It is widely regarded as the most important barometer of them all, and fittingly, the monthly jobs report gets more attention and more coverage than almost all other economic data combined. Unfortunately, it is also broken.
That’s right. For all its stature, the payroll report (which will be released Friday) has a major flaw — and it’s a doozy. The headline unemployment rate is essentially a bunch of bunk.
The current 8.2% figure you hear about so often is wildly inaccurate and doesn’t fairly reflect the true state of the nation’s labor force. It’s a deficiency that Wall Street-types have long adjusted for with a wink-wink sort of acceptance, knowing full well that the so-called “U-3” headline number is actually a quagmire of exclusions and adjustments that under-reports the real situation by as much as 50%.
Read More: Yahoo Finance News