The U.S. unemployment rate really stands at around 17 percent if discouraged workers fed up with fruitless job searches were included in the labor participation rate, said billionaire real estate mogul Donald Trump.
The headline unemployment rate came in at 8.1 percent for August, according to the latest government data, though that rate measures the number of workers in the labor force who are currently out of work but are actively looking for jobs.
Those workers who have grown frustrated with sending out resumes or filling out applications to no avail and have quit actively seeking employment and are not counted as part of the labor force.
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
If they were, the percentage of people officially deemed unemployed would be double what the government says it is.
“The real unemployment number is over 17 percent,” Trump told CNBC.
“When you add back the tremendous numbers of people that gave up looking for jobs and all of the other things they do to manipulate them, you’re not talking about 8.2 percent, you are taking about the real number being over 17 percent.”
Official unemployment rates have refused to dip below the 8 percent mark, making creating jobs a priority for policymakers everywhere.
The Federal Reserve recently said it would spend $40 billion a month buying mortgage-backed securities from banks, a monetary policy tool known as quantitative easing that pumps liquidity into the U.S. financial system to push down long-term interest rates and encourage investing and hiring.
The move follows two previous rounds of quantitative easing, in which the Fed pumped a combined $2.3 trillion into the economy since 2008 buying mortgage-backed securities as well as Treasury holdings from banks.
Side effects to such policies include a weaker dollar, rising stock and commodities prices as well as mounting inflationary pressures down the road.
Other noted investors say the decisions mark Fed Chairman Ben Bernanke’s desire to lower jobless rates to around 6 percent even if it means applying inflationary pressures to get there.
“[Bernanke] is breaking the link between monetary policy and inflation,” Axel Merk, president and CIO of Merk Investments and a Moneynews contributor, told Yahoo.
“He is tying monetary policy to the unemployment rate, which means that he is going to do anything he can to push up growth, which means he is going to disregard inflation.”
The Federal Reserve adheres to a dual mandate to keep prices stable and unemployment rates optimal.
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
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