Lying With Statistics

Yesterday The Federalist posted an article about the latest unemployment numbers from the Department of Labor. There was rejoicing that the unemployment rate had dropped to 5.5 percent. You might want to hold off on that rejoicing for a bit.

The article includes a chart showing what the unemployment number actually is when you add in the labor force dropouts:

Unemployment Rate With Labor Force Dropouts March 2015

As you can see, the actual unemployment rate is closer to 10 percent. So, if you know anyone who is unemployed and can’t understand why it is so hard to find a job, show them the real numbers. It might make them feel better.

The article explains:

This decline (the decline in the labor force participation rate) has significant effects on the official unemployment rate. People who are unemployed and eventually stop looking for work are no longer counted as being part of the labor force, which means they’re no longer counted by U.S. statistical agencies as being unemployed (you can read in detail about the math underlying this dynamic here). The result? An artificially low official unemployment rate.

It is an unfortunate fact of life that you can make statistics say pretty much anything you want them to say.