Fun and games with unemployment

How can the unemployment situation be slowly improving, when the cost of unemployment claims is skyrocketing, setting new records all the time? There are three things going on:

1. The number of people who have gone off normal unemployment (so now don't count, though they are on emergency unemployment extension) is greater than the number on unemployment.

2. The number of people who have been unemployed so long that they no longer get any benefits (and therefore don't count) is a record number.

3. Our trusty government started a new, wrong way of calculating the number of unemployed last summer. When it was discovered by citizens, they said oops about the overcount, and said they would correct it over the next few months. In other words, they overcounted 182,000 when the numbers were bad anyway, and have them in their back pocket to adjust the numbers by 50,000 here and 100,000 there when they need a different result.

It's all good fun being able to pick and choose whom you'll count and when to be able to come up with numbers you like. I'm sure they don't mean anything by it. It's not like they're cooking the books. Well, it's LIKE they're cooking the books, but not EXACTLY like it.

A little explanation of the situation by guru John Mauldin:

“Today's employment report was just terrible. The headline said we lost 85,000 jobs. That is from the establishment survey, where they call up larger businesses and ask them about their employment. They also do a household survey, where they survey about 400,000 households. That report reveals a much worse situation.
Last month, single women who are heads of households saw their unemployment ranks rise by a massive 127,000. The number of employed men fell by 214,000. The total number of unemployed in the survey rose by an enormous 589,000. Those classified as not in the work force (due to the fact that they did not look for jobs) rose by 843,000! That now means that in 2009 3.5 million people were dropped from the potential labor force count because they were discouraged.”

By: John_Mauldin
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Here's another great article from Bloomberg that explains that the huge number of people giving up on job hunting makes the unemployment numbers look steady instead of constantly rising. Also, the deliberately uncounted help give us rosier numbers. The real percentage of unemployed is currently about 18%, depression-era levels.

www.bloomberg.com/apps/news?pid=20601087&sid=aHA4PMI1G2ks

And one from top guru Nouriel Roubini about how unemployment is much worse than reported and still getting worse:

www.roubini.com/us-monitor/258246/the_bad_job_numbers_and_the_secret_second_stimulus