by Ryan on February 4, 2011

in Blogs,Economy

Despite the inclement weather, the unemployment rate cheerily lowered from 9.4% in December to 9.0% in January!  Some are quite pleased and the lower number can only mean we’re moving in the right direction.  Right?

Unfortunately, no.  The figure being released is the “U3″ number which only counts those still looking for work who can’t find it.  The true unemployment figure (U6), reflecting those who can work but cannot find a job as well as those who have stopped looking, is at an astounding 17.3%.  That’s a Great Depression-sized figure.

So, why did unemployment go down last month?  In reality it didn’t — we just stopped counting more people than last month.  Change the denominator and the outcome is bound to change in odd ways, so you can bet that some will undoubtedly tout less workers as a sign of an improving economy nonetheless.

Hat Tip on the U6 number:  Hot Air.

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