Posts Tagged ‘unemployment’

Factoids: The state of the economy …

September 21, 2012

The economic analyses done by Mort Zuckerman at US News are always laden with cold facts.

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Read the article for the prose. Here are the factoids:

  • Annual wage increases have dropped to an average of 1.6 percent, the lowest in the past 30 years.
  • A Census Bureau analysis  indicates that median income in 2011 had fallen to $50,054, the fourth straight year of decline.
  • Layoff announcements have risen from a year ago and hiring plans have dropped dramatically.
  • 5 million people have now been out of work for 27 weeks or more. That’s roughly 40 percent of the unemployed.
  • The average period of unemployment is close to 40 weeks.
  • Fewer Americans are at work today than in April 2000, even though the population has grown by 30 million people since then.
  • Older people are not leaving the workforce at the same rate as in the past … employment in the age group of 55 and older is up 3.9 million, even as total employment is down by five million.
  • The so-called quit rate has sagged to the lowest rate in years.
  • Young workers now face double-digit unemployment and job prospects for young workers aren’t very good.
  • As a result, the birth rate has just hit a 25-year low of 1.87 births per woman. And
  • Of jobs that have been added, more than 40 percent of new private sector jobs are in low-paying categories such as leisure and hospitality, bars, and restaurants
  • Millions of people who had good private sector jobs are now dependent on the government for life support.
  • Roughly 15 percent of the population, a record, representing over 46 million Americans, are in the food stamp program, compared to the 7.9 percent participation from 1970 to 2000.
  • A record 11 million-plus Americans are now collecting federal disability checks. Half of them have come on board since President Barack Obama took office.

Sure doesn’t look like we’ve turned the corner yet.

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Sorry to harp … but, the streak continues

September 7, 2012

Some loyal readers have suggested that I get off this case … That I’ve made my point.

I promise that I’ll stop writing about BLS reporting bias when the streak ends.

Now we’re up to 77 out of 78 weeks — and, at least 18 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on yesterday’s BLS report, the number for the week ending August 25 was revised upward from 374,000 to 377,000.

In itself, the 3,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or 3k …  or .8% to your prelim forecast !

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About the 4.5 million jobs that Obama has (or has not) created …

September 6, 2012

The Dems are touting 4.5 million jobs created by President Obama.

CNN says that the number  is an accurate description of the growth of private-sector jobs since January 2010, when the long, steep slide in employment finally hit bottom.

But – and it’s a BIG but — while a total of 4.5 million jobs sounds great, it’s not the whole picture.

According to CNN:

Nonfarm private payrolls hit a post-recession low of 106.8 million January 2010 … The figure currently stands at 111.3 million as of July.

While that is indeed a gain of 4.5 million, it’s only a net gain of 300,000 over the course of the Obama administration to date since the private jobs figure stood at 111 million in January 2009, the month Obama took office.

And total nonfarm payrolls, including government workers, are down from 133.6 million workers at the beginning of 2009 to 133.2 million in July 2012. There’s been a net loss of nearly 1 million public-sector jobs since Obama took office, despite a surge in temporary hiring for the 2010 census.

Meanwhile, the jobs that have come back aren’t the same ones that were lost.

According to a study released last week by the liberal-leaning National Employment Law Project, low-wage fields such as retail sales and food service are adding jobs nearly three times as fast as higher-paid occupations.

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Unbelievably, the streak rolls on: BLS under-reports initial unemployment claims … again!

August 31, 2012

Am I the only person in the world to to think this is nuts?

Media sure isn’t reporting it …

Now we’re up to 76 out of 77 weeks — and, at least 17 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on yesterday’s BLS report, the number for the week ending August 17 was revised upward from 372,000 to 374,000.

In itself, the 2,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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* * * * *

Almost forgot … the preliminary unemployment claims for the week of Aug. 25 are reported even vs. the Aug. 11 preliminary number and up 2K vs the revised Aug. 18 number.

In other words, no indication that a corner has been turned.

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How does the unemployment rate impact starting salaries?

August 29, 2012

Answer: Starting salaries tend to drop & to 8 percentage points for each percentage point increase in the unemployment rate … and it can take up to 15 years to get back to “normal” levels.

Lisa Kahn, a Yale School of Management economist analyzed government data  during and after the deep 1980s recession.

She  found that for each percentage-point increase in the unemployment rate, those with the misfortune to graduate during the recession earned 7% to 8% less in their first year out than comparable workers who graduated in better times.

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The effect persisted over many years, with recession-era grads earning 4% to 5% less by their 12th year out of college, and 2% less by their 18th year out.

For example, a man who graduated in December 1982 when unemployment was at 10.8% made, on average, 23% less his first year out of college and 6.6% less 18 years out than one who graduated in May 1981 when the unemployment rate was 7.5%.

For a typical worker, that would mean earning $100,000 less over the 18-year period.

Source

Takeaway: High unemployment rates isn’t just somebody else’s problem …

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The streak rolls on: BLS under-reports initial unemployment claims … again!

