It says something about life in the United States in 2015 when the CEO of the premier public-opinion polling firm frets on national TV that he might “suddenly disappear” for calling BS on the government’s unemployment numbers.
On Tuesday, Gallup CEO Jim Clifton posted a column on his firm’s website declaring, “The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a big lie.”
True, he’s not the first public figure to denounce the jobs numbers so forcefully. Former General Electric CEO Jack Welch groused in 2012 about how “these Chicago guys will do anything.” But that was sheer political hackery four weeks before a presidential election. And it was especially rich given Welch’s own history of number-fudging: You don’t beat earnings estimates by exactly a penny per share, quarter after quarter, by happenstance.
But coming from Clifton, the accusation has more gravitas. His column describes how the unemployment rate excludes legions of Americans who’ve given up looking for work… and legions more who work part time but want to work full time.
It’s no great revelation if you’ve been reading my Blog from the beginning, or nearly any time since. But Clifton put the facts before a new audience.
On Wednesday, Clifton went on CNBC to “clarify” his remarks. “Lie” was perhaps too strong, he said. “Deceptive” was more precise.
“I think that the number that comes out of BLS [Bureau of Labor Statistics] and the Department of Labor is very, very accurate,” he explained. “I need to make that very, very clear so that I don’t suddenly disappear. I need to make it home tonight.”
Otherwise, Clifton stuck to his guns. The number of full-time jobs as a percent of the adult population “is the worst it’s been in 30 years.” Restoring the American middle class would require “a bare minimum of 10 million new, good jobs.”
The brouhaha is timely, seeing as the BLS delivered its monthly jobs report this morning.
The wonks conjured 257,000 new jobs for January. The numbers for December and November were revised upward. The unemployment rate — the “U-3” figure cited in the media — edged up to 5.7%.
As it happens the BLS publishes a number that’s more reflective of the true unemployment rate: It’s called the “U-6” figure. It clocks in at 11.3%.
But even that number is incomplete. If you gave up looking for work longer than a year ago, you’re not counted in U-6.
That’s where the economist John Williams’ work proves its worth. His Shadow Government Statistics website includes all those people the U-6 figure excludes… which happens to be the way the BLS calculated the U-3 figure during the 1970s.
That number grew in January from 23.0% to 23.2%. It’s been hovering in the 23% range — record territory — since May 2012.
And it could get worse so stop spending so much and learn how to save like back in the day when folks didn’t live on credit and still cared about their children’s futures.
Understand the difference between fantasy and reality too!
Thanks to Agora Financial for the chart and updated info.