The unemployment rate fell by 0.4 percentage point to 9.0 percent in January, while nonfarm payroll employment changed little (+36,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in manufacturing and in retail trade but was down in construction and in transportation and warehousing. Employment in most other major industries changed little over the month.(We like the Courier font the original report uses, BTW.)
Sounds good, right? Unemployment at 9.0%—down 0.4% from the month before. The economy recovering, right?
Ding-dong!—wrong! It’s called “Lying With Statistics”.
Basically, the BLS made three moves with the employment statistics: They reduced the number of people who could be counted as unemployed; they back-revised 2010 data, so as to count even fewer people among the unemployed; and they inflated the model they use to guesstimate new job creation.
Hence, even though there was a minuscule job growth of only +36,000 new jobs in the month of January, the headline blare is that unemployment went down 0.4%, to 9.0%.
So everybody happy!-happy!-happy! Right?
Hmm . . . everybody except the unemployed.