August 27, 2012

Still again …

Now we’re up to 75 out of 76 weeks — and, at least 16 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on last Thursday’s BLS report, the number for the week ending August 17 was revised upward from 366,000 to 368,000.

In itself, the 2,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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* * * * *

Almost forgot … the preliminary unemployment claims for the week of Aug. 18 are up 6K vs. the Aug. 11 preliminary number and up 4K vs the revised Aug. 11 number.

In other words, no indication that a corner has been turned.

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>> Latest Posts

The streak rolls on: BLS under-reports initial unemployment claims … again!

August 10, 2012

I can post this post on auto-generate, I guess …

Now we’re up to 73 out of 74 weeks — and, at least 14 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 28 was revised upward from 365,000 to 367,000.

In itself, the 2,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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* * * * *

Almost forgot …

The 4-week moving average of initial unemployment claims bumped up 2,250 to 368,250 … suggesting that the corner hasn’t been turned yet.

“Our plan worked” … say, what?

August 7, 2012

A picture is worth a thousand words.

So, here’s a picture.

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Source: AEI

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Re: Unemployment … this chart says it all

August 2, 2012

There are a lot of of confusing – and sometimes misleading – numbers thrown around to characterize the state of the employment market.

As we’ve been harping the past several weeks, the BLS has been consistently underreporting the weekly unemployment claims numbers that get headlined on the news – only to revise them up quietly the following week.

Similarly, there are lots of questions about the BLS’ seasonal adjustment factors … which sometimes cause more variance than they explain.

Finally, there’s understandable confusion about the reported unemployment rate and the labor force participation rate.  Since the latter has been going down, the former benefits – i.e. there are fewer unemployed people because some (or many) have left the work force.

The St. Louis Fed published a chart that puts the factors into perspective.

The chart is brilliant in its simplicity.

It simply plots the percentage of the able-bodied population who are employed.  The difference to 100% is the percentage of able bodies that either choose not to work or can’t find jobs.

What it shows: prior to the financial crisis, about 63% of able bodies had jobs.

The rate fell quickly to about 58.5% and has – save for some statistical noise – hasn’t budged despite the trillions of  fiscal and monetary action.

In other words, about 1 in 20 (the difference between 63% and 58.5%) able bodied folks who used to work, aren’t employed now … and the trend isn’t good.

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No job? Maybe you’re just disabled …

July 10, 2012

According to OBD

More workers joined the federal government’s disability program in June than got new jobs..

The economy created just 80,000 jobs in June … also during June, 85,000 workers left the workforce entirely to enroll in the Social Security Disability Insurance program.

While the economy has created 2.6 million jobs since June 2009, 3.1 million workers signed up for disability benefits.

In other words, the number of new disability enrollees has climbed 19% faster than the number of jobs created during the sluggish recovery … even after accounting for people who left the disability program because they died or aged into retirement.

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Also in June, almost 275,000 put in applications for disability benefits.

Experts say that more people try to get on disability when jobs are scarce.

You think ?

My question: given the ever tightening OHSA regs, how could the workplace have gotten so dangerous?

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What are you going to believe, the facts or our rhetoric?

July 9, 2012

Reported by Chris Moody of Yahoo News

When the Bureau of Labor Statistics announced the nation’s latest national employment last week, the Obama administration stressed that people should not “read too much” into the data.

Mitt Romney’s campaign pounced, and flagged the fact that the White House has repeated that same line nearly every month since November 2009.

See below for the roundup of articles from WhiteHouse.gov that Romney’s campaign posted on its site. In many of the posts, the authors for the administration do acknowledge that they repeat themselves:

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK:)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.”

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.”

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.”

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.  It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.”

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”

In other words, it’s important not to read too much into the Obama administration’s past 3-1/2 years of performance.

So much for accountability …

Thanks to SMH for feeeding the lead

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Flashback: Why private sector jobs won’t be coming back any time soon

June 5, 2012

The chickens came home to roost last Friday when the BLS had to gulp and (1) revise downward March and April jobs data, and (2) boost their count participants to the job market — the statistical aberration that was making the unemployment rate look like it was going down

Last Friday’s dismal jobs report shouldn’t have been much of a surprise to loyal readers.  As we’ve said often,  CEOs are dismayed by Team Obama’s economic, regulatory and pro-union policies and won’t do any serious hiring while Obama is in power. Period.

For the record, the Homa Files pitched this case over 2 years ago in a post titled: “Why private sector jobs won’t be coming back any time soon … Hint: it’s called passive aggressive resistance” … the punch lines:

Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.

More likely, they will let unemployment continue to creep along, and will slow roll the process of rehiring.

Corporate chieftains will sit back and watch the President squirm and spin his “4 million jobs – saved or created”. As Rev. Wright would say “the chickens will have come home to roost”. Passively aggressive resistance at its very best.

Unfortunately, that means we’ll be seeing high unemployment for some time – at least through the 2012 Presidential elections.

