A1A South

Per MSN Top Stocks:

Really, how hard is it to find a job? Was June’s horrid numbers, in which 467,000 people lost their jobs compared to 345,000 in May, a one-time fluke? Or does it mean that all those Wall Street economists who believe the economic recovery is starting are dead wrong?

Not to scare you, but the situation is actually worse than it seems. Over the years, the government has changed the way it counts the unemployed. An example of this is the criticized Birth-Death Model which was added in 2000. The model is designed to account for the birth and death of businesses and the resultant lag in survey data. Unfortunately, the model doesn’t work that well during economic contractions (like we have now) and consistently overstates the number of jobs being created each month.

John Williams of Shadow Government Statistics specializes in removing these questionable tweaks to the government’s statistical data to better align current numbers with the methodology used to gather historical data. After reviewing the data, Williams believes that “the June jobs loss likely exceeded 700,000.” David Rosenberg of Gluskin Sheff notes that the fall in the number of hours worked in June (to a record low of 33 per week) is equivalent to a loss of more than 800,000 jobs.

There are similar issues with the way the unemployment rate is measured. The headline rate only jumped from 9.4% to 9.5% because of a drop in the number of people in the workforce. The more inclusive “U-6″ measure of unemployment, which includes discouraged workers, jumped from 16.4% to 16.5%. But even this doesn’t adequately capture the situation on the ground: Back in the Clinton Administration, the definition of discouraged worker was changed to only include those that had given up looking for work because there were no jobs to be had within the last year.

By adding these folks back in, William’s SGS-Alternate Unemployment Measure rose to a jaw-dropping 20.6%. Separately, the Center for Labor Market Studies in Boston puts U.S. unemployment at 18.2%. Any way you cut the numbers, the situation is very bad. According to David Rosenberg, one-in-three among the unemployed have been looking for a job for more than six months and still can’t find one.

If you are unemployed, have people in your family that are unemployed, and the thought has crossed your mind that the government is lying to you about the unemployment rate, you’re right.

If you’re trying to keep your head above water financially, I’d recommend the blog Get Rich Slowly for financial advice. Unfortunately, a lot of “advice” out there assumes that you have a lot of equity in your house, no credit card debt, no day care expenses, etc.

A lot of unemployed people have maxed out credit cards, large house payments and low to negative equity, no savings, and are living paycheck to paycheck. They have child support payments. They didn’t have money to save before the job situation got dicey. They didn’t start paying down their debt 10 years ago.

As Dave Ramsey says on his nightly program, you need shelter, utilities, food, and transportation. That transportation can be a beater if somebody in your family is mechanically inclined. The food can be rice and beans. The shelter doesn’t need to be 3,000 SF with a pool. The utilities do not have to include cable. As for clothing, I’m going shopping with my daughter at thrift stores today looking for clothes for the grandsons.

That’s a pretty damning indictment of the press right there.