Nationwide unemployment for September unexpectedly fell to 7.8%,
causing conspiracy theorists like Jack Welch to argue the numbers
are being rigged by the Obama administration.
The former General Electric executive tweeted:
"Unbelievable jobs numbers..these Chicago guys will do
anything..can't debate so change numbers."
Although the masses and Jack Welch are fixated on the "headline"
jobless rate of 7.8%, other data sets from the Bureau of Labor
Statistics (BLS) paint a far more accurate and realistic picture of
the job market. (VIDEO:
7-Years of Income Famine for Investors
At ETFguide.com, we regularly highlight the U-6 number (also
known as the "under-employment" rate) because 1) the media
consistently ignores it, and 2) it's far more accurate picture of
the labor market because it includes discouraged workers,
marginally attached workers, plus workers that are forced to work
part-time because they are not able to find a full-time job.
Since November 2008, the U-6 jobless rate has increased from
12.7% to 14.7%. By comparison, the much less complete U-3 number
has increased from just 6.8% to 7.8%. But wait, there's more!
The U-6 number - even with its more robust data set - still
misses on many levels. For example, it fails to include another
important segment of the work force: The self-employed un-employed
worker. (Example: A self-employed real estate broker that can't
secure work.) If we added this demographic to today's U-6 figure,
real nationwide unemployment is probably closer to 17%! During the
Great Depression era of the 1930s, the unemployment rate is
estimated to have peaked at 25%.
One final note, for conspiracy theorists everywhere: If you
think a dip below 8% (U-3) gets Obama easily re-elected, think
again. Only one president since World War II has been re-elected
with the unemployment rate above 6%. And that was Ronald Reagan in
1984 when the U-3 jobless rate was 7.2%.
Here's what it means:Even with a slight downtick in the U-3 rate
to 7.8% in September, the statistical odds, in terms of the
historical jobless rate, still do not favor Obama. Who knows, maybe
that will lower Jack Welch's blood pressure.
Aside from the real jobless rate, the October issue of the
Profit Strategy Newsletter
highlights 12 other mega investment themes that Wall Street has
ignored and which ETFs to hold and which to fold.
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