Tag Archives: Department of Labor

Job Numbers: Real or Manipulated?

Did you hear about last month’s surprisingly positive jobs numbers? While an elated Team Obama cheered, the startling jump caused others to speculate how a phone poll managed to extrapolate 800,000 found work when the business survey indicated only 115,000 jobs were created.

Were these numbers skewed? Former GE CEO Jack Welch tweeted out: “Unbelievable jobs numbers. These Chicago guys will do anything … can’t debate so change numbers.” He later stood by his tweet: “These numbers just don’t go with the economic activity.” Welch said. “You draw your own conclusions.”

Of course the Department of Labor  and its supporters bristled at the idea they might have falsified or stretched the data.

Economic Policy Institute President Lawrence Mishel told the Business Insider:  “It’s a shock to hear that anybody can think that these numbers were manipulated. Having followed these numbers for 25 years and knowing the people who put them out it’s absolutely bizarre…It’s outrageous. The data is based on surveys of tens of thousands of employers and households every month.”

But agree or not the total number of employed is now 3 to 4 million fewer than in 2009. For many it still feels like it’s a tough market.

Business News:”The nearly entire reduction in unemployment from its 10 percent peak in October 2009 has been accomplished through a significant drop in the percentage of adults participating in the labor force — either working or looking for work,” University of Maryland economist Peter Morici said.

How many families have had to accept lower wage or part time work while they wait for a change in the economy? And are these people adequately represented in the Department of Labor numbers?

Whether we believe the September job numbers are true or not there are still too many struggling to find permanent, full time employment. For them this new ad by Americans for Prosperity depicts a real life scenario.



First Time Unemployment Drops Again… But…

Like many I look forward to seeing the unemployment numbers released by the Department of Labor each Thursday morning. These numbers reflect individual’s initial filing for unemployment benefits. They are not indicative of new jobs. Job growth numbers come out the first Friday of each month (I also watch for this). Dropping first time unemployment numbers coupled with increasing new jobs results in lowered unemployment.

Many experts agree that if the first time unemployed numbers drop to 350,000 it will be a sign of a growing economy. Listening to some of the news reports one might expect that magic number is just around the corner. Here are a few headlines from today’s report:

NEW YORK (CNNMoney) — Fewer Americans filed for their first week of unemployment benefits last week, but any glimmer of good news was cancelled out as the Labor Department also revised last week’s figure higher.
About 387,000 people filed new jobless claims in the week ended June 16, down from the previous week’s figure, which was revised up to 389,000, according to the Bureau of Labor Statistics.

USA Today — Weekly applications for unemployment aid fell 2,000 to a seasonally adjusted 387,000, the Labor Department said. That’s down from an upwardly revised 389,000.

WASHINGTON (AP) – The number of people seeking U.S. unemployment benefits dipped last week but not by enough to signal a better month of hiring in June.
Weekly applications for unemployment aid declined by 2,000 to a seasonally adjusted 387,000, the Labor Department said. That’s down from an upwardly revised 389,000.

MSNBC — Jobless claims edge lower, remain elevated

Did you notice anything unusual?

They all, or at least most, note that this week’s lower number is being compared to a ‘revised’ number from last week. It first, it may seem innocuous, but as reported in May, in 59 out of the past 60 weeks the unemployment number was revised UP.  In other words, each week reporters stated that the new number was lower than the previous week. The initial numbers were always lower than the revisions. Isn’t that a statistical impossibility? How are these government estimators off the same direction each week? How many times can you flip a quarter and have it land on heads?

It is interesting to note that while the initial job numbers are big news each week the revisions rarely make headlines. So, what are we to make of this? Is our government purposely misleading citizens by underestimating numbers each week? Are they being more hopeful than realistic? Is this yet another political move geared toward the under-informed populous—those who catch the evening news and trust all that is reported?

What is for sure is that there are still too many companies laying off workers; too many skilled workers have taken part time or lower pay positions and too many workers who have given up and are no longer looking for jobs. The stimulus that promised to keep our employment under 8% may have staved off some government job cuts for a year or two but didn’t do much for the rest of us. We sure can use a jolt to the economy, something needs to change. And maybe then we’ll have some hope.

8.6% Unemployment is NOT Good News

To read the first paragraph of the Bureau of Labor statistics one might think that the jobs situation in the United States has improved significantly.

The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. Government employment continued to trend down.

In the detailed data section of the report, the picture becomes much less rosy.

120,000 new jobs were created according to the report. It has long been stated that growth of more than 240,000 jobs per month would be needed to get the unemployment rate to drop this dramatically. How is just 140,000 enough to lower the unemployment rate from 9.0% to 8.6%?  Far more jobs have been added in previous months and no such reduction in the overall unemployment rate resulted?

In September, the labor department reported 158,000 new jobs (which has since been revised up to 210,000 jobs). Why was there no .4% change in the unemployment rate in that month?

Also to note is that the number of long-term unemployed (jobless for more than 27 weeks) did not change at all – holding strong at 5.7 million which is 43% of all unemployed persons.

The only answer is that workforce participation must have drastically fallen and the report says as much. According to the BLS report, the civilian labor force participation rate declined by .2%. That can be interpreted to mean that half of the reported unemployment rate drop is due to people giving up on the idea of getting a job – at all.

