unemployment

May’s “Terrible” Jobs Report

June 4, 2016 by Tim McMahon

On June 3^rd the U.S. Bureau of Labor Statistics released its “surprisingly weak” monthly Employment Report which the media is touting as “terrible”. According to the media “only 38,000 jobs were created” in the month of May. Although experts were predicting an increase two or three times as large.

This was the smallest gain since September 2010 partially fueled by the Verizon strike of 34,000 but even with that extra 34,000 payrolls would have increased by only 72,000. Fed Chair Janet Yellen has said monthly gains of roughly 100,000 jobs are needed to keep up with growth in the work-age population.

However, like most Government statistics it is only half the story. First of all, the numbers quoted are

BLS Monthly Employment Report for April

May 6, 2016 by Tim McMahon

The US economy added 160,000 “seasonally adjusted” jobs in April, the lowest figure in the last seven months. The adjusted U-3 unemployment rate remained steady at 5%. The Unadjusted U-3 fell to 4.7% while the Unadjusted U-6 fell to 9.3% from 9.9% last month.
On a seasonally adjusted basis employment has fallen while on a non-adjusted basis the actual number of non-farm employed has increased from 142.887 Million to 143.944 million for a net increase of 1,057,000 jobs but since April traditionally sees a large increase in seasonal workers the seasonally adjusted number says that we were only 160,000 jobs better than what we would expect if there were zero jobs growth.

Labor Force Participation Rate

The Labor Force Participation Rate (LFPR) is the percentage of the Labor Force that is currently either looking for a job or actually has one. So even though it sounds like it is talking about how many people are working it actually is the percentage who “want to work”. As of April this stands at 62.8%. This rate has been steadily falling for a number of years and has reached levels not seen since the 1970’s.

Since the Bureau of Labor Statistics measures unemployment as the percentage of the labor force that can’t find work as people stop looking for work they fall out of the labor force and are no longer counted. Thus the unemployment rate can fall even though no new jobs have been created.

Long Term Labor Force Participation Rate

As we can see from the above chart the LFPR peaked in the late 1990’s and fell during the recession from 2000 through 2004. From 2004 through 2007 it leveled off but then the “Great Recession” hit and the LFPR has fallen pretty steadily since. And even though we are supposed to be in a recovery the LFPR continues to fall although there was a bit of an up tick at the end of 2015 and early 2016, April’s LFPR is lower than March’s.

Some people wrongly assume that the LFPR is falling due to retiring baby-boomers. This premise however has been proven false. See Record Low LFPR which shows the LFPR by age group since 1999. The biggest declines occur in the younger ages while those above age 60 actually show a higher percentage are working. For instance, in 1999 only 24% of those age 65-69 were working but according to the BLS in 2015 30.8% of those age 65-69 were working.

Gallup “Good Jobs” Index

Gallup’s “Good Jobs” Index is their version of the LFPR it is calculated as a percentage of the total population rather than limiting it to the “work force”. So although the percentage is lower it is a better indicator of the actual situation since it is not subject to fudging through simply redefining who is in the “work force”. Gallup says 44.9% of the total adult population is in the “Good Jobs” Index i.e. has a full-time job. This does not mean that they are employed at their full capacity or that they are earning a “decent wage” simply that they are employed full-time. Gallup defines a full-time as 30+ hours per week for an employer who provides a regular paycheck. This is up from 44.5% last month confirming the seasonal increase in employment mentioned above.

BLS Releases October Employment Figures

November 6, 2015 by Tim McMahon

Current Unemployment Rate Chart

According to the latest U.S. Bureau of Labor Statistics (BLS) data release on November 6th the current “Seasonally Adjusted” Unemployment Rate for October is 5.0% down from September’s 5.1% which was down significantly from last October’s 5.8%. The “Unadjusted” rate is 4.8% down from 5.6% in July and much lower than January’s 6.1%. See: Current Chart

According to the BLS, the U-6 Unemployment Rate for October was 9.5%. U-6 unemployment includes short-term discouraged workers who have given up looking for work because they feel there is no work available for them.

However, since 2010, Gallup (the survey/Pollsters) have been doing their own employment survey using basically the same parameters as the BLS and they conclude that the current U-6 (which they call the “UnderEmployment Rate) is actually 13.8% down from 14.1% in September.

According to John William’s Shadowstats the government began underestimating unemployment back in 1994 when they changed the way unemployment was calculated since “long-term discouraged workers were defined out of official existence”. The new U-6 numbers only include short-term discouraged workers. The following chart shows their calculations for Unemployment based on their estimates of what it would be if unemployment was calculated the pre-1994 way.

Current Employment Data

According to the current Bureau of Labor Statistics data, the employment situation for the month of October 2015 was as follows: The number of Unadjusted jobs reported for October 2015 was 143.739 million. That was up from June’s previous peak of 142.836 million.

