A paradox of unemployment numbers

Here’s some low-hanging, pre-Thanksgiving fruit: unemployment falls in 75 percent of US states.

Of course there are 50 states, so each state represents exactly 2 percent and that should be an even number.

As it turns out, unemployment rates fell in 37 of the 50 states last month, or 74 percent.

This, of course, represents a large number of people who have something to be thankful for. I am one of them.

But somewhat paradoxically, the national unemployment rate actually went up in the last month! One possible explanation is that unemployment went down in small states and up in large states, but from eyeballing the data (see the October employment news release from the Bureau of Labor Statistics, which includes the September numbers as well) this doesn’t seem to be true. Dear readers: what’s going on? (This is not a rhetorical question!)

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3 thoughts on “A paradox of unemployment numbers

  1. I couldn’t see a list of 37 states with lower unemployment in the BLS page. They listed states with statistically significant changes but there were less than 37 of these with drops in unemployment. So I would assume that the rest of the number were minor drops below the statistical noise level of the surveys used.

    In case you didn’t know BLS does not actually count the total employment or unemployment in each state. They do a quasi-random national survey of about 60,000 households and 160,000 employers. For some of the statistical issues with these surveys see http://www.shadowstats.com/article/employment This site also points out the removal a few years ago from the unemployment statistics of discouraged workers who have been looking for a job for more than a year. That removed about 5 million people from the statistics.

    The government has been manipulating the statistics for unemployment, inflation and GDP for about 20 years now to paint a more better political picture than the reality on the street. And to reduce government index linked payment increases in SS and pensions.

    God plays dice wrote: > Michael Lugo posted: “Here’s some low-hanging, pre-Thanksgiving fruit: > unemployment falls in 75 percent of US states. Of course there are 50 > states, so each state represents exactly 2 percent and that should be > an even number. As it turns out, unemployment rates fell in ” >

  2. participation rate changed, the workforce population went up. so while there was an increase in jobs there was an even higher increase of people looking for work. Actually this is a good thing, it is a sign that discouraged workers believe there is a better chance they will find a job and usually precedes further job increases..
    hth, cid

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