In February, CDN reported the worst labor participation rates in 25 years at 64.2%. That was the only reason the unemployment rate dropped to 9% at that time. The new BLS report for November shows the participation rate at 64% – and another suspect drop in the unemployment rate is correlated.

Labor Secretary Hilda Solis purports that lengthening unemployment insurance has been successful and is the only answer:

We know what has worked: extending payroll tax cuts and unemployment insurance, and making smart investments in our economy. The clock is ticking. If Congress doesn’t extend emergency unemployment benefits for our long-term unemployed this month, 5 million Americans will lose their benefits next year. These are the everyday heroes of our recovery who have lost their jobs through no fault of their own. They spend all day, every day filling out applications, sending out resumes and looking for work. Now is not the time to turn our backs on them. They deserve better. They deserve action.

Joblessness, Jobs Numbers, Unemployment and other Confusing Government Statistics

Even the vice president isn’t sure how or if the tragically high unemployment rates will come down. Remember in April of 2010 when Joe Biden predicted that the American economy would be producing as many as 500,000 new jobs very soon.

I’m here to tell you some time in the next couple of months we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month..

It’s been over a year since those statements were made and for the first time were seeing something that at least approaches Mr. Biden’s lowest estimated growth. For April, the economy created 244,000 jobs according to a U.S. Labor Department report. A surprise to the up-side as forecasters had only been seeking a report with just 186,000 new jobs. Unfortunately for 13.7 million Americans, they are still unemployed – that figure remained unchanged in April.

There is a tale between the numbers. While private sector employment rose by 244,000 jobs, of which were 62,000 from McDonald’s recent hiring spree, the numbers of unemployed are actual getting worse. The national unemployment rate rose .2% to 9.0% and the governments U-6 statistic, which includes discouraged workers, grew to 15.9% from 15.7% in March. If the economy is creating all those jobs, how can more people be failing to find a job for themselves?

April Unemployment Graph

A Rueters analysis of the jobless report found some interesting items, but no real answer for the divergence between new jobs and an increase in the unemployment rate:

* U.S. retail employment posted a large gain of 57,100 jobs, though some economists were suspicious of seasonal adjustments due to a late Easter holiday.

* Construction employment remained anemic, with the sector adding just 5,000 jobs. The housing sector remains depressed and could be a further drag on growth in coming months, but it is now a smaller chunk of the overall economy, which in part mutes its negative effect.

* Surging energy and commodity costs were expected to discourage employers from taking on new workers but that appears not to have happened. The strong payrolls figure suggests business confidence remains strong despite a sharp run-up in energy costs.

* A decline in temporary help services jobs is hard to read. Generally, increases in temporary jobs are seen as a harbinger of future growth in permanent jobs.

*The breakdown showed big increases in professional and business employment — indicating a more broad-based improvement rather than in simply low-end jobs.

Some make the case that discouraged workers returning to the workforce that caused the rate to hit 9%, but the labor force participation rate did not change. That means that as a percentage of working age Americans, the labor pool did not increase in size over the previous three months and is still the lowest in 25 years.

The civilian labor force participation rate was 64.2 percent for the fourth consecutive month.[1]

That leaves an awkward, unexplained disimilarity between the Jobs report and the household unemployment survey. Then again, when looking at government statistics, and finding two sets that don’t agree .. you realize perhaps neither is the whole story.


[1] Bureau of Labor Statistics – Employment Situation Summary – http://www.bls.gov/news.release/empsit.nr0.htm

Jobless Situation Unchanged Since March – Real Analysis on the Unemployment Numbers

Oh the media.  Every outlet has been totally abuzz about the drop in initial jobless claims reported by the Department of Labor today.  It was only a reduction of 3,000 people, but that’s not where they failed to do their homework- the 450,000 number .. is THE SAME as it was back in March and before.  That means that things are not improving.  In fact, when compared to March numbers .. things are actually worse.

To prove the point, I pulled every report from the Department of Labor website since March.  Since today’s news was about seasonally adjusted numbers, I used the same screwy set of numbers to create this graph.

Weekly Unemployment Insurance ClaimsIn March initial claims were at 442,000 – yeah, 8,000 less than today’s report.  What’s even more surprising is that we actually reached the lowest number in July at 427,000.  Two months later and people are still filing initial claims at a rate of 450,000 a week.

Think about it, that’s NEW claims only and is around 2 million people every month that need help from the government .. that have not needed it before (initial claims).

Honestly, we are in a range of roughly 425,000 to 480,000 claims weekly and today’s report shows that it isn’t improving at all.  Stimulus spending has done absolutely nothing and the situation may actually be deteriorating.  If we don’t see seasonally adjusted, weekly claims drop below 400,000 soon .. another spike like the August nightmare of over 500,000 claims could be soon to follow.

Are companies still laying off?  Yes, today Fedex announced a 1700 person layoff due to a dismal forecast.  If one of the largest shippers is forecasting doom .. businesses must not be thinking about moving more inventory and filling more orders.

The government and the media are not showing you this.  The government needs you to spend and I have no idea why the media didn’t bother to research this.

Today’s numbers are no improvement and the next month or so will be telling.  Keep this chart bookmarked and revisit every time they tell you that things are looking up.  Of course, upward is relative and we are in quite a hole.