Economics @ ITT

US Overestimates Job Growth

Posted in economics, macroeconomics by ittecon on May 11, 2011

The Bureau of Labor Statistics announced in March that the economy produced 192,00 new jobs, so the unemployment rate dropped to 8.9%. This was reported everywhere by corporate media claiming that this is a turning point in the U.S. economy and a sign that our economy is becoming self-sustaining. According to, there is no sign of an increase in employment rates and the opposite is actually occurring. John Williams from, states that the government overestimates job growth by 230,000 jobs a month, so the unemployment statistics are very misleading. One reason for the misleading unemployment statistics is due to the Birth Death Model, which has to do with the birth and death of companies. The Birth Death model overestimates the number of jobs created when a new company is started, but doesn’t subtract the number of employees that lose their jobs when a company goes out of business. There have been multiple stories in independent news media that have reported on the increase of job loss and higher unemployment rates. states that the true unemployment rate is 22.1% if the Bureau of Labor Statistics estimated unemployment rates the same as they did in 1994.

US Overestimates Job Growth.

Also see Flying Blind.

3 Responses

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  1. ittecon said, on May 11, 2011 at 7:26 am

    This Birth Death Model manifests itself similarly in GDP calculations, thereby overstating results.

  2. ittecon said, on May 11, 2011 at 7:30 am

    Here’s a related article at Daily Censored:

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