The April 2010 monthly unemployment figures are out. The rate increased to 9.9% and the number of jobs gained is 290,000. How the rate can increase when the U.S. gained that many jobs will be answered below.
Nonfarm payroll employment rose by 290,000 in April, the unemployment rate edged up to 9.9 percent
Below is the nonfarm payroll, seasonally adjusted:
The civilian labor force participation rate increased 0.3%, to 65.2% as did the employment to population ratio, up 0.2% to 58.8%. That means there are more employed people to the civilian non-institutional population, as a ratio, than last month. That's a change (see graph below).
The labor force increased 805,000. Of those who entered the labor force, 195,000 were re-entrants. Then labor force newbies increased by 34,000. The changes of the civil labor force for employed was 550,000. The changes for those unemployed was 255,000. Since that doesn't match the unemployment rate overall, (which would give an employment rate of 725,000 instead of 550,000), obviously most of those who entered the labor force are looking for work. On just the labor force changes for April, it gives an unemployment rate of 32%, so clearly people came out of the woodwork in hopes some damn jobs are now available.
Those not being counted or those not in the labor force dropped 635,000.
The first thing you probably want to know is how many of those jobs are Census workers? The report claims 66,000 of the above jobs are temporary Census workers.
- Long term unemployed - up 169, 000 to 6.7 million
- Forced Part Time - 9.2 million
- Marginally attached to the labor force - 2.4 million
Of the Marginally attached, 1.2 million are discouraged.
U6, or Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force, (table A.15), increased to 17.1%. That's not good. Then 45.9% of the official unemployed have been so for 27 weeks or longer.
There were 26,200 temporary jobs added in addition to the 66,000 Census workers. One needs at least 100,000 and some estimate up to 300,000 permanent full time jobs, added each month to keep pace with U.S. civilian workforce population growth. That's not general population, that's the group needing a job. To even get back to pre-recession unemployment rate levels we need a good 400,000 jobs created each month.
So, how did the unemployment rate tick up? Because more people are being counted as looking, re-entering the workforce and the population increased. Below is the graph of the civilian non-institutional population, which is the largest super-set of the potential labor force, larger than the civilian workforce, due to those who are not looking for work, retired and so on being counted in this figure. It increased this month by 170,000. Then, those being counted increased 805,000, as amplified above. Unemployment is a percentage, a ratio.
In looking over table B1 we can get a little more detail on what kind of jobs were created (and lost) on the permanent jobs front.
- Financial: +3,000
- Information: -3,000
- Construction: +14,000
- Manufacturing: +44,000
- Mining & Logging: +7,000
- Health and Education: +45,000
- Leisure and Hospitality: +45,000
- Professional & Business Services: +80,000
- Trade, Transportation, Utilities: -3,000
- Retail Trade: +12,400
- Government: +59,000
You probably also want to know the birth/death model. What is that? It's a statistical adjustment to compensate for new businesses and dead businesses who are not actually tallied by data reports. Those jobs created and died outside the statistical reporting time window due to lag. So, the BLS estimates how many jobs can be attributed to those firms which are not actually counted. This month's adjustment was 188,000 jobs. Now one cannot directly subtract the birth/deal model monthly numbers, because unemployment data is seasonally adjusted, yet the birth/death adjustment is not seasonally adjusted, get that? Anywho, jobs attributed to new and dead businesses are just an estimate in so many words. Yet, if you look at the data, knowing full well small businesses died on the vine in droves this recession, well, something doesn't smell right. Also, consider comparing to the 32,000 private sector job creation ADP report. Subtract off 59,000 government jobs and one gets a strong mismatch of 231,000 vs. 32,000 from the ADP report.
The average work week flat lined, an increased of 0.1 hr. to 34.1 hrs/wk. Average earnings (drum roll please), increased a penny.
There were also two revisions:
The change in total nonfarm payroll employment for February was revised from -14,000
to +39,000, and the change for March was revised from 162,000 to 230,000.
Here is the original uenmployment report for March.
There is much discussion on the discrepancies between the Household and Establishment survey. The BLS has released Employment from the BLS household and payroll surveys: summary of recent trends, which point to sampling error, in particular, the population growth. Also, workers off the books, in the underground economy, maybe included in the household survey.