“A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55 percent. Looks like the good folks at the BLS heard us: It appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non-institutional population increased to 242.3 million, meaning those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30-year low of 63.7 percent as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation.”
“The sharp drop in the government-reported unemployment rate for November and the sharp drop in jobless claims during the most recent reporting week have combined to create the perception that the job market may be improving … . In contrast, Gallup’s data suggest little improvement in the jobs situation.” The organization concluded: “It may be wise to exercise caution in interpreting the drop in the government’s most recent jobless claims numbers.”
No one in the mainstream media, busy rewriting the government’s press release on Friday, will bother to question the newest number, or explore what trimtabs.com CEO Charles Biderman said that very day: “Actual jobs outstanding, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments — made at the sole discretion of the Bureau of Labor Statistics economists — that 2.9 million less jobs gets translated into 446,000 new seasonally adjusted jobs for January and December.
“No one I know has any idea as to how the BLS does this seasonal adjustment,” he said.