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All These Numbers Do Not Add Up (Photo: worldbank, flickr)
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So, you may have noticed that the November jobs report from the Bureau of Labor Statistics is out today (via CNN):
Hiring accelerated in November, and the unemployment rate unexpectedly plummeted to its lowest rate in nearly three years.
Employers added 120,000 jobs in November, the Labor Department reported Friday, marking a pick-up in hiring from October.
Meanwhile, the unemployment rate fell to 8.6%, the lowest rate since March 2009 and a significant decline from 9% just a month before.
Sounds great, right? Well not so fast there Bunky (from the NY Times):
Still, serious concerns remain about the economy’s ability to weather a potential meltdown in Europe.
American governments at all levels continued to bleed workers, for one. And the decline in the unemployment rate had a down side: It fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force. That left the share of Americans actively participating in the work force at a historically depressed 64 percent, down from 64.2 percent in October.
Even excluding these hundreds of thousands of dropouts, the country still had a backlog of more than 13 million unemployed workers, whose spells of unemployment averaged an all-time high of 40.9 weeks.
Think about that for a moment. There were 120K new jobs for November while 315K left the workforce because they had given up on finding a job. It takes nearly 100K new jobs each month just to maintain the status quo. 120K new jobs for the month, while positive, is still a pittance of what is needed. And more than 2 1/2 times the numbers of folks who got jobs left the workforce discouraged.
MSNBC notes that even the “good news” needs to be tempered as:
The average number of hours worked remained flat in November, while wages fell by 0.1 percent.
More than half the new jobs November were added by retailers, restaurants and bars. Retailers added 50,000 jobs, the sector’s biggest gain since April. Restaurants and bars hired 33,000 new workers. The health care industry added 17,000.
“The quality of jobs is not as great as you would like to see,” said Mark Vitner, a senior economist at Wells Fargo Securities. “A lot of the jobs were probably part-time positions and that is one of the reasons average hourly earnings fell.”
Besides the fall in the official unemployment rate from 9% to 8.6%, the U6 number as reported has also fallen for November from October’s 16.2 to November’s 15.6. I’m not at all sure how this can be unless the U6 has been undercounting folks (which is my supposition). Without having been undercounting people for both the U3 (official unemployment number) and U6 (un and underemployment along with ‘marginally attached’ i.e., those who have given up looking), it just does not seem like both U3 and U6 could fall for November when so many have left the workforce.
Wednesday (November 30), the LA Times had this opinion piece that seems to have a clearer perspective than the official number.
Yesterday’s weekly Initial Unemployment Claims report was back above 400K.
While my prediction of a double-dip recession by the end of the year (made back in June) may not happen quite as soon as I thought, the overall economy is still struggling and there are still millions of people wanting to work, without work available.
Meanwhile, Newt Gingrich apparently wants to make children the primary wage earners for their families.
And because I can:
Cross posted from Just A Small Town Country Boy by Richard Taylor
35 Comments
The U3 number for unemployment is nonsense in times like this. It doesn’t show the change in long-term unemployment, because the really long-term unemployed simply drop off the radar, so to speak.
I think it’s fair to say that for the last year or so we’ve been treading water, which is nowhere near what we need to be doing. Guesstimates of how many jobs are needed each month to keep up with increasing population vary from 90K per month to 120K. At best, there were a net 30K jobs added this month. At worst, none at all.
It’s also reasonable to expect that virtually none of those net jobs went to the long-term unemployed.
That’s why I linked to Dean Baker on the amount needed – he’s in the 90K camp (I just rounded it up a bit for convenience sake)
And all of what you said is why the numbers just don’t add up
Wonder how many went to young people flipping burgers ac McFastFood.
Dunno but that’s another group that isn’t even included in most “official” stats – the recent college grads drowning in debt from the classes of ’08 – ’11.
As is the CBO, which is where Prof. Baker gets his numbers from. My guess is that the CBO is lowballing it, since most of the new potential workers will be young. Typically, they need employment more than older folks.