The full original post is worth another read !

* * * * *

Ken’s current take:

Certainly there won’t be any meaningful hiring until the 2012. elections are in the book.

CEO heels are dug in. I’ve heard cocktail party chatter like “Each job added is a vote for Obama … Fool me once, shame on you … fool me twice, shame on me”

CEOs started to relent a bit when the Congress tilted GOP and Obama extended the Bush tax cuts. (Whatever happened to Immelt’s job creation task force?)

But, recent moves – e.g. stopping Boeing’s move to South Carolina, stumping again for higher taxes, especially on off-shore profits – have more than offset any momentum.

We’ll be stuck with unemployment in the 8s until 2013 … or until there’s a substantial policy roll-back .

And, the latter just ain’t gonna happen …

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Book cookin’ alert …

June 1, 2012

The BLS reports May’s unemployment number at 8:30 this morning.

If the headline is “Unemployment rate clicks down to 8%” … I’ll scream.

You may remember that job growth was anemic last month (under 125,000), but the unemployment rate dipped to 8.1% as more than 350,000 quit looking for jobs.

In advance of today’s BLS report …

The Commerce Dept revised down its Q1 GDP estimate to 1.9% … … its original report a month ago was an increase of 2.2%.

ADP reported 133,000 new jobs … after revising its prior month estimate down by 6,000.

Gallup’s mid-May unemployment rate rate hovered around 8.2%.

And, unemployment claims for last week increased by 10,000 … after revising the prior week’s claims up (of course).

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My bet: miraculously, the unemployment rate will stay constant at 8.1% … though every other piece of data says it it should bump up.

We’ll see.

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What’s up with women leaving the labor force ?

May 14, 2012

Last week, we were fast out of the blocks posting about the drop in the labor force participation rate: How to make 11% unemployment look like 8.1% 

The essential points raised:

  • Since President Obama was inaugurated, the U.S. working age population has increased by roughly 8 million people.
  • During that same period the U.S. labor force – folks either holding or looking for jobs – stayed roughly constant at about 154 million.
  • So, it arithmetically follows that the labor force participation rate declined … from about 66% to 63.5%

Here’s the money chart from last week’s post:

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* * * * *
The long view

Some analysts have seized on the fact that  324,000 Women Dropped Out of Labor Force in Last Two Months.

Are women really leaving the labor force in droves? ?

Let’s start with the long view:

Back in 1960, women’s labor force participation rate was below 40%.

Over the next 40 years, it bumped up about a point a year, hitting 60% in 2000.

The demographics are well known.  More women chose to pursue careers and some families needed 2-wage earners in the family in order to make financial ends meet.

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* * * * *
The Shorter View

But, the long view masks what’s been happening the past couple of years.

Let’s shorten the time frame back to only 1990, and increase the granularity of the charting scale.

During the Clinton Era, women’s labor force participation rates continued to climb at the historical rate and reached a historical peak a bit above 60%

The participation rate fell back slightly during the eight Bush years … from 60% to about 59.5%

During the 3+ years since Obama’s inauguration, the women’s labor force participation rate dropped 2 points from 59.5 to 57.5%

Hmmm.

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* * * * *

So, what’s going on?

Pundits are serving up a few explanations:

1. The labor market has absorbed the historically pent up supply of women wanting to work and able to find jobs.

2. Some women have discovered what many me have know for centuries – work often isn’t as fulfilling and rewarding as it’s made out to be.

3. Some women have done the math and figured out that compensation levels are sometimes inadequate to fully cover the costs of work clothes, commuting, child care, etc.

4. As government benefits have increased, some women at the lower rungs of the economic ladder have concluded that they’re better off not employed than to take a low paying job. 

Regarding the last pint, according to the WSJ, in some high-benefit states women need to earn $30,000 or more to compensate for the benefits they lose if they get a job.

Considering that a full-time minimum wage job only pays about $20,000  [ 2,000 hours times $10} …  at least part of the explanation for declining labor force participation rates may be purely rational economics …

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Prepping for the jobs report this Friday …

May 3, 2012

A couple of data points …

The BLS weekly new unemployment claims averaged 363,000 in March … they’ve been just short of 390,000 the past couple of weeks.

* * * * *

Challenger  reported an increase in job cuts — vs. last month and vs. same month last year.

U.S.-based employers announced planned job cuts totaling 40,559 during the month of April.

That is a 7.1 percent increase from  job cuts announced in March.

April job cuts were up 11.2 percent from the same month a year ago.

So far this year, employers have announced 183,653 job cuts, 9.8 percent more than the job cuts by this point in 2011.

* * * * *

Gallup’s daily tracking of unemployment has been running between 8.3% and 8.4% for the past week or so.

* * * * *

Yesterday, ADP reported that the private sector added just 119,000 jobs in April

Private-sector employment increased by just 119,000 in April, according a report from ADP that puts a dent into the notion that the jobs market is on the path to a solid recovery.

The report was well below forecasts of 170,000 and comes after a string of stronger numbers.

