The much awaited January unemployment report is released and from the headlines, one would think this is great. It's not.
The reason is the U.S. lost another 20,000 jobs. The employment-population ratio rose from 58.2 to 58.4 percent. This means while the ratio of the employed to unemployed improved, it is in part because there are more people added to the general population who are not being counted in the potential workforce or inversely, a decrease in the overall civilian workforce, which causes the ratio to increase.
Below are the total non-farm payrolls. The first is the raw numbers and the second is in percent change from the previous months report. In nonfarm payrolls one can see the real job losses that are still occurring this recession.
The revisions are another reason this not so great news.
The total nonfarm employment level for March 2009 was revised downward by 902,000 (930,000 on a seasonally adjusted basis), or 0.7 percent. The previously published level for December 2009 was revised downward 1,390,000
The revision on the increases in job losses means the U.S. lost 8.4 million jobs in this recession, when previously it was reported to be about 7.2 million (officially).
U6, the broader definition of unemployment, dropped to 16.5% from 17.3%. The long term unemployed is now 6.3 million.
The civilian participation rate is at 64.7%. Yet the civilian non-institutional population decreased slightly (this is not seasonally adjusted).
Those not in the labor force rose 409,000 and is now 2.5 million.
There are a host of revisions to data generally, going back to year 2000, but when both unemployment and employment decrease, there is something not quite right with this picture. To that end, let's look at something I never do, not seasonally adjusted non-farm payrolls.
The reason to look at this is because while the official unemployment rate went down, the not seasonally adjusted unemployment rate skyrocketed, to 10.6% from last months 9.7%.
Again, there are a host of adjustments to examine as to how one can have a decrease in the official unemployment rate yet continue to lose jobs, but the above is highly suspect for statistical strangeness. More on plotting seasonally adjust versus not in another post.