Unemployment Rate Hits 13.5%... err, I'm sorry 7.2%

If you have joined the website in the past 60 days, I usually rant about the shady government employment reports every other first Friday of the month (when the data is released)... I don't have time this month and have a lot of lengthy posts coming late this afternoon so I am going to skip the "every other" month rant. I will point you to this post [Nov 7: October's Unemployment Rate Rises to "6.5%"] - please read the entire thing if you have not and you will see what is "really going" on out there in the real economy.

The only thing that has changed are the absolute numbers - here are the differences between October's data and December's data

* The "official" unemployment is now 7.2% (December) instead of 6.5% (October)- this is the number the news agencies will spew about. It's wrong and understating the situation by a country mile.

* If government measured unemployment as they did before they started "adjusting things to make it sound more rosy" over the past 2 decades, unemployment would be up to 13.5% (December) instead of 11.8% (October). My belief is its even worse than that. So when the news agencies say "it's not as bad as the early 1980s" its a lie - the government has changed the way we measure unemployment since then. It is ALREADY as bad as the early 80s or late 70s. And we're still going deeper into the abyss.

* For you economic wonks, the birth death model showed growth of 72,000 jobs this past month (completely laughable considering small business is being sand blasted) so the already useless number would be worse by that much more if the government did not say 72,000 small businesses (including 18,000 in FINANCIAL ACTIVITIVES) were "born" last month.

Here is the link to the Mish article I link to each month - once more, if you have joined the site in the past 2 months I urge you to please read my post from October this weekend for a reality check on "government figures". The Great Depression had mid 20%s unemployment (how accurate that was? who knows - I doubt very accurate) - but we can measure quite accurately the 70s and early 80s. We are already in as bad shape as then and the next 3-5 months will get far worse.

So as we sit here each day listening to the pundits dreaming of "recoveries" in 2nd half 2009, just as we did a year ago at this time regarding 2nd half 2008... when you have the correct data set and use methodologies from the days the government did not try to "pull one over" the American people - you will see just how bad it is out there. And you don't have the same starry eyed belief. Our unemployment rate is not 7.2%, we are somewhere in the (at best) lower teens (more likely) mid teens. (remember folks, once you give up looking for work in America - you are no longer unemployed - it's magic!) I said last year we will have a great chance to reach a point where 1 in 5 Americans is out of work. We're on our way. Even Walmart sales are slowing! If the government report shows 10% unemployment which I've made as a 2009 prediction that means we will be greater than 20% in reality.

Our solution? Ask these people to take on more debt with cheap money. SPEND! It's the patriotic thing to do. We'll even make money free for you to do it! Thanks Uncle Ben. How about helping the savers in the world for once?

The stock market participants continue to live in a world of denial. Once the Obama honeymoon fades I believe reality shall set back in. This will be the worst post war recession we've had and people still think its a early 90s or early 00s style recession. But for now? Buy stocks - we have a recovery coming in "6 months" to look forward to. "It can't get worse than this" "It's all priced in" "0% car loans and 4% mortgages will drive people to consume consume consume!"