ADP said service-sector jobs rose by 123,000, but construction fell by 5,000

* * * * *

Let’s see: unemployment claims are up, Gallup says 8.4%, ADP reports a slowing of job growth (below what’s need to keep pace with typical labor market growth).

So, what’ll be the BLS unemployment number?

My bet: the mysterious seasonal adjustments coupled with more discouraged workers no longer looking for work will keep the unemployment rate at 8.2%

We’ll see.

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News Flash:Weekly jobless claims drop … say, what?

April 26, 2012

This is getting downright silly …

The first line of this morning’s BLS report on weekly jobless claims says:

In the week ending April 21, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 1,000 from the previous week’s revised figure of 389,000.

Note the last couple of words:  “ … from the previous week’s revised figure”.

Hmmm.

Here’s the way CNBC decoded the report:

Initial claims for state unemployment benefits dropped by 1,000 to a seasonally adjusted 388,000, the Labor Department said on Thursday.

The prior week’s figure was revised up to 389,000 from the previously reported 386,000.

The four-week moving average for new claims, a closely followed measure of labor market trends, rose 6,250 to 381,750, its highest since the week that ended January 7.

Get it?

Last week, when claims were reported to have gone up, they were understated by 3,000.

Hmm.

Now, last month gets revised upward … and guess what?

This month is lower than last month.

So, Team O has a talking point: jobless claims are down.

They do think we’re stupid …

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Told you so: Companies emerge from recession more productive.

April 12, 2012

Way back in July 2009, we posted “Private sector jobs won’t be coming back any time soon”

Our logic was basic business:

First, you can’t let a good crisis go to waste, right?

Businesses always use tough economic times to clean house.

Fat builds in all organizations over time. In “normal” times, it’s difficult to get rid of dead wood. Employment laws – perhaps well-intended originally –- serve to protect slackers by making it cumbersome and difficult to fire anybody.

When the economic tide rolls out, companies have the air cover they need to resize and purge under-performers en masse.

The tendency is to cut deep. If some muscle gets pared too, so be it. It can be rehabilitated later.

In typical business cycles, employment is a so-called lagging indicator of an economic rebound. That is, when the economy starts to recover, jobs are usually added back very slowly.

Why?

Because businesses have a renewed zeal for productivity, they recommit to keeping the fat from building up again, and they want to be sure that the signs of better economic times aren’t false positives.

Fewer jobs will get added back than history would suggest, and those that get added back will materialize later than past patterns.

Businesses will add jobs as a last resort rather than trying to build capacity ahead of the economic growth curve.

Well, the WSJ has confirmed our prognosis in an article titled: Large Corporations Emerge from Recession Leaner, Stronger—and Hiring Overseas

Overall, the Journal found that S&P 500 companies have become more efficient — and more productive.

In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000

Such efficiency moves are essential for companies to be competitive.

But economists warn that improved efficiency and continued executive caution are slowing the recovery.

“What’s best for an individual firm may not be best for the overall economy,”

Yeah, but, you just can’t let a good crisis go to waste …

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‘Tis the season …

April 9, 2012

… or more precisely:  ‘tis the seasonality.

For a couple of months, we’ve been pointing out that something smelled fishy about the Fed’s employment reports.

Too much of the good news seemed to be directly tied to statistical tweaks of the the raw data called “seasonal adjustments”.

In fact, the Feds have been goosing the numbers up by more then they used to.

Well, now the Wash Post is even on the case.

The Post article — “Mild winter may have artificially inflated jobs data, economists fear“ –  suggests that we may have been underestimating the effect.

Economists are now saying that the mild winter has artificially inflated job growth.

Translation: The surge in hiring early in the year may not be as strong as it appeared.

The warm weather meant more jobs for construction workers and retail employees.

For economists, it means a statistical nightmare.

Typically, these bumps in demand are evened out through a process called seasonal adjustment.

That allows researchers to compare one month’s economic activity with the next for a more accurate picture of the nation’s health.

But this year’s weather was so abnormal that those models fell short, and economists are now scrambling to figure out how much of the growth over the past three months was simply due to a glitch in their systems.

“When the weather does not follow a normal seasonal pattern, then the seasonal adjustment cannot adjust for it.”

And that may help explain why recent data on jobs have looked rosier than actual economic growth would suggest.

Forecasts for the nation’s gross domestic product during the first quarter hover around 2 percent, a middling number at best.

Somewhere there is a disconnect, and Mother Nature is a valid scapegoat.

The labor market boost from the mild winter will eventually even itself out, though it may mean dips in job growth in coming months

Glad to see the mainstream media catching up with the Homa Files and its loyal readers …

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The unemployment rate went down … hmmm.

April 6, 2012

BLS Report says that 120,000 seasonally adjusted jobs were added in March … below February when 240,000 were added.

In February, the unemployment rate remained constant at 8.3% … it dropped in March to 8.2%.

How can that be?

Remember that the jobs growth comes from the “Institutions Survey” and the unemployment rate comes from the “Population Survey”.

