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A confounding jobs report today shows that employers dropped 20,000 more Americans from the payroll in January, but the unemployment rate nevertheless decreased from 10% to 9.7%. This is about the worst way a jobless rate can decrease: by people leaving the job market en masse. The key stat:
In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers.
This basically means that a large chunk of people looking for work “left the work force.” It doesn’t mean they all discovered gold or won the lottery, but they simply stopped actively looking for a job and/or saw their unemployment insurance run out. They’re still hurting, they still have no income. They just aren’t “counted” anymore.
The employment numbers for November and December changed as well, revealing a rgood November and a really bad December:
The change in total nonfarm payroll employment for November was revised from 4,000 to 64,000, and the change for December was revised from -85,000 to -150,000. Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.
The “annual benchmark” is a reassessment of the entire year, which revealed around 930,000 more people out of work than previously thought. Other than November, every month was revised downward, with numbers much worse than before.
The report shows continuing pain in the job market, regardless of the baseline jobless rate.
…If there can be said to be good news in the report, it’s that “involuntary part-time workers,” folks who were getting part-time hours for economic reasons, dropped sharply. So employers have been converting part-timers to full-timers rather than hiring new workers. This is good for those part-time employees, and also good that more hours are being worked and the employed generally have more money, but it does little for the unemployed. In fact, with productivity up strong (in other words, businesses are getting more out of less workers by increasing their workload), job growth is simply unlikely in the near term.
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While working people are getting hit hard, purchasing of Congrescritters’ votes by lobbyists continues apace.
…but they simply stopped actively looking for a job and/or saw their unemployment insurance run out.
Considering we are entering the third year of the Bush Depression it is going to be more of the latter. I hate the way that gets downplayed in every news report.
As the BLS has moved to a new model, we will have to wait 2 to 3 months to see how accurate these initial numbers turn out to be as well as have numbers that are directly comparable to each other. Some of the current numbers don’t appear to add up like the part time for economic reasons and its subcategories.
Yes, everyone posts the current month number and not the revisions. What I’ve heard from experts is that this month will probably eventually show gains. But then at the end of the year that could get wiped out again with the annual benchmark. It’s not an exact science.
Do the average hours worked show this to be the case? At some point employers will run out of this ability and will have to start hiring again.
Meanwhile the diddlers in Congress are still feinting and diddling. Where is this “bipartisan” jobs initiative that the twin turtles (Reid and McConnell) are talking about?
Almost a million more discovered to be out of work last year than we previously thought?
Time for some direct federal or state or local hiring. We need to rebuild parks, rebuild roads, rebuild skating rinks. Time for some good old Keynesian dig-a-hole-and-get-another-guy-to-fill-it-up-again direct hiring. Teachers, teachers’ aides, teachers’ aides’ assistants, school office ladies, cafeteria guys, groundskeeper Willies. We need more hiring and we need it right away.
Don’t be afraid of make-work. Make-work is exactly what we need, and we need it yesterday.
Local news in my town this morning said that part of the data used to determine this new 9.7% figure was a survey taken of households. So, if the number is now going to be determined by polling, there must be a +/- factor of 4-5%.
I expect we will be seeing a constant drop in the official numbers since millions more people will be dropping off the unemployment rolls every month from here on. Pretty soon, we’ll be looking all better!
This reminds me of the revision from “Number of jobs CREATED by the Stimulus bill” to “Number of jobs AFFECTED/SAVED by the Stimulus bill.” Either way, this administration will manipulate everything they can in an effort to save some Democratic seats in congress this year.
Children go hungry but agribiz is fat and happy.
My neighbor can’t pay his mortgage, but Goldman Sachs gets bailed out.
There’s always money for Israel, but Detroit is falling apart.
The Pentagon budget gets ever bigger, but we still can’t win the wars.
No albuterol for her asthmatic child, but Billy Tauzin is always smiling.
There are two political parties, but voters have no choices.
It’s time for the media to change their reporting of the unemployment numbers and accurately state, “The rate of unemployed people who have not yet exhausted their unemployment payments is 9.7%”. The actual number of unemployed people in this country, though, is closer to 20%.
I’m beginning to wonder if there really are still 2 political parties in this country. It seems the R’s have recruited people to pretend to be D’s.
The sad thing is that despite the administration’s self-proclaimed “jobs focus”, no net jobs at all were added during the Bush years, and the United States has lost millions since the crash and Obama’s inauguration.
They don’t have a “jobs focus,” to be blunt. They’re basically saying that “nothing can be done about it,” and everybody’s just going to have to tighten their belts, and ride it out as best they can, for however long it takes, oh well, sorry. Chumps.
One of the factors that was very clear (to me at any rate) when Summers, Bernanke and Geithner commenced opining about the unemployment situation was that they were expecting that significant numbers of Americans would simply never be employed in the private sector again, probably never have a job working for someone else again. These were employment eliminations, not losses that could be regained if given enough time. This was a permanent shrinkage of the labor force.
The absence of any jobs programs (like Teddy Partridge and many others have suggested) during this economic meltdown also told me that maintaining high unemployment was policy. Of course it’s a problem for the unemployed, but it’s very beneficial for employers of all kinds. It forces down wages and benefits, and it increases the productivity of those who still have jobs. Those increases don’t go to the workers, though, they go to management and owners. Sweet.
