Friday, December 2, 2011

The Unemployment Numbers Mean Nothing


Bad analysis:

The Bureau of Labor Statistics‘ most recent unemployment figures are out along with all sorts of analysis from the deluded “See? The economy’s healing. Not very fast, but it’s healing! Chin up there, America,” to the more sober “No, the economy is not healing; people are just giving up on looking for jobs. The numbers say so.”

And they do. But let’s zoom out– like way out, and ask just why so many commentators, even the most sober among them, are treating employment numbers like some kind of useful metric for measuring the health of the economy and deciding whether it’s “healing” or not? I mean, right– even if the employment rate were a good measure, the latest figures are still hardly encouraging, but sound economic analysis has to go so much deeper than that. As far as measuring the overall health of the economy goes, the unemployment numbers mean nothing.

Good analysis:

It’s a lot like what one commentator recently said about Black Friday sales, another stupid metric that the media and politicians obsess over as if it were some kind of fool-proof economic barometer:

‘You know the economy and stock market are in deep trouble when the Mainstream Media elevates one essentially meaningless metric to “The One Meaningful Statistic” and then trumpets it slavishly. One such meaningless metric is Black Friday.

The Media has glommed onto Black Friday for a number of flawed reasons, number one being the MSM’s ceaseless drive to reduce all complex problems down to something that can be expressed in a sound-bite voiceover and a video clip of a crowded mall.

The MSM loves binaries: two parties, two final contestants, and if Black Friday is “good,” i.e. sales exceed last year’s consumerist bacchanal, then the economy is “healthy.” Any weakening of the consumer’s lemming-like drive to buy, buy, buy means the economy is “weak.”

This is of course absolutely backward: consumers buying shiploads of poor-quality crap made overseas means the economy is still on the slippery slope to implosion, as debt is being used to fund consumption while capital formation (savings) remains pathetic.’

Did you read that? Someone give this guy a job at CNBC. Media reports and analysis over the unemployment rate are– like Black Friday sales figures– easy, binary, sound-bite friendly fluff to fill the airwaves, distract you, and make you stupid.

But you obviously refuse to be stupid because you’re reading some independent commentary on the Internet and investigating alternative opinions for yourself right now instead of watching cable news. And you’re in luck, because I refuse to fill your head with fluff. If you want fluff, you can go pet a bunny. If you want spin, you can go ride a merry go round (or watch Bill O’Reilly– oops, I said it!).

Here is the truth about unemployment figures:

Read the rest of my article at The Silver Underground.


Wes Messamore,
Editor in Chief, THL
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