From the “Population Survey”, seasonally adjusted employment actually declined by 31,000 – from 142.065 million to 142.034 million. (chart below)

So, how did the unemployment rate go down?

Simple.

The labor force participation rate continued to decline.

In February, 154.871 million were in the labor pool; in March there were 154.707 million … a drop of 164,000. (chart below)

Presto … the unemployment rate goes down.

If only more people were to get sufficiently discouraged that they’d stop looking for work, we’d have this unemployment problem nailed.

* * * * *

Labor Force Statistics from the Current Population Survey

Civilian Employment Level

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Civilian Labor Force Level

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So, is employment up or down since Obama took over?

March 21, 2012

Team Obama keeps crowing about the millions of jobs they’ve added with their trillions of dollars of fiscal and monetary stimulators.

Hmmm.

Here are the facts, direct from the BLS

In February 2008 — right as the financial crisis was becoming evident — employment was 136.356 million.

Employment dropped by about 5 million between February 2008 and February 2009.

In February 2009 — when Obama took office — there were 131.314 million workers employed.   Real jobs, no seasonal adjustment.

Note: Obama’s Stimulus was passed January 28, 2009

The comparable number in February 2012 was 131,164 million.

By simple subtraction,  there are 150,000 fewer jobs now then there were in February 2009.

Note: During the same period, the labor force (i.e. those folks who are employed or looking for work) grew by about 300,000 … from 153.804 million in Feb 2009  to 154,114 million in Feb. 2012. 

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* * * * *

Let’s dig a little deeper with another view of the data:

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Cutting to the chase, “real” employment is back to where it was when Obama was inaugurated … but up substantially from the low point in Obama’s term.

The “issue” is who owns 2009 — Bush or Obama?

Obamites argue that the drop in 2009 is simply a reflection of the momentum coming out of the Bush years … slowed by effects of the Stimulus.

GOPers argue that — since Obama’s Trillion-dollar Stimulus was passed in January 2009 and since the administration made promises re: keeping unemployment in check — that Obama owns 2009.

The answer is probably somewherw in between.

You decide … 

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Unemployment: The final nums before tomorrow’s final nums …

March 8, 2012

Tomorrow’s BLS report will be very interesting.

On the plus side: ADP, released their proprietary private payrolls jobs report earlier this week. Its usually – but not always – a good leading indicator of the the BLS nums.

Form February, ADP reported a gain of 216,000 private sector jobs.

Last month (January) 2012 ADP’s final num was 173,000 jobs. In contrast, the BLS reported 257,000 seasonally adjusted private sector jobs for January.

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On the minus side:

Today, the BLS reported that the number of U.S. workers filing new applications for unemployment benefits rose for the third consecutive week

Initial jobless claims jumped 8,000 to a seasonally adjusted 362,000 in the week ending March 3.

Most important, Gallup – which nailed the drop to 8.3% last month —  has been consistently reporting an unemployment rate of 9% throughout February.

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The consensus of economists is that about 200,000 jobs will be reported and that the unemployment rate will hold at  8.3%.

Ken says: seasonally unadjusted jobs will decline, seasonally adjusted jobs will increase less than 200,000 … and the unemployment rate will bump back up to 8.5%

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How long does an average unemployed person stay unemployed?

March 5, 2012

Answer : In the old days, it used to be 10 weeks …  then a steady creep up to 20 weeks … then an explosion over the past couple of years to 44 weeks.

But, according to Team Obama, the long duration has nothing to do with the extension of unemployment benefits to 99 weeks.

Yeah, right.

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Oops … BLS unemployment report not being released until next Friday.

March 1, 2012

OK, I got a bit a head of myself this week …

The December unemployment report was released on January 6 — the first Friday in January,

The January unemployment report was released on February 3 –  the first Friday in February,

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So, I assumed that the February unemployment report would be released tomorrow March 2 — the first Friday in March,

Wrong.

The BLS says that The Employment Situation for February will be released next Friday, March 9, 2012, at 8:30 a.m. (EST).

My analysis and predictions still hold … a bump up in the rate.

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The labor force participation rate … so what?

February 29, 2012

When the Feds release this week’s unemployment data, expect more chatter about the falling labor participation rate … which reflects the increasing number of discouraged people who have stopped looking for work and don’t get counted in the unemployment numbers.

For the 4 years prior to Obama’s inauguration, the labor force participation rate hung pretty steady … at around 66%.

Since Obama took office, that rate has plummeted to 63.7%.

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Let’s try some math skills …

If unemployment is 8.3% with a 63.7% labor force participation rate, what would the unemployment rate be if the participation rate were at the pre-Obama 66%?

Answer: about 11.5%

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Obama’s economic hope continues to be that more and more people get discouraged — or, just stay on unemployment for the full 99 weeks.

Bingo, down goes the unemployment rate.

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In advance of this week’s unemployment report … Gallup up to 9.2%

February 27, 2012

In case you missed it this weekend, Gallup’s daily tracking report put unemployment at 9.2%up from 8.3% in mid-January.

