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This is a very strange jobs report from the Labor Department. The economy gained a paltry 36,000 jobs in January according to the report, which is far below expectations and a real disaster for the economy. Nevertheless, the topline unemployment rate fell 0.4% to 9.0%.
How does this happen? Well, January is always a month when the establishment survey gets revised. New population estimates get incorporated into the survey, and the seasonal adjustment factors get updated. So there is a difference in the January survey of 600,000 less unemployed people; that number is down to 13.9 million according to the BLS (Bureau of Labor Statistics).
Does this mean that those people got a job in this month? Not really. The employment/ population ratio rose slightly to 58.4%, and the labor force participation rate declined to 64.2%, the lowest rate since the early 1980s. Basically, the drop in the topline unemployment rate is entirely due to changes in the total population estimates and other adjustments.
The unemployment rate was 9.8% two months ago, and now it sits at 9.0% with very few jobs gained. The monthly revisions for November and December went up, with +93,000 in November and +121,000 in December. But those are underwhelming numbers, and January is even worse. Don’t be fooled by that topline number.
What’s likely to happen in the next few months is that job growth may accelerate (some are blaming the weather for the anemic job growth in January) but that topline rate will increase as well.
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David, the 600k fewer unemployed people was after you subtract the population estimate correction. So it was certainly not due to the population adjustment. If they applied the population adjustment last month (or any month before), the report would show the same 600k jobs created.
It also actually reflects 600k people going from unemployed to employed — the labor force did not change at all.
With food prices going up, gas prices going up,
and no one mentions this fact
“Most Americans are scratching and clawing and doing whatever they can to make a living these days. Half of all American workers now earn $505 or less per week.”
yes, americans are making less, and everything is going up
Fixed it for ya. No offense intended. Thanks for the post. The “report” is lying crap sent out to tranfix a credulous populace into believing in vaunted Reagancrapulous American exceptionalism. I call: bullshit!
Does the OFFICIAL rate count those who no longer are able to collect UI?
Wrong. I posted the link on morning swim. Read it for yourself.
Horse feathers!
Who needs a job, now that the stock market’s come roaring back!
/s
$26K per year? Where does that fact come from?
The critical statistic at this point is not the unemployment rate (U/work force), but the participation rate (work force/eligible population). The participation rate has been falling as people drop out of the work force because of lack of jobs in their area. Another statistic to watch is the age-specific participation rate by race and gender. Regional rates are also indicative of what is going on. These all paint a very bleak picture outside the plains states, which are benefiting from booming demand for farm produce and scarce supply of same.
Pardon the diary/blog whoring but here’s my rant on the topic
most of the econoic facts I used come from Economy In Crisis, people like Paul Krugman, Reich, etc.
who have been right 99% of the time
Did You Know
“Millions of Americans have been forced to take part-time jobs because that is all that they could get. The number of Americans working part-time jobs “for economic reasons” is now the highest it has been in at least five decades.”
Obama really can’t be proud that the GOVT. not real un-employment rate drop to 9%
I think Paul Krugman says the USA needs to create 140,000 Jobs per month to maintain normal growth
with GAS and FOOD prices going up, me thinks the USA Economy is going further down the toilet.
too many States and Cities are broke, huge state lay offs and city lay offs can’t be good for the USA Economy
FDR needs to be on Mount Rush More! NOW! you really never know how great a person is, until someone comes a long like OBAMA, who can’t say DEPRESSION and has no clue or any ideas on how to get the USA out of this DEPRESSION
Not at all. ericj115 should read your post. Thanks for the explanation.
The unemployment figure is bogus, need to look at population v. employment.
Total 16+ population
Jan 10 136m
Jan 11 139m
total non farm employed
Jan 10 127m
Jan 11 130m
flat
Oh, Fudge!
If y’all are watching these bankstas on CSpan you will get your shorts in a knot looking at that those fudged up numbers!
The UI and employment surveys are completely independent of each other. The employment survey contains 600,000 randomly, but demographically, selected households. Doesn’t matter what your UI status is, your chances of getting selected for the survey are completely independent of that.
So the simple answer to your Q is ‘yes.’
Soylent GreenLower Unemployment is people.Bernanke just said the other day that our economy will not be righted until employment gains and catches up. He does not see that happening for another 5 to 6 years.
The question is:
What are Americans supposed to do? We have nothing to fall back on. The banks and laws have our savings locked up/what’s left of it after their run on the money. UI Benefits only go so far and if you are not in the right week at the right time, you only get 36 to 52 weeks worth.
Where is Washington on this? What are the people supposed to do?
As my father the math teacher always said, “Figures don’t lie, but liars figure.”
“What are the people supposed to do?” If you’re not a millionaire? Fuck off and die.
The rich got their tax cuts, the 99ers got zip. Let them eat cake!
It’s magic!