Anyway, it’s fair to say that it’s in that range, and that we’re doing no better than keeping up with labor force expansion lately. With effects of the stimulus running out, and effects of austerity about to take hold, that’s not good news.
Why is the unemployment rate calculated from the number of Americans actively in the workforce? I know that 315,000 number is based on the phone survey used to calculate that percentage, but millions of people really didn’t just stop looking for work.
What is the true rate of unemployment if we kept those millions of people in the calculation?
The U6 number is supposed to reflect the Un and underemployed plus the “marginally attached” as I note in the diary – but that number also dropped from October to November (16.2 to 15/6) which is why I think it is also an undercount. My WAG as to the “true” number is probably somewhere in the 20 to 25% range but I have nothing other than a gut feel to back that up.
What, you expect those lying assholes when they lie to actually make the numbers add up???
That’s asking a lot out of lying assholes. They usually feel good about coming up with they lying numbers themselves. Actually making them add up might be a step too far for them.
Thanks for staying on top of this, dakine01.
Yeah, I know a bunch of lying shits run the place, but this one in particular one has really been pissing me off.
Month in and month out, the unemployment numbers keep getting just a tiny fraction better. Yeah, uh huh. Just like GE had 54 straight quarters or something of growth. Yeah, right.
Distorting reality seems to be job number one. But there’s so little (basically nonexistant) questioning of Commerce’s numbers, it’s beyond ridiculous.
Anyways, keep it up. Trees falling in the forest do hit the ground.
Doesn’t the Home Survey have a +- 400,000 confidence? so the number of unemployed dropped by 594,000 +- 400,000
The Establishment survey has a +- 100,000 confidence, so the number of new jobs was 120,000 +- 100,000
When you look at them together, I would say the best case scenario is unemployed dropped by about 220,000. Isn’t that a reasonable way to read the results? or am I totally off base on that?
I realize that the establishment survey doesn’t look at gains in self-employment or similar, which the Home Survey does, but I doubt the number of newly self-employed is that much of the now employed.
Or maybe just hang in there. At this rate, Commerce’s statistician’s should have U3 down to 5.0 % in 5 years at the most. Then it’ll be Happy Times Are Here Again, the best of all possible worlds.
Hugh, now over at Corrente provides what I think are credible analyses of what the true number of un- and under-employed is. His guesstimate this month is that there are roughly 20 million unemployed, and 9 or so under-employed.
It’s hard to tease out the true numbers, but they are certainly not the U6 numbers, either. The longer this depression goes on, the more that number is likely to be out of touch with reality.
Those confidence numbers are relative to the absolute numbers, not the changes. Assuming they apply to the changes as well requires that one assume there is no consistent source of error in the estimates. I think that’s unlikely.
You are totally off base on that.
It’s Xmas/election season folks, gotta have some good news real or imagined.
Thanks v. much for keeping up with this unmitgated lying POS crap. We all know that the unemployment figures are completely boooogus. I rarely ever listen to NPR anymore at ANY time (even my once favorite weekend programming seems to be now *infested* with rightwing slants), but the last time I had it on *briefly* some breezy idiot stenographer gargled out something about unemployment was definitely going down, un huh, fer sure.
Lotta b.s. but gives the fascist propoganda wurlitzer yet another way to complain that the OWS crowd are all just lazy assholes who “don’t feel like working.” Even trad-Dem voters drink this Kool Aid and promote the notion that there’s jobs a-plenty if you’re not some lazy jerk looking to suck at the govt ta-tas.
sheesh.
but, but, but every pundit and spokesmodel of the corporate media insists on telling the “public” this is very good news indeed. Why quibble over details and facts?
90k is ridiculous.
It’s a conservative estimate. Dean Baker uses it as it comes from the CBO number (see the link above in the post). CBO has it as .7 per cent annually which Baker figures as 1.05M per year, divided by 12 – I use it as even as a conservative figure, it shows how bad off we are
Because the pundits and spokesmodels are lying stooges. You can get the real deal on the “good” (hahahaha) job number here:
http://globaleconomicanalysis.blogspot.com/
Scroll down to the second topic. The job/labor situation is horrendous. If the people who have given up looking for jobs were still active job seekers, the U3 number right now would be well over 11%.
