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Friday, February 3, 2012

The Statistical Distortion Game Never Ends

When I checked the news this morning and saw unemployment dropped dramatically from 9.2% to 8.3% in one month, I was furious!  Don't get me wrong-- it wasn't because people were getting hired.

It was more because people really weren't.

The Bureau of Labor Statistics stated that non-farm payrolls went up by 243k in January, meaning in simple terms that 243,000 people were newly hired.  Now, with rising population and those newly entering the work force taken into consideration, it takes a monthly creation of 225k jobs to lower unemployment...  Mind you, this is over time, as in many years.

So how did the unemployment rate drop sooo dramatically??

1.2 million people dropped out of the labor force in one month!

Yes -- 1.2 million people.

"The labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 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% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation... the US is replacing high paying FIRE jobs with low paying construction and manufacturing... " (ZeroHedge)

So what is the real uemployment rate in the US based on statistics from the BLS?

11.5% unemployed.

Its all about math (Warning- this gets a little technical):

"Using BLS data, the US civilian non-institutional population was 242,269 in January, an increase of 1.7 million month over month: apply the long-term average labor force participation rate of 65.8% to this number.. and you get 159.4 million: that is what the real labor force should be. The BLS reported one? 154.4 million: a tiny 5 million difference. Then add these people who the BLS is purposefully ignoring yet who most certainly are in dire need of labor and/or a job to the 12.758 million reported unemployed by the BLS and you get 17.776 million in real unemployed workers. What does this mean? That using just the BLS denominator in calculating the unemployed rate of 154.4 million, the real unemployment rate actually rose in January to 11.5%... "  (ZeroHedge)
~ Labor Participation Rate chart- Older Americans are being forced to stay in the work force to survive the higher costs of everyday life and dwindling savings.  The young to middle-aged are being either forced out of the labor market or simply denied entry.

Its very easy to play games of statistical distortion.   In fact, let's play a simple one together just to make the point even clearer.  In a room, are 100 people- 50 male & 50 women.  And among this grouping are various races, ethnicities, etc...  Now the question is:  What percentage of these people have blonde hair?

Now on visual first sight, it appears 30 out of the 100 people have blonde hair- 30%.  But we have to treat this exercise like those who compile the BLS reports so we have to now establish specific criteria as to what is 'blonde'. For instance if it decided that only natural blondes can call themselves that, we eliminate a percentage of those 30 'blondes'-- let's say 15 of them dye or color-treat their hair.  So they don't count in the findings.  Then its determined to be blonde, you must have blue eyes.  So that eliminates another 5 people.

So now you can declare that out of 100 people, 10% are blondes (when its really 30% without all the games and manipulated criteria.)

In life, a person or entity can manipulate any statistic for their own agenda or psychological/ideological purpose.  A person on a diet can say they cut their daily calorie intake by simply ignoring or distorting how many calories from sweets is ingested.   Another can look at their bank account, see $2.5 million and feel quite wealthy and simply ignore the $3.1 million he/she owes to creditors.  On and on..

The US Government is going to force you to feel hopeful and optimistic, and have you believe the nation is in recovery, if it has to figuratively choke you to death on pollyanna news, rising stock market Dow figures and other statistical distortion.  And they have unlimited resources and tricks/schemes to do it...

Only the strong will survive this mind game
~ Look closely.. what do you see?

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