Anyone know what the, ya know, real unemployment rate is? Gotta tack on several points for underemployed, given up looking or fallen off the rolls for some other reason.
Oh, I see. I Googled your quote and found the source.
Most times average income is reported as mean average.
Your use of “Half of all American workers now earn $505 or less per week” describes the median.
Whereby one unemployed guy off-sets Bill Gates.
Which is not to say it’s wrong, just differently reported that I’ve seen before.
Alan, I am always baffled by how the un-employment rate drops, when STATES and CITIES are laying thousands of people off.
but . . . but . . . but, I read a MarketWatch headline yesterday touting American productivity. Productivity increased by 2.6% in December!!! Amazing how productivity increases despite a smaller and more captive workforce!
16.1%
David Dayen has another fresher cross-post available: NYT Story on Obama Administration Negotiations with Egypt Painfully Thin
The detailed table is here. The government contribution is toward the bottom, so you have to scroll down.
Well wonder if this might account for some of the rate drop. From the Ddays BLS link.
Here are a couple of sentences that seem to explain it to me.
and
IOW, the updated population estimates lowered the whole unemployment rate trajectory by about 0.4 percentage points, but the new population estimates were not applied to historical data. So the unemployment rate, according to the new pop ests would not have been 9.8% at its peak, but somewhat lower. The same ‘dicontinuity’ would also apply to the U-6 measure, found here.
Thank you for that simple explanation and understand how they apply and use it in the data so much better…it’s much appreciated.
As far as Obama and the rest of that ilk is concerned, these irresponsible serfs can go to hell.
You’ll note there is no sense of urgency among the lot of ‘em. Compare that to the sky is falling scenario when they demanded banks get bailed out!
“…These all paint a very bleak picture outside the plains states, which are benefiting from booming demand for farm produce and scarce supply of same.”
It is actually bleaker for the plains states than the somewhat rosy picture painted by the talking heads. Very often they use states like Kansas or Nebraska as examples of low unemployment, great life, etc. but they refuse to look closer at what the numbers are based on. Take Nebraska for example, (and using data from the Census Bureau):
http://quickfacts.census.gov/qfd/states/31000.html
Using rough illustrative numbers from that charts, there is a population of 1.8 million people, 800K are working in non farm jobs. [if you live in what is properly called a metro area, your town has a larger population than does this whole state. There are 52K non farm employer establishments to take on those 800K people. Good prospects for low unemployment.
(The farm jobs may or may not get counted as part of the unemployment picture, it depends on the state, some will not allow you to collect unemployment if you lose your job at a farm that employs 10 or fewer non family members. Additionally, like small business owners, farm owners may not qualify to collect if their business goes under.)
So far so rosy, ehh? Not so fast. It should follow that with such a good prospect for jobs, etc. Life should be doing okay. Yet we see that almost 11% of the population is living below the poverty line.
Lonnnnnnng hours of back breaking work and still part of the wage-slave working poor.
Anecdotal data:
I start work February 7. Last paycheck was in June 2007. Some consulting work for a start up that failed since then, was “paid” in pre-IPO shares – no realized pay.
I don’t think I’ve been counted as part of the labor force for some time – I did not qualify for unemployment insurance at any time.
I’m really pleased to be back in the labor force at an established ($6B market cap) company. I’ll be doing work that I really enjoy and am very competent to do.
Looking at the report:
Labor force decreased for all levels of educational achievement
No HS diploma: 11,773,000 fell to 11,437,000 (326,000)
HS graduate: 38,231,000 fell to 37,747,000 (484,000)
Some College: 36,763,000 fell to 36,701,000 (62,000)
Bachelors or above: 46,310,000 fell to 46,288,000 (22,000)
Some of the drop is baby boom retirement.
Congrats on your new job!! I’ve been unemployed since Sept. 2008. No prospects anymore. Oh well.
You can play with statistics and numbers all you want but the bottom line is that tens of millions don’t have work. Tens of millions work part time when they used to work full time. Tens of millions got a pay and benefits cut. Tens of millions work at a low paying shitty job when the used to have a good job. Tens of millions have lost their homes. Tens of millions have lost their health insurance and pensions.
And the government isn’t doing squat about it.
U6 rose from 16.6M in Dec to 17.3M in January, an increase of 700K. Largely, according to BLS, these are people who are available to work and would work but “haven’t sought employment in the last 4 weeks”.
I had 20 different on site interviews in 2010. Lots of possible jobs, kept getting told I was a finalist, then told they went with another candidate. 2009 was a much worse, only 4 on site interviews and decent prospects were coming up about 2 times in each quarter.
I was able to almost make ends meet by depleting savings, some day trading, some tutoring of college math. Still ended up bankrupt, but that leaves me in pretty good shape going forward – I keep my house and will start to have savings again in a year or two (I’m going to pay family members back even though the debt is legally discharged. Banks are SOL).