When Less Is More Less

Trey Smith

One of the topics I have written about numerous times over the past year concerns the various government reports about the unemployment rate. As Paul Craig Roberts (among others) has pointed out repeatedly, what the Obama administration and the mainstream media present each week or month continuously flies in the face of reality. They keep telling us that the employment picture is getting better slowly when, in fact, it's about as dismal as it was back in 2008!

Leave it to Dave Lindorff to dispel the made-up rosy picture in very clear language.

The US stock market jumped up today on word that the number of new unemployment applications fell to the lowest level in four years.

Sounds good, right? It's meant to sound good, but if you look at the number, and if you think about what it really means, it's not good news at all.

What the US Labor Department reported was that new unemployment claims filed for the week ended Feb. 24 totaled 351,000, which was slightly lower than the 353,000 new claims filed the prior week. "Slightly" indeed! A better term for this 0.57% decline is "statistically insignificant"!

The idea that such a "drop" in new claims would spark a jump in the Dow or the S&P shows how completely divorced from reality investors -- and the reporters who trumpet these kinds of things -- really are.

But it is worse than that. The number, remember, is new unemployment claims. That is to say, over a third of a million more Americans, all of them previously working, were laid off last week. Anyone who sees that as some kind of good news is really stretching to find a silver lining on a pretty dark cloud.

Lindorff really gets to the heart of the matter a bit further into his column.

Now I'll grant you that from one perspective it's good to see "only" 351,000 new people getting on the nation's unemployment lines rather than the 589,000 who joined a line in December 2008. But the reason the number is smaller now is not that things have been getting better. It's that there are fewer people to lay off. Companies and employers have already cut back their workforces to the bone, so for them to find another 351,000 people to sack, as they seem to be doing week after week, suggests they are really struggling. (emphasis added)

You see, though the numbers of the newly unemployed are less than the previous month, those numbers represent even MORE unemployed people which means that even less people, in reality, are gainfully employed.

If that wasn't bad enough, Lindorff leaves us with this.

By the way, the same day that the Labor Department reported that 351,000 new unemployment claims had been opened in a week, it was reported that in January US employers added a net 243,000 new jobs. That was in a month! But new unemployment claims in February were running at above 350,000 every week for a month following that net increase in jobs.

So, let's do the math. Four weeks in February x 350,000 = 1.4 million new unemployment claims versus 243,000 jobs created for the entire month of January. For the two month period, that leaves a balance of -1.16 million gainfully employed individuals.

And they want us to believe that the unemployment rate is going down?