For more information see: Current Employment Data

Current Employment vs Unemployment Chart

When looking at employment vs. unemployment you would think that they would simply be the inverse of each other. Flip one over and you have the other. But the U.S. Bureau of Labor Statistics (BLS) actually uses two entirely different surveys to calculate them. So by comparing them we can spot irregularities. See Employment vs. Unemployment for more information.

Historical Employment Data

In this chart we can see the historical employment figures from 1939 through the present. But in addition to the number of jobs we can also see the recessions shaded blue.

See: Historical Employment Levels for more information.

The misery index combines two factors that can make life difficult for people i.e. unemployment and inflation. High levels of price inflation (rapidly rising prices) will cause households to have difficulty affording the basic necessities while high unemployment will leave a high percentage of households without any income at all.

See: InflationData’s Misery Index.

Seasonally Adjusted Unemployment Rate

The U-3 Seasonally Adjusted Unemployment Rate is the standard unemployment rate that the government prefers to use since it presents a much rosier picture than the U-6. Go here if you would like to see the “Unemployment Rate” in table form.

Unadjusted vs. Seasonally Adjusted Unemployment Rate

Although the Seasonally Adjusted Unemployment Rate is often quoted by the main stream media (MSM) people often wonder how much fudging goes on in the adjustment process. In this chart you can see how the Seasonally Adjusted Unemployment Rate compares with the Unadjusted rate.

Although it doesn’t appear that there is much “fudging” going on with the Seasonal adjustments that doesn’t mean the numbers are without problems. See Is the Government Fudging the Unemployment numbers for some alternative ways to get a better picture of the employment situation.

See Also:

What is U-6 Unemployment for more information about the different definitions of unemployment.
Current U-6 Unemployment Rate
What is the Real Unemployment Rate?

High Paid Miners Now Working at Walmart?

October 2, 2015 by Tim McMahon

September Employment Numbers Disappointing

Apparently U.S. employers cut back on hiring over the last two months. The expectation by economists polled by Reuters was that there would be a net gain of 203,000 jobs in September.

But when the BLS released their “preliminary estimates” for the employment situation for September non-farm employment rose by only 142,000 in September. And to make matters worse, August numbers were adjusted down resulting in the smallest Seasonally adjusted two month gain in over a year.

The BLS Commissioner’s report stated, “Job gains occurred in health care and information, while mining employment fell… The number of persons unemployed for less than 5 weeks increased by 268,000 to 2.4 million in September, partially offsetting a decline in August… Thus far in 2015, job growth has averaged 198,000 per month, compared with an average monthly gain of 260,000 in 2014.”

So 2015 has averaged only 76% the job growth that 2014 had and at 142,000 September was only 54% of 2014’s average. 34,000 new jobs were created by healthcare, 31,000 came from professional and business services, 24,000 from retail trade employment, and food services and drinking places added 21,000 jobs. On the other hand, mining and mining support lost -17,000 jobs. So it appears all the high paid mining workers are now working at either McDonald’s or Walmart. Not a good trend at all!

See Current Employment Commentary for more information.

The U.S. Bureau of Labor Statistics (BLS) also released the newest unemployment data for September 2015 today. According to the BLS, the current “Seasonally Adjusted” Unemployment Rate for September is 5.1% identical to August. The BLS reported the “Unadjusted” Unemployment Rate is 4.9% which is lower than August’s 5.2% . See Current Unemployment Chart for more information.

In our chart of employment vs. unemployment we compare them and although you would expect that employment and unemployment are simply the inverse of each other (i.e flip one over and you have the other) actually there are several anomalies in the data. Because the U.S. Bureau of Labor Statistics (BLS) uses two separate surveys to calculate the data it helps us see [Read more…] about High Paid Miners Now Working at Walmart?

August Unemployment Down

September 4, 2015 by Tim McMahon

The BLS issued their “preliminary estimates” for the employment situation for the month of August 2015. The Commissioner’s report regarding the Seasonally Adjusted numbers says, “Nonfarm payroll employment increased by 173,000 in August, and the unemployment rate edged down to 5.1 percent. Employment rose in health care and social assistance and in financial activities, while manufacturing and mining employment declined.”

The full report of unadjusted numbers states that there were 142.126 Million jobs in August compared to 141.794 million jobs in July and 142.868 million jobs in June.

See Current Employment Commentary for more information.

The U.S. Bureau of Labor Statistics (BLS) also released the newest unemployment data for August 2015 today. According to the BLS, the current “Seasonally Adjusted” Unemployment Rate for July is 5.1% down from July’s 5.3%. The BLS reported the “Unadjusted” Unemployment Rate is 5.2% which is lower than July’s 5.6% . See Current Unemployment Chart for more information.

