On another 1.2 million dropping out of the labor force

The January BLS numbers show that 1.2 million have dropped out of the labor force. Over the last year we have seen a huge drop in the number of people in the labor force. The BLS numbers showed an additional 1.2 million drop in January, though more accurately this drop should have been spread out over the last year. In fact, the number of people dropping out of the labor force was larger than was being reported. Between January 2010 and December 2011, the official numbers had shown that 3 million had dropped out of the labor force. The correct number for the period from January 2010 to January 2012 is over 4.2 million. Some people have attacked those who pointed to the 1.2 million number for January without acknowledging that the numbers that they have been using previously understated the already large number of people who had dropped out of the labor market.

Of course, as ususal, both Santelli and Zero Hedge have a real reading comprehension problem and completely missed that this million+ people isn’t some new January phenomenon, but a result of the BLS using the 2010 census data to have more accurate data. In other words, the changes in the Household Survey to the various measures had taken place over the years prior to 2010, but for simplicity’s sake, the BLS incorporates these changes into one month . . .

The adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000. Although the total unemployment rate was unaffected, the labor force participation rate and the employment-population ratio were each reduced by 0.3 percentage point. This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force participation than the general population.”

So Rick/Zero Hedge, unless you would like to argue that the population of the United States also grew by 1.5 million in one month (since that is from the exact same report/revision you quoted), I think both of you should retract your extremely misleading statements about those not in the labor force increasing by over a million in January and simply admit that you are either too stupid or too focused on selling a particular world view to read the data correctly. . . .