Thread: Lies, Damned Lies, and (Unemployment) Statistics

Lies, Damned Lies, and (Unemployment) Statistics

Mac Slavo
December 2nd, 2011
SHTFplan.com
196 Comments

Mainstream media and Wall Street are salivating over the Bureau of Labor Statistics’ latest job growth numbers, which suggest that unemployment is on its fastest decline since the recession began in 2008:

MSNBC: Employment growth picked up speed in November; jobless rate fell to 8.6 percent

Employment growth picked up speed in November, pushing the nation’s unemployment rate down to 8.6 percent — its lowest level since March 2009.

Private employers added a net gain of 140,000 jobs in November, but governments shed 20,000 jobs, mostly at the local and state level. Governments at all levels have shed nearly a half-million jobs in the past year. The Labor Department revised up its job gains for September and October by 52,000 and 20,000, respectively.

“The labor market is gradually healing. It’s a glacial pace, but we are taking small steps in the right direction,â€

Come on folks - they are cookin the books for the Obamanation.

No President has ever been re elected with and unemployment rate over 8%. They are fighting for their power and as we have already seen from the DOJ - lies justify the end.

OPA News Release: [12/02/2011]
Contact Name: Bennett Gamble
Phone Number: (202) 693-4667
Release Number: 11-1728-NAT

Statement by Secretary of Labor Hilda L. Solis on November employment numbers

WASHINGTON — Secretary of Labor Hilda L. Solis today issued the following statement on the November 2011 Employment Situation report released today:

"Our nation's unemployment rate experienced a significant drop to 8.6 percent in November, a full 1.2 percentage points lower than this time last year. Nonfarm payroll employment added 140,000 private sector jobs last month. This means we've added 1.9 million private sector jobs over the past year — an average of 157,000 a month.

"The policies this administration has pursued are adding jobs back into the economy, and our recovery is picking up steam. In November, American companies increased hiring across virtually all regions and all sectors to keep pace with growing consumer consumption and demand. Last week we saw people talk with their wallets. One week after soaring Black Friday spending, we are seeing job growth firmly in the black heading into the holidays.

"Personal income and consumer spending are both up. Americans are showing more confidence in the economy. Now it's incumbent upon Washington to give them confidence in our government to solve our biggest challenges and put millions of Americans back to work. This is a strong report, but we can't forget those Americans who lost their jobs during the recession and are still struggling.

"We know what has worked: extending payroll tax cuts and unemployment insurance, and making smart investments in our economy. The clock is ticking. If Congress doesn't extend emergency unemployment benefits for our long-term unemployed this month, 5 million Americans will lose their benefits next year. These are the everyday heroes of our recovery who have lost their jobs through no fault of their own. They spend all day, every day filling out applications, sending out resumes and looking for work. Now is not the time to turn our backs on them. They deserve better. They deserve action.

"Congress must act immediately to extend emergency unemployment benefits and payroll tax relief. We must pass these measures this month to continue the positive trends we're seeing in today's report."

http://www.dol.gov/opa/media/press/opa/OPA20111728.htm

Gross Lie - Claim Unemployment Drops To 8.6%

Employment growth picked up speed in November; jobless rate fell to 8.6 percent


Joshua Lott / Reuters ... People wait to be interviewed during a job fair in Phoenix, Ariz., held last month.

By msnbc.com news services

Employment growth picked up speed in November, pushing the nation’s unemployment rate down to 8.6 percent -- its lowest level since March 2009.

The Labor Department reported Friday that nonfarm U.S. payrolls increased by 120,000 last month, accelerating from October’s 80,000 gain and roughly matching analysts’ expectations. http://www.bls.gov/news.release/empsit.nr0.htm The U.S. jobless rate fell sharply from the prior month’s 9 percent level.

Private employers added a net gain of 140,000 jobs in November, but governments shed 20,000 jobs, mostly at the local and state level. Governments at all levels have shed nearly a half-million jobs in the past year. The Labor Department revised up its job gains for September and October by 52,000 and 20,000, respectively.

