Skip to comments.The Unemployment Decline: Good or Bad News?
Posted on 12/05/2011 6:36:42 AM PST by SeekAndFind
The official unemployment rate fell by an impressive (and statistically significant) 0.4 last month, from 9.0 percent in October to 8.6 percent in November. 8.6 percent is the lowest rate since March 2009.
"Signs of Hope," cheered the New York Times. The Washington Post said that economists "liked what they saw." (But not all economists.)
Was the unemployment decline really good news, or was it bad news disguised as good?
Let's start with jobs. Payroll employment rose only modestly in November, by 120,000. The payroll data, collected from employers, have monthly sampling error of about 100,000, so the November gain passed the test of statistical significance. Nevertheless, it was barely enough to absorb the normal increase in the labor force due to growth in the working-age population. There was nothing left over to lower unemployment.
And keep in mind that the payroll data are a measure of jobs, not a head count of employed persons. To the extent that new jobs go to people already working in another job, the increase in the number of persons employed is less than the recorded rise in jobs.
By comparison, the number of civilians employed as measured by the government's household survey showed a 278,000 rise last month. However, the change was well within the large 436,000 monthly sampling error range for that survey, so it failed the test of statistical significance. Economists have traditionally placed greater reliability on the payroll employment data than on household-measured employment.
What did mainly lower unemployment?
A look at the labor force participation rate tells the story. In November it fell by a statistically significant 0.2, from 64.2 percent to 64.0 percent, as more of the unemployed in the face of a weak job market gave up looking for work and withdrew from the labor force.
(Excerpt) Read more at realclearmarkets.com ...
The numbers will be revised down as usual and will turn into more bad news.
Gee, who’da thunk that stores would be hiring during their busy holiday season?
RE: Gee, whoda thunk that stores would be hiring during their busy holiday season?
For a recent history of the “decline” in unemployment rate, look at the Thanskgiving and Christmas seasons of the previous 3 years....
I have a bridge to sell in Brooklyn
John went on to report that about 80 percent of that decline was due to "an unusual surge in discouraged workers."
In other words, things are getting worse, not better, despite the government's best pre-election holiday season hype.
I predict that just the right number of job seekers will become discouraged to create a 6% unemployment figure in late October 2012.
Yep, some people forget that the numbers actually show a net decrease in jobs. If the economy were counting jobs at the 2007 level we just went over 11%. In terms of under employment we are over 23% and average length of unemployment has exceeded that of the great depression, presided over by the incompetent, Communist infiltrated, lefty, FDR.
There is no point in arguing with Communists, if you let them define the argument.
It is neither one. It is a lie, deception at best. The numbers exclude those who are no longer eligible for unemployment and those who are no longer looking. Cooking the books does not make a meal for the hungry kids of the obama unemployed.
FUBO & FAD
Unemployment Decline To 8.6%: A Statistical Fluke?
Posted 12/02/2011 07:05 PM ET
Jobs: Americans woke up Friday to the good news that the unemployment rate had dropped sharply from 9% to 8.6%. On closer inspection, the decline is highly questionable and doesn’t warrant a surge in optimism.
The White House hailed the news as “further evidence that the economy is continuing to health” and proving the $447 billion stimulus proposal “is the right medicine” for what ails us. Some in the media likewise saw good news, with headlines such as the Boston Globe’s “Unemployment Drops To Lowest Since 2009.”
We’re not trying to be Grinches, but the decline in the unemployment rate is highly suspect for many reasons.
The number is derived from a huge survey of 60,000 households the government takes each month. In November, the survey showed the labor force shrank by 315,000. That shrinkage makes the unemployment rate look a lot better than it is.
This is questionable because in the previous three months, the labor force increased by 323,000 workers on average. Statistically, a one-month reversal in the size of the workforce of more than 600,000 people just doesn’t make sense unless an awful lot of people threw up their hands in disgust and quit looking.
And that’s what seems to be the case. The labor participation rate declined to 64% from 64.2% a month before. Usually, it rises when jobs are growing as people rejoin the labor force.
“Some of the decline relates to the aging of the U.S. population, but a substantial portion of the decline reflects the lack of well-paying jobs, and it (is) driving people from the labor force, discouraged,” wrote economist Anthony Crescenzi of bond giant Pimco.
That is not good news.....
I fear these numbers are Political Science run amok. To me, the “science” in Political Science is how to manipulate numbers to influence people. We see this in the climate change crowd, and in the polling being done. Why not in the labor department. Anywhere statistical sampling and estimates are used is open to misuse. That is the “science” in Political Science - garbage in, garbage out. I don’t trust anything coming out of the Obama administration.
It’s not good or bad. It’s fake.
The unemployment percentage only counts those receiving benefits. After 99 weeks, those benefits run out and those still unemployed are uncounted. I’ve heard from varying sources that the real percentage is closer to 15-20%. Include those who are underemployed and that percentage goes up even further.
This report is lie, spin and falsehoods.
When is the media gonna get that we are NOT buying this BS anymore?
Take a look at what our labor force is, and where it was in say 2000. Our labor force is SHRINKING, drastically. This is revealed most clearly when you look at the numbers of people who have stopped looking for work, and are no longer eligible for the 99 weeks of unemployment because it’s run out. That is how much our labor force SHRUNK BY in a month’s time. Add to that the numbers of new claims for unemployment and what do you have?
The Great Depression is the ONLY thing you can compare this to.
Screw the fact that the “New” claims for unemployment fell, look at how many gave up and youhave unemployment numbers closer to 13%.
We are not buying the spin any more DC. Take heed.
[Quote] In 2009, the World Socialist Web Site wrote that the current government-corporate offensive is aimed at fundamentally restructuring class relations in the US. There is to be no return to the conditions that existed prior to the current economic crisis. The aim is nothing less than the destruction of all that remains of the gains won by previous generations of workers and the impoverishment of the entire working class.
(Whether by intent or just by greed, it looks like it is working.)
And our population is growing, so the % of unemployed / underemployed is actually much worse.
If one simply took the MSM/Democrap spin at face value then everything would be just spiffy.
I should say the “Establishment” because quite frankly there are “republicans” who are as much a part of the problem.