Forbes reports that January unemployment figures paint what some people consider to be a rosy picture. A decline to 9 percent unemployment has been hailed as “the fastest pace in half a century,” and people say they’re finding work. However, this data conflicts with a recent business survey reflecting weak job growth in January, hinting once again that the national media’s view of the unemployment rate is as blurry as ever.
Labor Department encouraged by unemployment data
Government surveys attribute the unemployment slide to 9 percent as a natural by-product of strong January data. One government survey that included the self-employed found that more than 500,000 people found work, but a survey by the U.S. Department of Labor noted that only 36,000 net jobs were created, which happens to be only a quarter of what the U.S. needed to keep up with population growth.
Nigel Gault, the chief U.S. economist at job forecasting firm IHS Global Insight, told Forbes that the drop in unemployment was not a drop in the labor force, but of actual job creation – even if many of those jobs come via self-employment. The total gain of 165,000 jobs via self-employment in January is the highest total since last May. Yet the self-employed do not factor into unemployment surveys that focus on corporate payroll numbers, which causes some confusion when job market numbers are reported.
Those who give up are invisible
Another problem that plagues unemployment rate reports is that the U.S. government no longer counts people who have stopped looking for work as being unemployed, but independent surveys do keep track. According to Forbes, in January 2.8 million threw in the towel; 200,000 more than in December. Some were simply discouraged, while others returned to school. Regardless of the reason, the participation rate – or the percentage of those working-age people out looking for employment – hit a 26-year low of 64.2 percent.
Fewer jobs created in 2010 than previously thought
Government analysts’ early estimate was that 1.1 million jobs were created in 2010, but further analysis found that 950,000 was a more accurate total. As analysts continue to struggle with conflicting data, consumers in need of more money than their jobs provide will continue to look to payday loans, perhaps until the country’s economic direction becomes more clear.