As I (and everyone else) reported, last Friday the U.S. Department of Labor said that the U.S. unemployment rate had dropped to 8.6% (from 9%) following the creation in November of 120,000 net new jobs.  The U.S. is believed by some to need to create 125,000 new jobs each month simply to keep up with its population growth – for example, see a Businessweek article written by Chistopher Rugaber, published December 2 titled ‘Unemployment rate falls to lowest since March 2009’, – reading time 5 minutes.  That article also reported that:

• according to the U.S. National Retail Federation American’s spent $52.4 billion over the November 24 – 27 Thanksgiving weekend, while Mastercard said spending was up over 9% in that same period over 2010;

• currently in the U.S. about 13.3 million people are counted as unemployed;

• retailers, restaurants and bars created more than 50% of the jobs in November.  My comment:  that is to be expected given the build-up to so-called ‘Black Friday’ (the day retailers traditionally have believed their fiscal year profit and loss statements will change from an accumulated loss to an accumulated gain) and the Christmas holiday season generally.  To borrow a word from Fed Chief Bernanke, I expect many (if not most) of those jobs to be ‘transitory’;

• I say ‘importantly’, more than 300,000 people stopped searching for a job in November.  If that is true, given the time of year (the holiday season) that we are now in I think that is ominous; and,

• the so-called ‘underemployment rate’, which counts people who have given up looking for jobs and people with part-time jobs looking for full-time jobs fell from 16.2% to 15.6% in November.

On an overview basis, these statistics seem inconsistent to me – but then perhaps I am misinterpreting them.  I say this because if 13.3 million unemployed people represent 8.6% of the potentially employed U.S. population, that ‘potentially employed population’ would be (100/8.6 X 13.3) = 154.7 million people.  If the 120,000 reported net jobs had not been created in November, then the total number of people counted as unemployed presumably would have been 13.42 million (13.3 million plus 120 thousand).  The unemployment rate would then be 8.67%, not the 9.0% previously reported (13.42/154.7).  I am very skeptical about all these U.S. unemployment figures.  Antidotally, for what it is worth I can tell you that just having spent 5 weeks in the U.S. (North Carolina and Florida) no one I spoke with (and I spoke with a lot of people from all walks of life) told me they were seeing economic improvement in their respective geographic areas.  The best news I learned from some of those people was that some thought things weren’t ‘getting worse economically’, or weren’t ‘getting much worse economically’ – and broadly they were all both worried and disappointed with what they saw as ‘Washington in deadlock’.

You might also want to read:

• a December 2 Washington Post article written by Brad Plumer titled ‘Why are people dropping out of the labor force?’ – reading time 4 minutes; and,

• a Minnesota Public Radio story written by Paul Tosto titled ‘What the unemployment rate says and doesn’t say’ – reading time 1 minute.

Finally, you might want to:

• watch a December 2 eight minute video featuring Gerald Celente titled: ‘Gerald Celente: We-re going into an economic 9/11’.  The beginning of this video for me emphasizes how simplistic the main-stream media can be at times as they report what they are provided with without much if any thought – watch the video and see if you agree with this comment;

• watch a December 2 two minute CNBC video titled ‘Santelli: I Don’t Trust the Unemployment Rate’ for main-stream media coverage that actually looks behind the numbers; and,

• read a Wall Street Journal Blog article titled ‘Did (U.S.) Economy Create Nearly 500,000 Jobs in November?’ – reading time 4 minutes.  The 500,000 number is based on an Adjusted Household Survey Employment number also produced by the U.S. Labor Department, as contrasted with the aforementioned 120,000 number generated by what is referred to as the Establishment Survey.  I added this article reference for completeness, not for its confusion value, but I do suggest this article emphasizes that one has to wonder what one ought to believe.  Perhaps the best answer to that question is that people probably elect to pick the reported statistic that best suits their own particular purpose.

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