Alan Krueger, of Obama’s Council of Economic Advisers crowed on a White House website that the recent decline in unemployment is “further evidence that the economy is continuing to heal.”
The unemployment rate, however, is a strange bird. The government doesn’t actually know how many people, who want to work, can’t find a job. Government statistics come from a survey of 60,000 households on a monthly basis. The same households get interviewed several times, on a monthly basis, until they are dropped after their 4th interview. Then, after eight months, they are back in the survey for another four months until they are dropped for good.
The government says: “Respondents are never asked specifically if they are unemployed, nor are they given an opportunity to decide their own labor force status. Unless they already know how the Government defines unemployment, many of them may not be sure of their actual classification when the interview is completed.”
If individuals were asked if they were unemployed they would use the common sense definition. Those without jobs would say “yes” while those with jobs would say “no.” The government doesn’t want to define unemployed that way—the numbers would really make them look bad.
