Would the Real Unemployment Rate Please Stand Up

I love how the government and media quietly announced the unemployment statistics for August last Friday as many of us were either out of the office or rushing to get an early start to the Labor Day weekend.

I enjoyed even more the subtle way in which the news acknowledged the fact that the unemployment rate jumped to 9.7 percent, only 30 days after we had heard that it had declined in July to 9.4 percent from 9.5 percent in June, a trend which was heralded as evidence that the U.S. had reached or was near the bottom of this recession. Of course we learned last Friday that the unemployment figures for July were “upwardly revised” and as a result we didn’t experience a decline in the first place, a side effect of what I term “premature calculation”!