One does not need to be a rocket scientist to grasp the fudging the BLS has been doing every month for years now in order to bring the unemployment rate lower: the BLS constantly lowers the labor force participation rate as more and more people "drop out" of the labor force for one reason or another. While there is some floating speculation that this is due to early retirement, this is completely counterfactual when one also considers the overall rise in the general civilian non institutional population...
...In order to back out this fudge we are redoing an analysis we did first back in August 2010, which shows what the real unemployment rate would be using a realistic labor force participation rate. To get that we used the average rate since 1980, or ever since the great moderation began. As it happens, this long-term average is 65.8%...
It won't surprise anyone that as of December, the real implied unemployment rate was 11.4%... basically where it has been ever since 2009 - and at 2.9% delta to reported, represents the widest divergence to reported data since the early 1980s.
...And because we know this will be the next question, extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%, which should be just before the presidential election.
In other words, if the Obama Labor Propaganda Bureau (which is the name they prefer, I hear) used a reasonable labor force participation rate, the real unemployment rate would be:
To pull this off, they've been forced to use the lowest labor force participation rate that America has seen since... 1984. Which seems, eh, appropos.
As my wife asked the other day: "I wonder whose mortgage I'm paying when I clock in for work?"