Last month, I predicted that the Bureau of Labor Statistics would remove from the workforce many of the 1.3 million Americans who lost their unemployment benefits this month. And that's exactly what happened. According to the BLS, 5 people left the workforce for every job added last month. And yet, the unemployment rate mysteriously fell from 7% to 6.7%. The BLS, which is under investigation for data manipulation, has been proven wrong before. According to ZeroHedge, here's what the "headline" unemployment rate would look like if the bureau used the 30-year average labor force participation rate as opposed to its current 1970s rate. Keep in mind that this chart DOESN'T COUNT the tens of millions of UNDERemployed Americans. Lest we forget, a woefully insufficient number of "breadwinner" jobs have been created since the economy crashed.
Using the 30 year average labor force participation rate, we get a headline unemployment rate hovering between 11 and 12 percent. And, again, that doesn't count the tens of millions of Americans working below their capabilities. Gallup pegs the UNDERemployment rate at 17.2%. Recalculating the underemployment rate using the 30-year average participation rate, we get a number closer to 20%.
The BLS, of course, has been crushing down the headline unemployment rate by crushing down the labor force participation rate, as evidenced by the following chart:
Considering this next chart, it's highly unlikely that unemployment has dropped from 10% to 6% over the last few years, as the BLS has been reporting.