This situation is liable to go on indefinitely, as those who have jobs and wish to keep them are squeezed more and more, profits rebound and rise, but overall, Americans are seeing a sharp and swift decline in incomes and living standards.
It’s all of a piece.
The outlines were very clear even before the Inauguration a year ago.
The household survey showed a large gain in employment, and the patter is that it leads the establishement survey at turning points. Some truth to that. However, the HH survey also show a decline in the civilian noninstitutional population. Don’t remember reading about a surge in imprisonments in January, but I wouldn’t rule it out.
Count the unemployed, Count the underemployed. Add up what they would be earning. That will probsbly be close to the loss in GNP of $2 to $3 Trillion. Thst is what krugman wants to spend on stimulus. But congress wants $150 billion the deficit is their logic as Rs are singing that song.
I wonder who is “counted” … any more.
Are we up to three percent yet?
Of course, we started at the “top”.
There are simply too many “others” to count;
besides, most of them are of no account.
Consider the economic term, “effective demand”, and then, ALL the numbers add up. Perfectly.
I bet the Supreme Court would agree with this a$$e$$ment.
DW
Economic assessments; how dismal, how grim, how devil-take-the-hindmost …
I do appreciate how YOU tie the intertwined realities into damned useful speculation, eCAHN.
DW
Well, at least we have one example of the Corps. hiring Americans!
BV$H? Who? He’s been put down the MSM memory hole. Were still @ war with East Asia!!
OK, that’s something I can believe. Forget where I read it, but the article I read about this this morning said that the U-6 rate was also down, which doesn’t make sense if Dave D. is right here. Even if he’s not right, it doesn’t make a whole lot of sense, unless millions of people have simply disappeared.
the whole thing’s a little squirrelly. I wrote this very early, and BLS moved around a lot of their numbers, but we could be seeing statistical noise, which will settle into something coherent in the next few months.
The jobs numbers are beyond bogus considering the fact that the BLS uses it birth/death model and this point was brought up again today via Trim Tabs, who as a company probably keeps better statistics than the government does.
TrimTabs Employment NewsFlash – February 5, 2010
Real-Time Tax Data Says Job Losses Much Worse than BLS Reports
TrimTabs’ Estimates 104,000 Jobs Lost in January, while BLS Reports Decline of 20,000
BLS Revises Job Losses Up Almost 500,000 in 2009, and a Whopping 930,000 in 2008
TrimTabs employment analysis, which uses real-time daily income tax deposits from all U.S. taxpayers to compute employment growth, estimated that the U.S. economy shed 104,000 jobs in January. Meanwhile, the Bureau of Labor Statistics (BLS) reported the U.S. economy lost 20,000 jobs. We believe the BLS has underestimated January’s results due to problems inherent in their survey techniques.
In addition to their regular report, the BLS published benchmark revisions to their employment estimates derived from an actual payroll count for March 2009. As a result, job losses from April 2008 through March 2009 were revised up a whopping 930,000, or 23% from their earlier revisions. In addition, the BLS revised their job loss estimates for 2009 up 617,000, or 14.8%.
According to the Canadian Gov’t's report also out today, there were 43,000 new jobs created in Canada last month. Sounds good. Then read the fine print. Only 1400 real full time jobs. The rest were part time McJobs, not paying enough for anyone to pay bills with. Is this how the US reports their numbers as well? How many of the “now off the unemployed list” were forced to take part time jobs that don’t pay? How many of these jobs were Temp Agency jobs?
yes, it looks like misinformation on part of the gov…the funny thing is that AP stories did not pick up on the reason for the decline. Just reported it with glee. Good post.
If you ever want a laugh, just seek out David Dayen’s most recent post on this site. The funniest ones are those wherein he links to and quotes from some piece of text, and then tries to explain what it means. He is never even close to being in the ballpark of what the text actually means. Funnier still, you can usually verify this yourself by simply following his own link and reading with just a modicum of care. This is a particularly humorous example of one of his “misinterpretations,” which I put in scare-quotes because this one, like some of his others, is so far off it can only be deliberate misrepresentation.
I’m referring to the first quotation from the unemployment report above, which he claims “basically means” that a lot of people got discouraged and stopped looking for work. Not even close. Let’s see what it really means, using information provided in the very link Dayen gives us.
If you’re unemployed in a given month, this can be because (a) you lost your job, or because, (b) you are new to the workforce (having just finished school, for example). Group (a) are those who are “unemployed due to job loss.” Within this group we can further distinguish (a1) those who lost a job that was (supposed to be) permanent, and (a2) those who were working at a temporary job which simply ended. Group (a1) are those who are “permanent job losers.”
Now, what is the passage Dayen quotes saying? Very simple, really. It says that last month the number of people in group (a) declined. Good news, of course: fewer people unemployed as a result of losing their jobs. The second sentence then adds that this decline consisted mainly of a reduction in sub-group (a1), i.e., there were fewer people who lost jobs that were supposed to be permanent. That sounds like rather good news, too. And it has nothing whatsoever to do with people ceasing to look for work.