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White House Says Unemployment Down Yet Actual Unemployment Up

Last Friday, the Labor Department reported that in January the unemployment rate had fallen from 10 to 9.7 percent. The White House claimed that this was positive news that the economy was improving. However, upon closer examination, the Labor Department’s job statistics are seasonally adjusted. Despite the seasonally adjusted unemployment rate falling, Americans lost 20,000 jobs in January. Dr. Anthony B. Sanders, Professor of Finance at George Mason University, claimed that Americans should not get too excited about the Labor Department’s unemployment numbers due to the fact that:
The actual unemployment numbers show an increase from 9.7% to 10.6%.
According to the Labor Department statistics, the actual unemployment rate has increased .9 percent from December. Below is a table of their non-seasonally adjusted unemployment data:

Table A-1.Employment status of the civilian population by sex and age



Table A-1. Employment status of the civilian population by sex and age

Numbers in thousands

                                                                                    Jan.          Dec.        Jan.                                                                                 2009         2009         2010TOTALCivilian noninstitutional population                234,739    236,924    236,832Civilian labor force                                            153,445     152,693   152,957Participation rate                                                    65.4            64.4          64.6Employed                                                             140,436    137,953   136,809Employment-population ratio                               59.8           58.2          57.8Unemployed                                                          13,009      14,740      16,147Unemployment rate                                                    8.5            9.7          10.6Not in labor force                                                   81,293      84,231    83,876Persons who currently want a job                         5,866       5,939       6,108
According to the Labor Department, revisions in the data are responsible for the temporary lower seasonally adjusted unemployment rates:
the rate dropped from 10 percent the previous month because it revised the total payrolls to show there were 930,000 fewer jobs last March.
Peter Morici, a University of Maryland economist, confirms that the actual unemployment rate is higher than 10 percent:
The actual unemployment in the economy did not go down, it’s just the data was revised. When you have a revision in the data like this, you really have to wait until next month, at least, to get a clear picture of what’s going on.
The seasonally adjusted unemployment rate of 9.7 percent can be misleading. In fact, the actual unemployment rate has increased .9 percent within the past month to 10.6 percent. However, many economists believe that the real unemployment rate could be even higher since discouraged workers that have given up looking for work are not included in the government's official statistics. Despite January's job reports, Americans continue to lose jobs at a staggering rate with little to no relief in sight.