If You Want To Know The Truth About The Unemployment Rate Read This Article
The Obama administration is telling us that the unemployment rate in the United States has fallen to 5.1 percent, but does that number actually bear any resemblance to reality? On Friday, news outlets all over America celebrated the fact that the U.S. economy added 173,000 jobs in August. We were told that the unemployment rate has fallen to a seven year low and that wages are going up. So everything must be getting better for the middle class, right? After all, isn’t that what the official numbers are telling us?
The financial markets are buzzing over this news because the unemployment rate has fallen into a range that the Federal Reserve has typically considered to be “full employment”, so there is an expectation that the Fed may raise interest rates shortly. The following comes from Business Insider…
The unemployment rate fell to 5.1% in August, the lowest since April 2008. This was lower than forecast, and put the measure in the middle of the 5.2% – 5.0% range the Federal Reserve considers to be “full employment.” The economy added 173,000 jobs, below the expectation for 217,000, although August payrolls are usually revised higher. We also saw some wage growth, with average hourly earnings rising 0.3% month-on-month, and 2.5% year-over-year. The payrolls gain for July was revised up to 245,000 from 215,000.
But do we actually have anything close to “full employment” in this country?
Of course not.
The truth is that the only way they have been able to get the official “unemployment rate” to steadily go down over the past few years is to eliminate hundreds of thousands of Americans that are chronically unemployed from the official labor force numbers every month. Jim Quinn elaborated on this very eloquently in one of his recent articles…
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