Underworked government employees enjoying some time off after calculating the unemployment rate.

The monthy unemployment numbers were released yesterday. The U 3 number, which is the headline number, was reported as 8.6%. The economy added only 120,000 jobs, mostly in the low paying retail and services sector. Most economists believe the economy needs to create close to 200,000 jobs a month just to break even. So how did the unemployment "rate" drop?

It is easy to get the unemployment rate to drop when 315,000 stopped looking for jobs and 120,000 jobs were "created". Get three people to drop out of the labor pool for every one added and, BINGO, the unemployment rate will drop from 9.0 % to 8.6%. The U3 number is essentially taken by dividing the number of unemployed by the number of people in the workforce. If more people leave the labor pool than are hired the unemployment rate will drop. Only the government can come up with an unemployment equation like this that drives so much monetary and fiscal policy!

The real unemployment rate (U 6) is closer to 16%, but let the government and Obama spin these numbers any way they want. Millions of Americans are still unemployed, under-employed, working part-time instead of full-time, or have stagnating wages. Meanwhile, federal employees, including the President, congressmen, senators, and bureaucrats continue to live high on the hog.

The headline unemployment number is about as credible as the government's CPI number, which excludes energy and food price fluctuations. And it is just as credible as all the federal budget "cuts" the president and congress keep talking about.

The Obama jobs program is clearly working. If the work force keeps shrinking, the unemployment rate will soon reach historic lows. Keep up the good work, all you beltway blowhards and DC dodos. The stimulus is finally working. And a few more green initiatives like Solyndra will just be the cherry on top!