On Jan 10, 2012, at 10:15 AM, David Green wrote:
> SGS is being referred to frequently in relation to their unemployment figures: http://www.shadowstats.com/alternate_data/unemployment-charts
Very misleading. Williams: "The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers."
What happened in 1994 was that a question was added to the survey asking discouraged workers if they'd looked for a job at any time in the past year. That strikes me as not unreasonable. If you're just sitting around for months on end saying, "Shit, sure would like a job," without actually trying to find one, should you really be counted as "discouraged"? Since 1994, the person who hasn't looked for a job at all in the last year is categorized as "not in labor force - want job." A number that is published every month in the employment release.
The Shadow graph has the broadest unemployment rate, which includes these wishful souls, at something like 6-7 points above the BLS's broad U-6 rate. But the "not in labor force - want job" category is less than 3% of the civilian population. I don't know how that gets multiplied by two or more.
Doug