Monday, October 08, 2012

If You Honestly Believe The Unemployment Rate Is Only 7.8%..

Then I've got this bridge I'm willing to sell you.
If the labor force participation rate had remained constant at the 67.5% level at the end of the recession (in June 2009), the unemployment rate would have been reported at around 11%. Count the underemployed, meaning part-timers wanting full time work, and the rate is 14.5%.

The economy must add 13.3 million jobs over the next three years -- 375,000 jobs each month -- to bring the unemployment rate down to 6%, notes economist Peter Morici. That means GDP growth must be running at a 4% to 5% pace, not the 1.3% rate it’s running at now, a pace that has been trending downhill since last year.

Not good for a recovery that began in June 2009—since then, GDP growth has been anemic.

Here’s the math behind the unemployment rate if all the people who want a job suddenly re-entered the workforce, according to FOX News analyst James Farrell: 

In September 2012, there were 6.73 million people who say they currently want a job, but are not in the labor force because they are not looking for work, says Farrell. If all 6.727 million of these workers suddenly started looking for a job, and would in turn be counted both in the workforce and as unemployed, then the unemployment rate would rise to 11.63%.

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