Monday, February 13, 2012

Black unemployment rate drops more than 2 points to 13.6 percent

The black unempolyment rate dropped from from 15.8 percent to 13.6 percent.

Why ? Two reasons: 1) It's all about how you count the unemployed and 2) bad data sampling and measuring.

If we look at the raw numbers in the black population, they grew by 440 thousand. Yet the black labor force grew by only 96K. So an additional 345K people were dropped from the labor pool. Meanwhile an additional 477 thousand black workers found jobs. So a smaller labor force increase and big job growth mean the black unemployment rate gets a huge drop.

Second, a 2.2 percent change is huge in the statistical world. It means that either the data change randomly by a large amount or the measuring is not that good. If the sample size of blacks is small enough then even a little change would be reflected in the statistics.

Hidden behind the number are 11 million blacks that want to participate in the labor force but have dropped out. They are no longer counted.

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