Tuesday, October 1, 2013
Is Unemployment REALLY Down? -- How to Interpret the Numbers
The primary criteria used to report the level of unemployment is the number of applications filed for unemployment benefits. In general, the higher the number of applications, the higher the estimated rate of unemployment. But numbers can be deceiving.
For example, when the Labor Department recently announced that the number of claims for unemployment benefits dipped below 300,000 for the first time since 2006, they also were quick to point out that this did not necessarily mean good times for the job market. As they explained, the dip, in part, was also triggered by other factors.
Two states were changing their computer systems, resulting in their not filing their numbers on time to hit the report. This made the number of claims appear lower. In addition, the Labor Day holiday weekend may also have contributed to other claims not being filed or included in the number that was reported.
What does this all mean?
It's good that the number of people losing their jobs has been decreasing since 2009, but one needs to look at the proof in the details when reading reports about unemployment levels as a sign of a strong economy. Other factors can affect the numbers. But one factor that has not changed and that is the effect that unemployment has on the lives of Americans everywhere. Somehow, when you don't have a job and can't find one, the fact that the unemployment rate has been decreasing since 2009 just doesn't sound much like good news.