At first blush, it would seem that the drop below the 8% unemployment rate (7.8%) would indicate that crossing this barrier signaled “Happy days are here again.”
Nothing could be further from the truth. As I have contended in my columns for the past three years, the news headline unemployment rate reflects the up-down changes in the actively working population. But they had made no reference to America’s job-seeking potential that numbers 140 million plus. That’s when I unveiled the labor force participation rate, which projects those working full-time, as a percentage of those seeking such status.
Part-time, temporary workers are included positively in the Labor Department’s unemployment rate, giving that White House-controlled government agency the benefit of ignoring the increasing volume of part-timers, as well as those that have abandoned active job search. Since first quietly and inactively included in the welter of statistics emanating from the Labor Department, the labor force participation rate is now significantly reported monthly, even by the White House-dominated American media.
Its September 63.9% index crept 0.1% over the bottom number of a month before. This practically equates a similar index of 1981, which came at the end of the failed Carter Administration’s economic disaster, before the celebrated Reagan turnaround in 1982.
But even the vast majority of observers intensely interested in the machinations of economic changes continue to depend on “headline news,” issued by the Labor Department, and rely on monthly employment reports, usually issued on the Friday after the previous month’s close and view it as gospel. On that basis, the dip below 8% September unemployment could be considered as strong evidence of further good news ahead. However, this oversimplification is disputed by the labor force participation rate, an unchallengeable point of reliability.
What makes the more readily accepted unemployment rate index more easily understood by the masses questionable is that Friday’s unemployment information is the last one issued before the November 6 election. Knowing that the current Administration’s record of focusing on oversimplified statistics is looked for by the potential voting population, it’s up to the reader’s judgment to determine whether the Labor Department succumbed to the dictates of its boss in the White House, using this favorable index for political purposes.
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