Don’t believe government announcements concerning unemployment data or inflation.
February 06, 2011
Our leaders seem to care only about getting reelected rather than addressing the dire needs of our nation. It takes about 150,000 newly created jobs to simply absorb the latest batch of first time entrants into the job market. The latest jobs data showed only 36,000 new positions yet claimed that the unemployment rate dropped from 9.4% to 9.0%. You don’t need an MIT degree to see this does not compute.
To obscure the truth, Washington D.C. has changed the rules on how they account for this rate. Presto, a big drop in unemployment even though more people entered the work force than the number of new jobs created. The chart below tells the true story. The percentage of America’s population that is actively employed has fallen to levels almost never seen. It’s worse now than it’s been in decades.
The official inflation rate numbers are similarly massaged to show low inflation even as everyday Americans see their living costs escalate dramatically. Pretending that inflation is low keeps debt service on our $14 trillion national obligation low. It also made for no raises in Social Security payments in either 2010 or 2011. Cost of living adjustments on pensions and other major government expenses are also keyed to the official inflation proclaimations. Political leaders have every incentive to undereport the real rate. ShadowStats shows the numbers in the chart below as they would have looked under the 1990 calculation rules. They’d look even more shocking if we were actually comparing apples to apples with the way inflation was figured in 1980’s when the reported rate was well into the 10% - 18% annualized range.
Dr. Paul Price
About the author:
Dr. Paul Price
GuruFocus - Stock Picks and Market Insight of Gurus
Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC.
Stock quotes provided by InterActive Data. Fundamental company data provided by Morningstar, updated daily.