Source: finance.yahoo.com

On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.

Each of these numbers — which come from a 39-page report filled with numbers — is true. But each of these numbers can be framed in various ways to tell wildly different stories.

One person can say the unemployment rate is 4.6%. Another person can look at the same report and say the unemployment rate is 40.3%.

40.3% unemployment rate ?!?!

Some folks might argue the “real” unemployment rate is 40.3%. But they are being a bit disingenuous with their calculation.

The 40.3% would be calculated by subtracting the employment-to-population ratio — which stands at 59.7% — from 100% of the US population over 16 (which the BLS terms the “civilian noninstitutional population”). This pool, however, includes 95 million people who are not actively looking for jobs and are classified by the BLS as not in the labor force. Many of these are retirees, the sick, stay-at-home parents, or full-time students, among other folks who may have reasons for not seeking work.

The 4.6% figure, considered the official unemployment rate, only considers those who either have jobs or are looking for jobs. In other words, 4.6% of the active US labor force does not currently have a job.

Critics argue that the 4.6% rate does not consider those who may want a job but have given up looking for work. There are, however, alternative unemployment rates that consider those who are discouraged or marginally attached to the workforce. (The “U-4” rate, which is unemployed plus discouraged workers, was 5% in November; the “U-6” rate, which is unemployed plus those employed part-time for economic reasons and those marginally attached to the workforce, was 9.3% in November.)

And the thing is, we could go on like this forever.

An informed interpreter of this report knows, however, the 40.3% figure can simply not be advanced as the “real unemployment rate” in good faith.

Fake news

In a political and media environment that has seen an obsession with fake news define the zeitgeist, the jobs report is worth considering as the beginning and end of this phenomenon.

The jobs report is tabulated each month by civil servants and spun as both gospel and heresy no matter the results.

Each month, markets sharpen their narrative knives for this monthly report, seeking to confirm or deny their pre-existing belief that the US economy is in good or bad shape. And every month, the jobs report delivers.

But the report’s fake news characteristics are not because it is published by teens in Macedonia, but because it is full of different “truths” that can be seized on to advance your agenda.

Consider that in 2015, President-elect Donald Trump called the official unemployment rate (the current 4.6%, which then stood at 5.1%) “phony” while touting other figures that ran as high as 42%.

And consider the above calculation of 40.3% as the “real” unemployment rate. If you wanted to affirm a view that the US economy is doing terribly, this would be a number to seize on. It would be a number that, again, you can find in the government’s own jobs report. It just would not say what you think.