Nationwide unemployment for September unexpectedly fell to 7.8%, causing conspiracy theorists like Jack Welch to argue the numbers are being rigged by the Obama administration.
The former General Electric executive tweeted:
"Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers."
Although the masses and Jack Welch are fixated on the "headline" jobless rate of 7.8%, other data sets from the Bureau of Labor Statistics (BLS) paint a far more accurate and realistic picture of the job market.
At ETFguide.com, we regularly highlight the U-6 number (also known as the "under-employment" rate) because 1) the media consistently ignores it, and 2) it's far more accurate picture of the labor market because it includes discouraged workers, marginally attached workers, plus workers that are forced to work part-time because they are not able to find a full-time job.
Since November 2008, the U-6 jobless rate has increased from 12.7% to 14.7%. By comparison, the much less complete U-3 number has increased from just 6.8% to 7.8%. But wait, there's more!
The U-6 number - even with its more robust data set - still misses on many levels. For example, it fails to include another important segment of the work force: The self-employed un-employed worker. (Example: A self-employed real estate broker that can't secure work.) If we added this demographic to today's U-6 figure, real nationwide unemployment is probably closer to 17%! During the Great Depression era of the 1930s, the unemployment rate is estimated to have peaked at 25%.
One final note, for conspiracy theorists everywhere: If you think a dip below 8% (U-3) gets Obama easily re-elected, think again. Only one president since World War II has been re-elected with the unemployment rate above 6%. And that was Ronald Reagan in 1984 when the U-3 jobless rate was 7.2%.
Here's what it means: Even with a slight downtick in the U-3 rate to 7.8% in September, the statistical odds, in terms of the historical jobless rate, still do not favor Obama. Who knows, maybe that will lower Jack Welch's blood pressure.
Aside from the real jobless rate, the October issue of the ETF Profit Strategy Newsletter highlights 12 other mega investment themes that Wall Street has ignored and which ETFs to hold and which to fold.
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