As the unemployed first become discouraged and then disappear into the long-term discouraged category, they also vanish from inclusion in the headline labor force numbers. Those workers still are there, however, ready to take a job if one becomes available. They are unemployed and consider themselves to be unemployed, but the government’s popularly followed unemployment reporting ignores them completely.
The real unemployment rate for December 2012 is closer to 23 percent, not the 7.8 percent reported by the Bureau of Labor Statistics, according to economist John Williams.
Williams, author of the Shadow Government Statistics website, argues that the federal government manipulates the reporting of key economic data for political purposes, using methodologies that tend to mask bad news.
In the BLS news release Jan. 4, the unemployment rate for December 2012 was reported to have remained unchanged at 7.8 percent.
Williams recreates a ShadowStats Alternative unemployment rate reflecting methodology that includes the “long-term discouraged workers” that the Bureau of Labor Statistics removed in 1994 under the Clinton administration.
The BLS publishes six levels of unemployment, but only the headline U3 unemployment rate gets the press. The headline number does not count “discouraged” unemployed workers who have not looked for work in the past four weeks because they believe no jobs are available.
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