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The BLS report this Friday will be vey interesting.  Even with more book-cooking via changed methodologies, sample changes, and seasonal adjustments — it’ll be hard to put lipstick on this pig

My prediction: the BLS rate will go from 8.3% to 8.5% …. with a lot smoke re: seasonal adjustments … but  nothing would surprise me now that the bean counters have been politicized.

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Re: the unemployment rate … Gallup still hanging at 9% — up from 8.3%.

February 21, 2012

You may remember that the BLS reported a dramatic drop in the unemployment rate for January — down from 8.5% to 8.3%.

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At the time, we (and many other folks) pointed out that the apparent improvement was largely drive by people leaving the work force, by seasonal adjustments (which were more liberal than prior years), and by a revision in the way that the BLS compiles the numbers.

In other words, smelled like some book-cooking going on.

At the time, we encouraged loyal readers to start watching the Gallup daily tracking of the unemployment rate.  Historically, it has been a pretty good canary in the unemployment coal mine.

Typically, Gallup’s mid-month number is a good predictor of the BLS’s end-of-month number.

Well, the Gallup number has increased dramatically from mid-January to mid-February … from 8.3% (same as the BLS end of January number) … up to 9%, where it has bee hanging.

The number reported by the BLS for February will be very, very interesting …

Based on Gallup, the unemployment rate should surge back up.

Unless, of course, somebody cooks the books …

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According to Gallup, U.S. unemployment rate is back to up 9% … oops.

February 14, 2012

A couple of weeks ago – when Team Obama was victory lapping over the unemployment rate dropping to 8.3% – we told readers to watch the Gallup daily unemployment surveys as a harbinger of things to come.

Gallup has been saying that the employment numbers in the end of January seemed to be weakening.

Guess what?

After reaching a low of 8.2% in mid-January – consistent with gov’t reporting –  the rate has crept back up to 9%.

Hmmm.

A reverse victory lap in the offering?

 

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Source: Gallup

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Cookin’ the books? … About those pesky seasonal adjustments to the Fed’s employment numbers …

February 9, 2012

Earlier this week, we blogged about the “interesting” difference between Team O’s job gain claim:

The Labor Department reported that the economy gained 243,000 jobs.

But, the BLS  also reported that the economy lost 2,689,000 jobs in the month

The difference in the two numbers is in seasonal adjustment.

Here’s an interesting tidbit that I haven’t seen reported: the January seasonal adjustment factor mysteriously crept up from the factor that was used in January 2011 … with the effect of increasing the number of seasonally adjusted jobs reported.

As Gomer Pyle would say: Surprise, surprise, surprise …

 

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Source: BLS

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Unemployment rate down to 8.3% … hmmm.

February 6, 2012

The Feds reported 243,000 new jobs in January … driving the unemployment rate down to 8.3%

Clear evidence that we’re on a roll, right?

Not so fast.

First, numerous sources have pointed out that another 1.2 million people got discouraged and stopped looking for work. They’re no longer counted as unemployed.

Second, as it does every year, the government revised its statistical methodology for the  January report.  The BLS footnotes say “As a result, household survey data for January 2012 will not be directly comparable with that for December 2011 or earlier periods.”

Hmmm.

Morw specifically, even the NY Times asks: Is the number real ?

How many jobs did the American economy add in January?

The Labor Department estimated on Friday that the economy gained 243,000 jobs.

The department also estimated that the economy lost 2,689,000 jobs in the month

The difference in the two numbers is in seasonal adjustment.

The actual survey showed the big loss in jobs.

The seasonal adjustments produced the reported gain of 243,000 jobs.

A reason to doubt the number is that there has been a tendency in this cycle for the seasonal factors to overstate moves, in both directions.

 If the seasonal adjustment was too large, then the gain should be smaller.

Double hmmm.

That’s why  I like to track Gallup’s unemployment estimates.  Over time, they’ve seemed reliable and — call me cynical — but, they’re less likely to be subject to political manipulation.

For openers, here’s what Gallup said prior to the government release:

The U.S. government’s January unemployment rate that it will report Friday morning will be based largely on mid-month conditions.

The mid-month reading normally provides a pretty good estimate of the government’s unadjusted unemployment rate for the month.

At mid-January, Gallup reported that its unemployment rate had declined to 8.3%, based on data collected through the 15th of the month.

OK, that squares with the Feds number.

But, importantly, Gallup also notes:

Gallup’s unemployment and underemployment measures show deterioration since mid-January.

While the unemployment rate of 8.6% for January is up only modestly from December, this overall increase subsumes the more negative trend of the most recent weeks.

In turn, this also seems consistent with Wednesday’s ADP report showing less job growth in January than in the prior month.

English translation: Expect February’s unemployment rate (reported first week of March)  to bounce back up … unless there’s a flurry of new hiring in early February.

Here’s the data …

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Ken’s Take:

Here’s what I said before, and I stand by it !