These statistics are honest, but they are extremely rough.
My take is that the economy is somewhere between scuffling along to improving ever so slightly.
At this point, an informed-intelligent person could peer into future and see promise or peril. Be wary of anyone who believes too strongly in their particular vision.
I tend to see peril as for the last year and a half, I’ve seen too many pundits and politicians trying to paint the rosy scenario, regardless of the information provided and most all of the “solutions” coming from either party have been more of the same shit in different packages
Do you have the number of people forced to accept SS because they can’t find work and are those numbers deducted from the Labor force ?
Is this a land line survey which would reflect older workers ?
I don’t know (other than some anecdotal evidence) the answer to either question but my WAG at the first is there are a lot of folks who have started SS at earlier than they originally wanted because of the lack of jobs.
I think they do account for cell phones now but I’m one of those older folks who only has a cell so its not just a young person phenomenon nowadays.
Both my brother and myself were forced to sign up for early SS this week because of the construction collapse.
We dropped our land lines years ago but that doesn’t mean the government changed it’s methods, if it would make their fairy tale numbers look worse.
Is the Newt going to pay the kids a minimum wage or is this just slave labor? Do the kids take jobs away from the unemployed?
I can’t find it now but there is an estimate of u/u at over 28m and if you add in people making below poverty wages the total is 44 million. Holy shit.
Found it. the number is 28 million at the end of November on http://www.njfac.org. and for those including earning poverty level wages the total is 46.6 millon.
Given the level of poverty in the country, I think we are losing the middle class.
90k means maintaining the percentage employed relative to the “civilian workforce” at 64 percent – and that percentage reflects the nonsense of no longer looking for work.
Better is the percent of the population that is employed as fewer games can be played with that number – and that number is around 58%. To get back to the Clinton level for that number of around 65%, doing it in 10 years, we need 1.4 million jobs for the recovery plus 1.1 million for new folks entering the work force – or about 200,000 a month.
This report is BETTER news than in the past (140,000 new private sector jobs) but the UE rate – 9.0 to 8.6 – drop was only 0.2 if adjusted for the over 300,000 that gave up looking but will come back once jobs are available.
Our financial news reporting media is rather poor.
Establishment survey and Household survey do not track each other for many reasons, but the bottom line is the results can not be combined.
confidence does not mean “most likely correct estimate” – the 120,000 is the actual, real, take it to the bank, most likely real number – the most likely estimate.
The estimate of how much error, positive or negative, gives a range of values that the “most likely” is in 95 times out of each 100 times we actually survey every single person in our target group and compare to our small sample’s results.
It does not mean we should subtract 400000 from the household number and make policy off that reduced number.
The math is from memory and by guesstimate with in the head rough division so don’t take the numbers to the bank – but they do give a solid feel for the size of monthly job growth needed – 200,000.
I’m having a senior moment it seems – 58% is percent of available workforce assuming everyone wanted to work. It is not percent of population.
Only 45.4% of ALL Americans had jobs in 2010, the lowest rate since 1983 – and that has not changed very much.
So since when is the shedding of thousands of government jobs each month a good thing? While the private sector may be creating some jobs (mostly lower paying if you note), those folks working for governments at all levels are also workers, in the work force.
If not 100K but 90K is needed, as papau said, in added jobs, to maintain the unemployment rate, then we can assume that one tic is 90K, and that adding 120K is a surplus of 30K. Add the 30K to the 315K or so leaving the workforce, is roughly 345K, close enough to the 360K job change needed to produce 4 tics, which accounts for the change between 9.0 and 8.6. So the media is indeed reporting on the “good news” that 315K people left the workforce.
As for the double dip, what’s not to be double dip? Europe is crashing and the whole world is trying hard not to admit it with a massive prayer to the confidence fairy and solemn austerity chants.