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Politics : American Presidential Politics and foreign affairs

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To: Peter Dierks who wrote (71200)	1/31/2015 2:06:52 PM
From: TimF	Read Replies (1) of 71588

Their inflation estimates don't pass the laugh test. Both in terms of the actual prices (they would have inflation at 1970s level in the years before the start of the recession if you use their 1980 based alternative stat), and in terms of what they would mean for real GDP data, where at least if you use their 1980 inflation adjustments, then there really hasn't been any growth since the Reagan administration (and that's in GDP not per capita GDP). A lesser objection is that I disagree with their stance on hedonic adjustment. To give one example a car today isn't not equivalent to a car from 1980. Make no adjustments and the entire increase in nominal price is inflation, but really you are buying a different (and normally much better) product. As for their unemployment stats - The U6 stats already count employed people as unemployed. U3 is the headline unemployment rate. U4 adds in "discouraged workers". U5 adds "marginally attached" workers. Both are groups of people that aren't actively working for jobs. But they aren't fully and by choice removed from the work force, and they aren't working. I could see using something like U3, U4 (Not adjusted 5.8% Seasonally adjusted 6.0%), or U5 (6.7% or 6.9% when seasonally adjusted), as the "real unemployment rate". (Of course then when you compare with past years you should also use U4 or U5 for those years, not compare to previous U3 stats.) U6. Includes involuntarily part time workers. It can make sense to track and be concerned about those people's situation but they aren't unemployed. The U6 stats are those too high to represent an unemployment rate. They could be considered the "unemployed and underemployed rate" (With underemployed referring only to hours, not to people who work on a job that pays very low compared to their skills or expectations.) Without a subscription (and possibly even with one), I can't get the full details of Shadowstats methodology, but they apparently count involuntarily part time works as unemployed, and people who gave up looking for a job a long time ago and have essentially completely left the workforce. The later seems a dubious group to count as unemployed (and even if they where to be counted I'd want more information on who is really being counted). The former (also counted in U-6) are employed, not unemployed.

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