July Unemployment Data Released

August 7, 2015 by Tim McMahon

The BLS issued their “preliminary estimates” for the employment situation for the month of July 2015. Their abbreviated report using seasonally adjusted numbers says, “Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in retail trade, health care, professional and technical services, and financial activities.”

The full report of unadjusted numbers states that there were 141.794 million jobs in July down from 142.817 million jobs initially reported in June. At the same time they revised the numbers for June up to 142.839 million making the real loss of jobs -1,045,000. See Current Employment Commentary for more information.

The U.S. Bureau of Labor Statistics (BLS) also released the newest unemployment data for July 2015 today. According to the BLS, the current “Seasonally Adjusted” Unemployment Rate for July is 5.3% the same as June but down from May’s 5.5%. The BLS reported the “Unadjusted” Unemployment Rate is 5.6% which is lower than January’s 6.1% but up from June’s unadjusted 5.5%. See Current Unemployment Chart for more information.

Normally, you would expect that employment and unemployment should simply be the inverse of each other. Flip one over and you have the other. However, in the chart of employment vs. unemployment we see several anomalies in the data. Since the U.S. Bureau of Labor Statistics (BLS) actually uses two entirely different surveys to calculate them it helps us see [Read more…] about July Unemployment Data Released

June Unemployment Data

July 2, 2015 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released the newest unemployment data for June 2015 on the first Thursday of July (rather than Friday due to the holiday). According to the BLS, the current “Seasonally Adjusted” Unemployment Rate for June is 5.3% down from May’s 5.5%. The BLS reported the “Unadjusted” Unemployment Rate is 5.5% which is lower than January’s 6.1% equal to last October’s unadjusted 5.5% but up from April’s 5.1%. See Current Unemployment Chart and Job Growth Stalls, Labor Participation at 38-Year Low for more information. The BLS issued their “preliminary estimates” for the employment situation for the month of June 2015. The report states 142.589 million jobs reported. That’s up 455,000 from May. But at the same time they revised the numbers for May down by 58,000 making the real gain (compared to the numbers they reported last month) 397,000. See Current Employment Commentary for more information.

Historical Employment Levels Compared to Recessions

In addition to the number of jobs from 1939 through the present this chart shows the recessions shaded blue as per the official description of a “recession” by the National Bureau of Economic Research (NBER). Although during some periods which are classified as official recessions the unemployment rate didn’t skyrocket generally, recessions correspond pretty well to declines in employment (i.e. increased Unemployment). This is especially true since unemployment is one of the factors NBER uses to determine whether there is an official recession. But theoretically if all the other factors line up employment could remain steady and the economy could be in a recession. See Employment During Recessions for more information. In this chart we compare employment vs. unemployment in an effort to get a more complete picture of the employment situation. Normally, you would think that they should simply be the inverse of each other. Flip one over and you have the other. But the U.S. Bureau of Labor Statistics (BLS) actually uses two entirely different surveys to calculate them. And the current chart shows [Read more…] about June Unemployment Data

May Unemployment Data

June 5, 2015 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released the newest unemployment data for May 2015 on Friday June 5^th. According to the BLS, the current “Seasonally Adjusted” Unemployment Rate for May is 5.5% up from April’s 5.4%. The BLS reported the “Unadjusted” Unemployment Rate is 5.3% which is lower than October’s unadjusted 5.5% and January’s 6.1% but up from April’s 5.1%. See Current Unemployment Chart for more information.

The BLS “preliminary estimates” for the employment situation for the month of May 2015 include 142.420 million jobs reported for May 2015. That was up 970,000 from April. But at the same time they revised the numbers for April down by 12,000. See Current Employment Commentary for more information.

BLS Releases Unemployment Rates for April

May 9, 2015 by Tim McMahon

The U.S. Bureau of Labor Statistics released the Employment and Unemployment rates for the month of April 2015 on Friday May 8th. The commonly quoted Seasonally Adjusted U-3 Unemployment rate was 5.4% down slightly from 5.5% in both February and March.

The unadjusted U3 was 5.1% while the broader unadjusted U6 [Read more…] about BLS Releases Unemployment Rates for April

March 2015 Unemployment Flat

April 3, 2015 by Tim McMahon

The U.S. Bureau of Labor Statistics (BLS) released the March Unemployment figures on Friday April 3^rd. According to the BLS the Current Unemployment Rate (Seasonally adjusted) for March was 5.5% unchanged from February. The Unadjusted Unemployment rate however fell from 5.8% to 5.6%. However, according to Gallup the Unadjusted Unemployment rate was actually 6.5% and the U-6 unemployment rate was 15.6% down from 16.1% in February.

Unemployment Numbers According to Gallup

	Unadjusted U-3	Unadjusted U-6
BLS	5.6%	11.0%
Gallup	6.5%	15.6%
Difference	0.9%	4.7%

Once again the BLS numbers are quite a bit different than the [Read more…] about March 2015 Unemployment Flat