Last week the Bureau of Labor Statistics released data saying that the US unemployment rate was down slightly, to 9.4 %. It reminds me of the saying that Mark Twain popularized about there being three kinds of lies: lies, damned lies, and statistics.
The government removed 796,000 people from the total number of unemployed. Those people are still unemployed, but they've given up looking for jobs. So they're not counted. This is nothing new, since the Labor Bureau has always done this. But in a climate like today when we have so many people unemployed, it can really shift the numbers. When you add them back in, the real rate is 9.9%. Probably it's actually even more than that, because it doesn't account for people who are working fewer hours than before, and those who are working part time when they really want full time work.'
My point is that the headlines are a bit misleading. This isn't an economics blog, but I've been thinking about the economy a lot lately. The downturn has moral dimensions to it. While I'd like to be hopeful, I think the reality is that it will get a lot worse before it gets better.