Five years ago I was a "doom and gloom"-er; everyone was. You, like me, may have been constantly watching the unemployment rate and doubting all official government numbers that stated it was on the decline and everything was peachy. "Yeah, right!" we exclaimed sarcastically. We saw the opposite was true. So true we were waiting for the breaking point. This was it, a soviet-style collapse was just around the corner for the world's biggest superpower: The Ol' US of A.
And then 2016 Happened. A business savvy and (to enough extent) conservative minded leader was finally in the Oval Office and things seemed to actually be turning around. So, could it be that the economy has recovered and unemployment gone down? Let's investigate!
Here is the official unemployment rate from 1969 until September last year, down to 4%!
Now take a detour down the rabbit hole to our favorite alternative statistics provider: Mr. John Williams himself at ShadowStats.com which is reporting hardly a drop in Unemployment since the peak of 2009-2010 after the 2008 crisis:
Even CNBC reports the “broader” measure, otherwise known as U6, of 7.3% at the very top of their article on unemployment. Oh how the times have changed! Could it be that the mainstream cannot fool the public anymore by simply reporting the most watered down government statistics? Well, it’s also more likely they’re just comfortable with more negative reporting on the Trump Administration.
Their first sentence: “The unemployment rate fell to 3.8 percent in February, according to the Labor Department. But a broader measurement says the jobless rate plunged to 7.3 percent last month.”
One mainstream source being enough for me, I shall move on and see what else I can find. Remember, they can dilute the unemployment number very easy based on _WHO _they state is even _IN _the labor force. Because apparently they exclude more than just children, elderly and the disabled. In fact, official statistics only state 63% of our population being in the labor force! Reaching a high over 67% in 2000, the rate still hovers around the lowest since 1978.
Estimates say the recession moved nearly a third of workers out of the labor force. That’s funny because the rate only moved 4%. Clear evidence of the government’s fraudulent statistics.
It’s tough to know what to believe, but perhaps we can say the economic free-fall has stopped. Official numbers rate the Trump Presidency as spurring growth as compared to the last terms of Obama. The rate of GDP growth in Obama’s last year lowered from 2.3% in Q2, to 1.9% in Q3 to 1.8% in Q4 of 2016. Under Trump, GDP growth has averaged 2.9%. It saw 4.2% in 2nd quarter of 2018. NPR points out however that all signs (yes, official numbers) continued the same trajectory from the Obama Administration to Trumps. I would like to say, that the crash was so bad, of course we would rebound. That’s the nature of markets, up and down and so much has to do with people’s perception.
In the end it all comes down to definitions:
Who is in the labor force?
What does it mean to be unemployed?
How is GDP calculated?
The real answers on unemployment can be seen on the streets. It may be worse for us in California, but I don’t see an incredible recovery. I will lean more toward ShadowStats numbers of unemployment. For one, things keep getting more automated with robots and now driverless cars coming. Wages are still stagnant. We’ve relied on credit to prop up consumer spending to this point.
In the end, I’m more hopeful than ever for the future. Technology is meant to help us be more efficient. But in the same note, never trust official government statistics.
Until next time…