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    Key Numbers In Unemployment Report Not So Good

    Key Numbers In Unemployment Report Not So Good

    Needless to say, administration supporters will be touting that the unemployment rate released by the Bureau of Labor Statistics this morning dropped from 9.8% to 9.4%.  Politically, this is good news for Obama, at least in the short run.

    Dig just a bit deeper, and you will see that 0.2% of that drop (or half the total drop) was from a decrease in the “participation rate” from 64.5 to 64.3 of the population.  So half of the good news reflects that people have dropped out of the work force and have given up looking for work.

    To put this in context, I ran a chart from the BLS website historical statistics database, showing the participation rate over the past 20 years, which shows that we are at a 20-year low:

    The other disheartening statistic is reflected in the chart combining the unemployment, marginal and discouraged workers (in short, everyone who is not working but currently or at one time wanted to work, or who is employed part time because full time work was unavailable).  Combine all those and the total is 16.6% up from 16.3% November not seasonally adjusted (seasonally adjusted it is 16.7% down from 17%).  This is the highest number since 1994 (first year data available):

    Here are two other charts showing the depth of the problem.  The first shows the average length of unemployment (in weeks) and the second the median length of unemployment:

    While the drop in the unemployment rate from 9.8% to 9.4% is good political news, it’s hard to see any real improvement below the surface.

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    Comments


    It's worse than half, actually, unless I misunderstand the numbers.

    An unemployment rate of 9.8% of a participation rate of 64.5% of the population represents 6.321% of the population.

    An unemployment rate of 9.4% of a participation rate of 64.3% of the population represents 6.044% of the population.

    The total difference, in terms of overall population percentage then, is 0.277%, of which 0.2% (or almost three-quarters) is no longer being counted. To perhaps help it make more sense, if those 0.2% that are no longer participating still were, then the population unemployment rate would be 6.244% instead of 6.044%, and the calculated rate would be 9.68%.

    Another interesting way to look at the numbers is to use the B tables, which show jobs by Industry. Using seasonally-adjusted numbers:
    For the 12 months of 2010, there were 1,346,000 private sector jobs added. Of those, a mere 135,000 were goods-producing jobs. 1,211,000 were service-providing jobs.
    Within the service jobs, the growth (in numbers of jobs) areas were:

    Healthcare & social assistance: 341,800
    Temporary jobs…………….: 308,400
    Leisure & Hospitality………: 240,000
    Retail Trade………………: 115,700

    If we look at the percentage growth in jobs by Industry, we see Temporary Help Service jobs grow by an astonishing 15.7%.

    I see the growth in temporary jobs as a worrying sign: employers are still reluctant to take on permanent employees, probably because of the overhang of uncertainty due to government spending, regulation, and Obamacare.

    If enough people give up looking for work, the unemployment number will drop to 0%, and then everybody will have a job.


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