Gallup: Unemployment Rate Spikes to 9 Percent

Friday, 17 Feb 2012 11:21 AM

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The U.S. unemployment rate rose to 9 percent in mid-February, up from 8.6 percent at the end of January, according to the Gallup polling firm.

The numbers suggest official unemployment rates — which came to 8.3 percent in January — are due to climb.

"The mid-month reading normally reflects what the U.S. government reports for the entire month," Gallup reports.

"Gallup's mid-month unemployment reading, based on the 30 days ending Feb. 15, serves as a preliminary estimate of the U.S. government report, and suggests the Bureau of Labor Statistics will likely report on the first Friday of March that its seasonally adjusted unemployment rate increased in February."
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Seasonal factors accounted in part for the increase.

The official unemployment rate dropped in January as the economy added a net 243,000 nonfarm payrolls.

Experts point out that falling unemployment rates don't reflect the gravity of the labor market.

The government does not include those who have quit looking for work as part of the labor force, which keeps the headline unemployment rate low.

Fed Chairman Ben Bernanke has admitted that unemployment rates remain unacceptably high.

"It is very important to look not just at the unemployment rate," Bernanke told a congressional hearing recently, as reported by Bloomberg.

"The 8.3 percent no doubt understates the weakness of the labor market in some broad sense."

The Federal Reserve operates under a dual mandate — control inflation and keep unemployment rates stable.

"Weakness in the labor force is frustrating to the Fed, which needs to see broadened participation from labor in this recovery," says Eric Green, chief market economist at TD Securities, according to Bloomberg.

"What the Fed wants is the real stuff. They want unemployment falling with the labor force rising."

Editor's Note: Economist Warns: 50% unemployment, 90% stock market drop, 100% inflation.
See the Evidence. Click Here to Watch the Aftershock Survival Summit Now.



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