Bleak unemployment figures would be even bleaker if they reflected the true number of those out of work — and even official rates serve as evidence that the country is falling deeper into a depression, says author, investor and longtime Wall Street observer James Dale Davidson.
The Labor Department reported Friday that the economy added no new nonfarm payrolls in August, leaving the unemployment rate flat at 9.1 percent. It was the first time since World War II that the economy had a net zero jobs created for a month, CNBC reported.
A look at methodology shows that the government tweaks the size of the labor market in order to make unemployment figures look better than they really are, says Davidson, a columnist for Newsmax’s Financial Intelligence Report newsletter.
Furthermore, the economy needs to be adding hundreds of thousands of new jobs each month to really get the country moving along the road to recovery.
"There needs to be, or should be, an increase of 180,000 to 200,000 jobs monthly in order to keep the unemployment rate stable. That hasn't happened, and they're basically disguising that by reducing the labor force through statistical slight-of-hand," Davidson tells Moneynews.
Without such revisions, unemployment rates would find themselves "up much more in the double digits," Davidson says.
Officially, the country has emerged from the recent recession although high unemployment figures and weak economic growth and other indicators have many second-guessing the pace of recovery.
Some say the economy never truly emerged from the recession at all, and most would agree that the economy is not in full recovery mode.
"Normally when you think of recovery, if you think of it in an analogy of someone who is ill, recovery is when you regain your health not when you cease getting worse," Davidson says.
"If you look at the statistics, basically we are sort of bottom-bouncing along a very low level of output," he said.
"I think we are going into a deeper stage of the depression that started back in 2008. I think this is basically a depression."
While August jobs numbers may have been weighed down by a Verizon workers strike, they still paint a picture of an economy that is far from robust and virile than it was just a few years ago.
Businesses aren't going to hire when they don't know where the economy is going, economists say.
"Business confidence surveys have uniformly pointed to businesses who are not laying off workers, but who are holding off on hiring while they wait for a clearer outlook — an outlook that became much cloudier and more volatile" beginning with the debt-ceiling battle in July, says Ellen Zentner, senior United States economist for Nomura Securities, according to the New York Times.
Even if the United States doesn't fall into a recession, sunnier days are still far away.
“We’ve got at least another 12 months of difficulty to go through,” says Steven Ricchiuto, United States economist for Mizuho Securities USA, the New York Times adds.
“I know that doesn’t help politicians who are worried about the elections.”