have heard or read something about those situations in relation to the unemployment rate. Can someone explain to me how those folks figure into unemployment figures.

    Much appreciated !

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    Default Re: Validity of gov't unemployment statistics ...

    Models that do not report what people need to know, are useless. Here’s the questions.

    Do the present BLS accurately report the amount of people in this country out of work who no longer have jobs? The answer is no. Do the present CPI numbers accurately report the increases in prices that everyday people have to pay everyday to live? The answer is no. There are all sorts of economics debates on why the numbers are what they are, and all sorts of compromises to get the formulas to calculate where they are.

    Now, however, the result is not correctly modeling reality. The gap between what the numbers say, and what middle class (and lower class) people see with their own eyes and experiences is growing wider. This will create an “unreality gap” and already has.
    The “non-reality gap” will just grown larger.

    I’m taking off my tin foil hat right now and setting it aside.
    Well I might as well leave mine on, as it won't affect the 'unreality gap' of this thread.

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    Default Re: Validity of gov't unemployment statistics ...

    The total amount of people out of work aren't counted. They are instead explained away on why they are not counted. This is a fact. Further, this is wrong. From a reporting sense it is wrong. If it is true that the major product of China is to export deflation, the fall in
    employed wages of those who get new jobs at lower rates would help to expalin why the CPI is low. Aren't wages a major component in CPI?

    To me the unemployment numbers being based on correct gathering, but incorrect processing of the data is quite clear. I'll admit that the CPI is a more murky subject.

    So both of you have absolute confidence in the BLS unemployment numbers and the
    CPI numbers processed and published by the US government as accurately reporting the
    economic picture of the US?

    If you think the method and end result numbers are right on, you will never be convinced.
    As the year progresses, look around the country and see if you remain convinced.

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