Pundits have been saying that Obama will be ok with a high unemployment rate in 2012 as long as the trajectory is in the right direction. That is, that unemployment is coming down.

Here’s my scenario: unemployment will creep back up and Obama will be facing a high unemployment rate that is rising.

That’s not good for the O-team.

Politically, Obama might have been better off if the rate had stayed closer to 9% for a while … he may be in the awkward position of having a high unemployment rate that’s going in the wrong direction.

It’ll be interesting …

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Will 8.5% help O’s re-election quest?

January 9, 2012

According to the New York magazine

For the last year or so, though, the economy has stubbornly failed to cooperate, and pundits began to acclimate themselves to the assumption that President Obama was  highly vulnerable, if not a dead man walking.

A few months ago, that scenario was looking almost certain.

Now it’s looking far less likely.

Oh really? 8.5% unemployement is a good thing?

I guess the logic is that extrapolating the the November to December change, we’ll be back to full employment in in about 5 years.

Maybe faster if more people can be encoraged (or is it discouraged?) enough to leave the work force?

But, let’s not quibble over the numbers.

The question is: will December’s 8.5% help or hurt President Obama’s re-election campaign.

Short-run, the President should get an approval bump from the unemployment rate headlines. That’s fair.

But, the new lower number may be an albatross in 2012.

Here’s why.

Still, much of the rate drop is attributable to folks who are unemployed and stopped looking for a job because either (1) they had holiday shopping to do (2) didn’t want to work as a retail clerk or FedEx warehouse grunt  (3) like the idea of 99 weeks of unemployment checks, or (4) have flat out given up because the economy sucks so bad.

My view: the road to economic success is is not paved with people giving up hope and couch-sitting instead of job-hunting.

The unemployment rate is likely to move back up in 2012 because, historically, as the economy appears to be bouncing back, unemployed folks who aren’t looking for work re-enter the job market and start looking again. In other words, the unemployment rate may creep up because the denominator is getting bigger.

So, even if a modest recovery is taking place – something I don’t personally  believe to be true – the labor market dynamics work against the President.

Pundits have been saying that Obama will be ok with a high unemployment rate in 2012 as long as the trajectory is in the right direction. That is, that unemployment is coming down.

Here’s my scenario, unemployment will creep back up and Obama will be facing a high unemployment rate that is rising.

That’s not good for the O-team.

Further, if Obama chest-pounds the 8.5% now, Congress has less pressure to “pass it now.” So, he may get less of his jobs bill through.

Politically, Obama might have been better off if the rate had stayed closer to 9% … he may be in the awkward position of having a high unemployment rate that’s going in the wrong direction.

It’ll be interesting …

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Is 8.6% good or bad for Obama?

December 5, 2011

The unemployment rate dropped a lot in November from  9.0% to 8.6%.

That’s good news for us and for President Obama. right?

I’m not so sure.

First, let’s dive into the numbers.

Job growth has been around 100,000 per month for the past couple of months.

But, until November, the unemployment rate has been stuck at 9%.

Hmmm.

Most folks argue that 100,000 to 200,000 is what’s required to handle population growth –  the new workers entering the market.

But, in November, 125,000 new jobs pushed the unemployment rate down by .4% – which is huge.

Couple of reasons.

  • There are different surveys used to calculate job growth and unemployment rates.  It could be that one of the surveys is whacky … either there were more jobs added than reported, or unemployment is under-reported.
  • The jobs numbers for the immediately prior months were revised upward.  That means that unemployment may have been over-estimated … that the rate really is 8.6% now, but it’s a drop from, say, 8.8% … not 9%
  • Most important, about half of the apparent drop in the unemployment is attributable to folks dropping out of the workforce … people who are unemployed but have stopped even looking for new employment.

My bet is that the jobs number is right and that the unemployment rate didn’t really fall by .4% … maybe it fell by one or two tenths of a percent … but not close to 1/2 percent.  My eye is on the jobs number.

OK, let’s not quibble over the numbers.

The question is: will November’s 8.6% help or hurt President Obama’s re-election campaign.

Short-run, the President should get an approval bump from the unemployment rate headlines.  That’s fair.

But, the new lower number may be an albatross in 2012.

Here’s why.

The unemployment rate is likely to move back up because, historically, as the economy appears to be bouncing back, unemployed folks who aren’t looking for work re-enter the job market and start looking again.  In other words, the unemployment rate may creep up because the denominator is getting bigger.

So, even if a modest recovery is taking place – something I don’t believe to be true – the labor market dynamics work against the President.

Pundits have been saying that Obama will be ok with a high unemployment rate in 2012 as long as the trajectory is in the right direction.  That is, that unemployment is coming down.

Here’s my scenario, unemployment will creep back up and Obama will be facing a high unemployment rate that is rising.  That’s not good.

Further, if Obama chest-pounds the 8.6% now, Congress has less pressure to “pass it now.” So, he may get less of his jobs bill through.

