Phony Unemployment Numbers

As expected, the news media practically wet its pants reporting that the unemployment rate in December fell to 9.4 percent, the lowest level in more than a year. More than 105,000 new jobs were added to non-farm payrolls, offering further proof of a rebounding economy, according to media hype.

Before you break out the confetti to celebrate the end of the recession, it pays to consider the source of the data: the government-controlled Bureau of Labor Statistics.

The mainstream media regularly reports the bureau's data as gospel without bothering to question the numbers or look for alternative corroboration. As with all other information issued by the government, the data is often manipulated to fit the administration's agenda. This is another example.

There are two nuggets of data buried in the bureau's report that escaped media attention. Most damning of all, the number of discouraged workers increased a whopping 389,000 in December, raising the total to 1.3 million.

To put it succinctly, more workers believe their prospects for hiring are practically nil. They have given up all hope of finding a job. That is a bad sign for recovery and means the pressure for Congress to extend jobless benefits will continue to increase.

The second piece of data that leaps out is the nature of the job growth. It has not been an across-the-board recovery. Only three industries recorded any rise in hiring: leisure, hospitality and health care. By the bureau's own admission, the prospects for job growth have changed little for most major industries.

For a more balanced view of the job picture, here's what the non-partisan Gallup organization found in its monthly job survey. It pegged unemployment at 9.6 percent at the end of December. Their numbers reflect rolling averages for 30-day periods, a more accurate measurement than the methodology used by the Bureau of Labor Statistics. Gallup also does not use seasonal adjustments as the bureau does. These adjustments usually have the effect of skewing the numbers, often inflating job data.

Most troubling of all, the Gallup data found that the true unemployment rate is closer to 19 percent. That number includes the unemployed combined with part-time workers who want full-time employment. At the same time, Gallup's Job Creation Index showed monthly hiring and firing conditions were essentially unchanged over the past three months.

Check your daily newspaper, news website or evening newscast this week. Make a note of how many balance their coverage of the unemployment data issued by the Bureau of Labor Statistics with the non-partisan Gallup information.

My guess is that the media will take the road it always does: one-sided, unbalanced coverage designed to give the Obama Administration talking points to convince the American public that the job situation is improving.