It turns out, that recently released 9.4% unemployment rate is a tad misleading. Jim Geraghty over at National Review points out some interesting numbers:
Hmm. In June, the Bureau of Labor Statistics said the civilian labor force was 154,926,000 people.
In July, 796,000 of those were taken out of their definition of the workforce, and thus their unemployment calculations for this month, because they have stopped looking for work "because they believe no jobs are available for them." Ten percent of the June workforce would be 15.4 million, 1 percent would be 1.5 million, and so 796,000 is roughly one half of one percent.
In other words, BLS took .5 percent of what you and I would consider unemployed and took them out of their total. And with that, unemployment went down one tenth of one percent.
Apparently this is standard operating procedure for BLS, which makes little sense to me. They basically erased almost 800,000 unemployed people right out of the unemployment equation. Jim goes on to note that if those people were included in the formula, and they are unemployed after all, unemployment would have been 9.8% in June and 9.9% in July.
Those numbers seem more representative of the fact that the total number of Americans employed with a job continues to decline, which would be indicative of a rising unemployment rate, instead of one that, on BLS paper at least, declined one tenth of a percent.
UPDATE: John Lott at FoxNews.com comes up with an even larger number when he takes into acount people who took on low paying part-time jobs:
If we include the normally counted number of unemployed as well as those who have recently given up looking for work and those who have taken a part-time low paying job because they can't find full-time work, the implication is that the unemployment rate for July would be at 16.3 percent These discouraged workers will again look for work once the economy starts to improve, but this 6.9 percentage point gap between publicly discussed unemployment rate and these discouraged workers is unusually large.
