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Friday, May 7, 2010

Unemployment Statistics Mess

Friday morning we hear a government report that (1) payrolls are up an estimated 224,000 (after adjusting for census workers), and (2) unemployment ROSE to 9.9 percent.

The apparent contradiction is explained by workers either joining the labor force (recent graduates from years past who never had a job!), or those coming back from long term unemployment (meaning they didn't count in the earlier U-3 figure which is the rate everyone uses, once out of work for six months) or others deemed to not be looking for work). Nevertheless, a 0.2 percent jump in unemployment should not rationally be viewed as a sign of improving economic times.

Eric Dixon: an attorney based in New York who handles economic, strategic and legal analysis. For questions, call 917-696-2442.

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