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Obama's Rosy jobless numbers cover up bad news

Economist sifts truth from ‘politically manipulated statistics’

by Jerome R. Corsi

Editor’s Note: This is the third in a series about the unprecedented dependence Americans have on their federal government. The first story shows how the food-stamp program has doubled under President Obama, as it did under President George W. Bush. The second story reports the strain on the welfare system caused by record numbers of Americans retiring amid a declining work force.

NEW YORK – As the Obama administration announced unemployment in June had fallen to 5.3 percent, respected economist John Williams, the author of, argued in his private subscription newsletter that the Bureau of Labor Statistics’ rosy numbers were not the result of a recovering economy creating full-time jobs but a product of manipulating statistics for political purposes.

Williams pointed out that the drop in unemployment from 5.5 percent in May to 5.3 percent in June reflected 375,000 unemployed workers disappearing from the workforce.

“Separately, aside from the headline June payroll gain of 223,000, which was a count of jobs, not people holding jobs, headline full-time employment fell by 349,000, representing the count of people who lost full-time jobs in June,” Williams wrote in his subscription newsletter.

Williams said that on the unemployment front, the drop in the headline U3 rate from 5.5 percent to 5.3 percent “could not have been more negative.”

“Instead of the 375,000 drop in unemployment representing people finding gainful employment, it represented those people leaving the headline labor force, most likely being shifted to the headline discouraged-worker category by the BLS,” he said.

Williams point was that the BLS reported June payrolls rose by 223,000 in June, but it neglected to point out that “June payrolls” measures the number of jobs, not the number of people with jobs.

“Headline June employment and unemployment numbers were more typical of deteriorating, broad economic activity than they were of an expanding economy in its purported sixth year of recovery,” he said.

Supporting Williams’ argument, the BLS also reported last week that a record 93,636,000 Americans were no longer in the labor force in June, up from 92,986,000 in May, while the labor force participation rate continued to hover near the 38-year record low, registering labor force participation at only 62.6 percent for June.

Calculating unemployment by historically accepted government methodologies, Williams concludes the unemployment rate in June was not the 5.3 percent “headline rate” reported by the Obama administration, but above 23 percent, where it has been since April 2013.

Manipulated unemployment rates

The BLS publishes six levels of unemployment, but only the headline U3 unemployment rate gets attention.

The headline number does not count the “discouraged” unemployed workers who have actively looked for work in the past year but not in the past four weeks, because they believe no jobs are available.

Williams has demonstrated that it takes an expert to truly decipher BLS unemployment statistics.

The U6 unemployment rate is the BLS’s broadest measure. It includes those marginally attached to the labor force and the “under-employed” – those who have accepted part-time jobs when they are really looking for full-time employment. Also included are what Williams describes as short-term discouraged workers who have looked for a job in the past year but not the past four weeks.

Since 1994, however, the long-term discouraged workers, those who have been discouraged for more than one year, have been excluded from all government data.

The only measure BLS reports to the public as the official monthly unemployment rate is the seasonally adjusted U3 number.

Williams calculates his ShadowStats Alternative Unemployment Rate by adding to the BLS U6 numbers the long-term discouraged workers.

Williams argues that his ShadowStats Alternative Unemployment measure most closely mirrors common experience.

“If you were to survey everyone in the country as to whether they were employed or unemployed, without qualification as to when they last looked for a job, the resulting unemployment rate would be close to the ShadowStats estimate,” Williams explained to WND.

The headline BLS unemployment rate has stayed relatively low because it excludes all discouraged workers, Williams argues.

Here is a more complete unemployment table that includes the seasonally adjusted unemployment percentages for U3 unemployment, as well as the same for U6 unemployment, followed by the ShadowStats Alternative Unemployment rate, comparing June 2014 with June 2015.


As is made clear by the table, the BLS admitted that in June 2015, when the headline unemployment rate reported to the U.S. public was the U3 rate of 5.3 percent, the U6 rate for June 2015 was much higher, 10.5 percent.

Obama ‘non-recovery’

Williams believes the drop in unemployment to 5.3 percent in June reflects systematic government manipulation in what he characterizes as Obama’s “non-recovery.”

“In the ongoing economic collapse into 2008 and 2009, and the non-recovery thereafter, the broad drop in the U3 unemployment rate from its headline peak of 10 percent in 2009 to today’s 5.3 percent has been due largely to unemployed giving up looking for work, being redefined out of headline reporting and the labor force, as discouraged workers,” Williams explained in his current subscription newsletter.

He noted that as new discouraged workers move regularly from U3 into U6 unemployment accounting, those who have been discouraged for one year are dropped from the U6 measure.

As a result, the U6 measure has been declining along with U3 for some time.

But those being pushed out of U6 still are counted in the ShadowStats Alternate Unemployment Measure, which has remained steady, at or near its historic-high rate for the last couple of years, Williams said.


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