“The labor market is gradually healing. It’s a glacial pace, but we are taking small steps in the right direction,â€

Consider the people hired for the holidays. If this were removed job creation would have been less than the month before .
It is odd that the removal of that number of people would result in such a large drop. Every 1.5 million workers is a 1% movement , one way or the other.
After the first of the year when these people are let go the number will rise. The bailout of Europe will certainly act in the same way the stimulus did here. It will only last as long as the money does. Weakness in Europe and the U.S. will spell disaster for the Asian Markets as well. Note China reducing requirements on bank reserves. Going into next years election unemployment will be as high if not higher than it is now.
Additionally the continued monetization of debt here as well as printing to finance the EU will drive inflation higher.

Real Unemployment 11 Percent; Total Unemployment 15.6 Percent

Mike Shedlock
Dec 03, 2011

Quick notes about the "falling" unemployment rate:


In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.
In November, those "Not in Labor Force" rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed.
Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Jobs Report at a Glance

Here is an overview of November Jobs Report, today's release.

US Payrolls +120,000
US Unemployment Rate Declined .4 to 8.6%
Civilian labor force fell by 315,000
Those Not in Labor Force rose by 487,000

Participation Rate fell .2 percentage points to 64.0%, nearly matching a low last seen in 1984

Actual number of Employed (by Household Survey) rose by 278,000
Unemployment fell by 594,000

Civilian population rose by 172,000

Average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours for the second consecutive month.
The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down 0.1 hour to 33.6 hours in November.
Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18

Government employment decreased by 20,000
The private sector has only recovered 33 percent of jobs lost in the peak-to-trough period of January 2008 to February 2010.

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

For the second month the labor force rose. This is a welcome sign. However, were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.

November 2011 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) November 2011 Employment Report. http://www.bls.gov/news.release/pdf/empsit.pdf

The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. Government employment continued to trend down.

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted



Notice that actual employment is lower than it was nearly 11 years ago.

Nonfarm Employment - Payroll Survey - Monthly Look - Seasonally Adjusted



Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs.

In the last year of the weakest recovery on record, 2.5 years old, the economy averaged about 131,000 jobs a month.

Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat.

Nonfarm Employment - Payroll Survey Details - Seasonally Adjusted



Average Weekly Hours



Index of Aggregate Weekly Hours



Average Hourly Earnings vs. CPI



"Success" of QE2 and Operation Twist

Over the past year, average hourly earnings of all employees have increased by 1.8 percent. The consumer price index for all urban consumers (CPI-U) was up 3.6 percent from October 2010 to October 2011.
Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18 in November after increasing 12 cents over the prior 2 months.
Not only are wages rising slower than the CPI, there is also a concern as to how those wage gains are distributed.

BLS Birth-Death Model Black Box

The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey. http://www.bls.gov/web/cesbd.htm

The BLS has moved to quarterly rather than annual adjustments to smooth out the numbers.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey http://www.bls.gov/ces/ces_quarterly_birthdeath.pdf

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth Death Model Adjustments For 2011



Birth-Death Notes

Do NOT subtract the Birth-Death number from the reported headline number. That is statistically invalid.

It is exceptionally rare to see negative numbers in birth-death adjustments in months other than January and July. Data for much of this year actually seems reasonable.

Household Survey Data



In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.

Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Table A-8 Part Time Status



Part-time status is essentially right where it was a year ago.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.



Distorted Statistics

Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers. Digging under the surface, the drop in the unemployment rate is nothing but a statistical mirage.

The official unemployment rate is 8.6%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

While the "official" unemployment rate is an unacceptable 8.6%, U-6 is much higher at 15.6%.

Falling unemployment rate would normally be considered a good thing, but not if it is happening because 1,793,000 people stopped looking for work.

Things are much worse than the reported numbers would have you believe. The entire economic picture is on very thin ice given the clear slowdown in the global economy.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

http://finance.townhall.com/columnists/ ... page/full/