U.S. unemployment hits 9.2 percent for September; inflation at 5+ percent

I am getting really tired of the media reporting the government’s unemployment press releases and not taking 30 seconds to look at the actual unemployment numbers.

It’s very simple to me: The unemployment rate is based on the number of people who want and are able to hold full-time jobs but aren’t. Period.

Imagine 100 people.

• 75 of them have full-time jobs.
• 15 can’t work (because of age, disability, etc., of because they’re students)
• 10 want to work but can’t find a job

Your unemployment rate is — wait for it — 10 percent. Simple. (You can make it more complicated if some of those 10 have part-time jobs; maybe the rate is 8 percent. But the math is clear.)

Unless you’re the government, and unless you’re the news media reporting those numbers. Because what the government does is not count “everyone who’s not working but wants to.” Instead, it counts “everyone who’s not working, wants to, and is collecting unemployment benefits.”

If you unemployment bennies have run out, the government doesn’t consider you unemployed.

The Bureau of Labor statistics says that for September 2008…

• There are 154,509,000 members of the civilian labor force
• 9,199,000 are unemployed
• Ergo, unemployment is 5.95 percent — that’s the “6 percent” number you’ll see

But it also says that there are an additional 4,895,000 people who want a job but can’t find one. So in reality…

• There are 154,509,000 members of the civilian labor force
• 14,184,000 are unemployed, can work, and want to work
• Ergo, unemployment is 9.18 percent — that’s the “9.2 percent” number you should see

Note to the media, big and small: This isn’t very hard to find. It’s right in the BLS release, not even buried.

Oh, and the same logic applies to inflation. When you read that inflation is at 2.5 percent (as of August), remember that the number doesn’t reflect food and energy prices. Because — seriously — food and energy prices change a lot. (!)

Curious? The inflation rate for food in August was 6.1 percent, and for energy, 27.2 percent. So inflation is well above 2.5 percent — probably closer to 5 or 6 percent when you include everything.

But don’t worry.

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Addendum: According to the Federal Reserve Bank of New York, inflation for August, including food and energy, was about 5.5 percent: