Unemployment January 2013

IMF rebukes Argentina for fake data – the US is better? Argentina has until November to change it’s statistics on inflation and GDP or get kicked out of the International Monetary Fund. It started in 2007, when late Argentine President Nestor Kirchner fired the statisticians in INDEC (the Argentine Bureau of Statistics) and replaced them. Since then the statistics differ wildly from those of independent analysts — 10% versus 25% – a fair amount.

The Argentinian government has fined statisticians that release numbers that contradict INDEC’s. To current president Cristina Fernandez de Kirchner’s administration, these people are criminals. The IMF will have no more, they made an official decision that Argentina must change its ways or join Czechoslovakia as the only countries to ever be forced out of the IMF and lose the funding that comes with that. Argentina could also lose its status as a G20 country. Difficult times for people into statistics. When people don’t like reports they like to deny, ignore and even attack reports one does not like. We see that in other areas of our political landscape.

Sure glad in the US its not like Argentina. Or is it? Unemployment is starting to supposedly rebound. Last week the US economy reportedly added 157,000 new “Non-Farm” jobs during January and revised November higher from 161,000 to 247,000, and the in December from 155,000 to 196,000. The actual unemployment rate booked a small advance to 7.9%. Good news – so why are we not seeing this in the Shadowstats data?

When looking at the thumbnail chart on unemployment two things pop out. A huge difference between government and private statisticians – and the dismal picture the unemployment rate actually is in the US. But of course this can all be explained in the magical formulas used to calculate labor participation rates, birth-death rates, etc … Both could be correct if the formulas used are just different. The point here is, trend vs. actual raw current rates are what is important. Here is where the two greatly differ. Government data indicates improving trends – Shadowstats say the opposite. Someone is very wrong.

The people at Shadowstats, may need to start worrying, perhaps the US government will start charging fines for statisticians it does not like – or perhaps the US too will get kicked out of the IMF.

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