Politically, Obama might have been better off if the rate had stayed closer to 9% … he may be in the awkward position of having a high unemployment rate that’s going in the wrong direction.

It’ll be interesting …

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Why 1-year employment incentives don’t move the needle ….

November 21, 2011

Obama’s jobs plan has a smorgasbord of hiring incentives … all of which are 1-time credits (e.g. for hiring veterans) or 1-year tax incentives (e.g. eliminating half of employers’ FICA match).

Corp execs’ statements that they don’t hire based on 1-year incentives keep falling on deaf ears, and the Administration keeps serving them up.

Let’s look at a specific and do some simple arithmetic.

According to the Administration’s fact sheet on the Jobs Bill, the lead provision of the bill (about 15% of the $450 billion cost) is a payroll tax cut for businesses.

The President’s plan will extend the payroll tax cut to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent.

For example, a firm with 50 workers earning an average of $50,000 a year – for a total payroll of $2.5 million – would receive a payroll tax cut of 3.1% of its total payroll, or about $80,000$1,500 per average employee.

By intent, the cut doesn’t do much for big businesses. The maximum benefit that could go to a big company is only  $155,000 ($5 million times 3.1%).  That’s rounding rounding error – equivalent to maybe 2 “free” hires for 1 year.

Hardly a game changer.

So let’s look at a small business.

At the margin, continuing the fact sheet’s example, a new average employee’s base salary cost is $50,000. Fringes (e.g. health insurance) add on another $10,000.  Payroll taxes (pre-credits) adds on another $3,000 … bringing the total to $63,000.

But, companies don’t hire people for 1-year.  Once they’re added to the payroll, they stay there for awhile.

How long?

Well, the BLS says that the median tenure of employees is about 4.5 years … with almost 1/3 employees having been on payrolls for more than 10 years.

Let’s take the low number, 4.5 years.

When a company hires an employee, it is implicitly making a commitment of at least $285,000 ($63,000 times 4.5 years).

The Obama plan  offsets the cost with $1,500 …  a whopping 1/2 of 1%.

Does anybody really believe that will stimulate companies to hire in uncertain times?

I’m betting the under on this one.

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What’s the unemployment rate for college graduates?

November 9, 2011

Based on the Wall Street Occupiers and the mainstream media reports, you’d think it’s sky high, right?

Well, according according to the BLS it’s 4.5%.  … that’s versus 9.1% for all categories, 14.3% for drop-outs, 9.3% for high school grads, and 8.9% for those with some college.

Hmmm.

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In business, when you miss your plan …

November 8, 2011

… you get fired.

In government, you cite bad luck and argue that things might have been even worse.

The numbers say it all … expend $1 trillion and get:

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Source: NY Times

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Still another “protected class” … unemployeds.

October 10, 2011

Punch line: Obama’s job bill would let unemployed folks sue an employer with an opening if they think they haven’t received due consideration in the hiring process.

Excerpted from AP: Unemployed seek protection against job bias

A growing number of unemployed or underemployed Americans are complaining that they are being screened out of job openings for the very reason they’re looking for work in the first place.

Because they’re unemployed.

Some companies and job agencies prefer applicants who already have jobs, or haven’t been jobless too long.

They may get help from a provision in President Barack Obama’s jobs bill, which would ban companies with 15 or more employees from refusing to consider — or offer a job to — someone who is unemployed.

The provision would give those claiming discrimination a right to sue, and violators would face fines of up to $1,000 per day, plus attorney fees and costs.

Let me get this straight.

So, when benefits run out after 99 weeks – almost 2 years – then companies must hire them.

Perhaps there’s a reason that the 9% who are unemployed aren’t in the group of 91% who are employed.

You think ?

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Boehner says “Businesses are on strike” … we told you so July 21, 2009

September 21, 2011

Last week, Speaker Boehner spoke about the Obama’s Jobs Plan and the state of the economy”

House Speaker John Boehner said President Barack Obama’s jobs plan would do little to get the economy moving again because “job creators in America are basically on strike.”  Source

Well, we told so … going back to a July 2009 post titled: “Why private sector jobs won’t be coming back any time soon … hint: it’s called passive aggressive resistance.”

Back then, we were saying:

The bottom line: businesses will resist government policies passive aggressively. 

Fewer jobs will get added back than history would suggest, and those that get added back will materialize later than past patterns.  Businesses will add jobs as a last resort rather than trying to build capacity ahead of the economic growth curve. 

Why should companies  increase their costs and  risks any more than is absolutely necessary ?

Companies will continue to off-shore jobs, but will be more clever and clandestine about it, e.g. by vertically disintegrating and simply buying goods and services from 3rd parties.

Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.

More likely, they will let unemployment continue to creep up, and will slow roll the process of rehiring. 

Corporate chieftains will sit back and watch the President squirm and spin his “4 million jobs – saved or created”. 

As Rev. Wright would say “the chickens will have come home to roost”. 

Passively aggressive  resistance at its very best.

There’s more in the original post.

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