Global markets put in another solid week after what appeared to be positive jobs and unemployment numbers. While the market often gets a kick (up or down) from the jobs and employment numbers, like most government produced statistics, they are often excessively massaged. I will be the first to admit I am very suspicious of government produced statistics, and for good reason.
A recent Washington Post / Bloomberg article discussed the shadow figures for unemployment. Here is an excerpt from that article:
“Overshadowing the nation’s economic recovery is not only the number of Americans who have lost their jobs, but also those who have stopped looking for new ones. These workers are not counted in the Labor Department’s monthly unemployment rate, yet they say they are willing to work. Since the recession began, their numbers have grown by 30 percent, to more than 6.4 million, amounting to a hidden labor force that could stymie the turnaround. Adding these workers to February’s jobless rate pushes it up to 13 percent, well above the more commonly cited 8.9 percent rate. An even broader measure of unemployment, which includes people forced to work part time, stands at nearly 16 percent.”
In the last year, the civilian population rose by 1,841,000. Yet the labor force went down by 489,000; those not in the labor force rose by 2,330,000. So, when we look at unemployment figures and consider all those not accounted for, you must disregard the figures and understand that it is worse than we are led to believe.
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John P. Chladek, MBA, CFP® is the President of Chladek Wealth Management, LLC, a fee-only financial planning and investment management firm specializing in helping families and couples who are not yet retired realize their financial goals. For more information, visit http://www.chladekwealth.com.