BLS Unemployment Report

Employment Stats Misleading

The payroll jobs report for November from the Bureau of Labor Statistics says that the US economy created 203,000 jobs in November. As it takes about 130,000 new jobs each month to keep up with population growth, if the payroll report is correct, then most of the new jobs would have been used up keeping the unemployment rate constant for the growth in the population of working age persons, and about 70,000 of the jobs would have slightly reduced the rate of unemployment.

New York Post Claims Census Falsifies Unemployment Figures

The New York Post is reporting an absolute bombshell story if true.  They claim the September 2012 unemployment report was manipulated and survey data was faked, just in time for the election.  The story quotes anonymous sources, insiders from the Census Bureau who claim to have falsified survey data for the unemployment report.

Jobless Benefits DO NOT Cause Unemployment

The Wall Street Journal's headline asks, "Are Jobless Benefits Leading to Higher Unemployment?"  But in the very first paragraph in their story they answer their own question with A new paper from the Federal Reserve Bank of Boston suggests the answer is no -- or at least not much.   So then, why does the WSJ ask? Why not just use the headline of this post?

A Peek into the Employment Report Establishment Survey

The BLS establishment survey doesn't get much press love or headline buzz when it comes to the monthly employment statistics, despite the survey's better accuracy than the population survey. For the past year, 1.899 million payroll jobs have been added and payrolls now stand at 132,821,000. From a year ago this is a 1.5% increase. The below pie chart breaks down March 2012 payrolls by major industry's percentage of total employment.

ces march 2012 size

About Those 1.252 Million People Who Dropped Out of the Labor Force

evildoerThe January unemployment report created quite a stir. Many believed the BLS had simply dropped 1,252,000 people out of the labor force, discarded like trash. Is the BLS an evil doer as so many declare, or could the culprit possibly be the 2010 Census?

We already showed how comparisons between December and January cannot be done due to the incorporation of the 2010 Census data and the yearly population controls, benchmarks and seasonal adjustments incorporated into the January unemployment statistics.

While there is no mythical 1.252 million dropping out of the labor force, there are some highly unusual numbers in the BLS population controls.

The BLS starts the January month with revised population estimates, seasonal adjustments and benchmarks. This year the 2010 Census data was also incorporated into the BLS statistics. They do not go backwards in these revisions. The BLS does not backwards adjust December 2011. Here are the BLS population controls for 2012:

Wow! 243,000 New Jobs Created in January

The headline number from the Unemployment Report this morning showed 243,000 jobs were created, more than the highest estimated increase by any of the economists surveyed before the report was released (the average expected increase from the economist survey was 120,000 jobs). The unemployment rate fell to 8.3%, again lower than predicted, and certainly good news for President Obama. Job growth was nearly across the board – in retail, construction, manufacturing, business services, and the hotel and restaurant industry. You can believe all this if you want, or you can go into the details in the report for some interesting context.

First, ever since the credit crisis of 2008, there has been a trend in the unemployment report that shows a declining participation rate in the job market. While a whopping number of jobs were created in January, a far larger number of people left the labor force - 1,752,000 in fact. The percent of the total working population who did not have jobs rose to 36.7%, an all time high. It’s no wonder the unemployment rate fell, when the denominator shrinks so markedly. The total number of people employed fell by 737,000. So what do you want to celebrate – the 243,000 who got jobs, or the million or so people who dropped by the wayside and are no longer counted in the data?