Skip to comments.The Unemployment Rate Drop Does Not Change My Recession Outlook
Posted on 10/06/2012 6:40:51 AM PDT by blam
The Unemployment Rate Drop Does Not Change My Recession Outlook
Mike "Mish" Shedlock, Global Economic Trend Analysis
Oct. 6, 2012, 6:29 AM
The establishment report of +114,000 jobs was pretty much about what most expected. The four-month average is a mere 120,000 a month (a very weak set of establishment numbers for this point in a recovery).
However, the household survey surprise shows the unemployment rate fell three-tenths of a percent to 7.8%.
On the surface, this is a solid showing, and 100% certain to boost the Obama campaign. I suggest these numbers will overshadow a horrendously weak performance by the president in the debate.
That said, a closer look shows the entire drop in the unemployment rate can be attributed to a surprise rise of 582,000 in part-time workers. U-6 unemployment remained at 14.7%. U-6 includes part-time workers who want a full-time job.
Still, all things considered, this was the strongest report in four months.
Does it change my recession outlook?
No, it doesn't. A one-month potential outlier based primarily on a rise in part-time employment, accompanied by other weak data does not change my perception.
Jobs Report at a Glance
Here is an overview of the release.
September Payrolls +114,000 - Establishment Survey Four-month average +120,000 - Establishment Survey US Employment +873,000 - Household Survey Involuntary Part-Time Work +582,000 - Household Survey Baseline Unemployment Rate -.03 at 7.8% - Household Survey U-6 unemployment did not drop. It remained at 14.7%. The Civilian Labor Force +418,000
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.
Quick Notes About the Unemployment Rate
US unemployment rate -.3 to 7.8% In the last two months the unemployment rate dropped .5% Reversing
(Excerpt) Read more at businessinsider.com ...
Remember when the UE rate went from 8.3% to 8.2%? It was due to people whose unemployment benefits expired. Look for some better news next month... perhaps 7.5%.
Most of these people are unemployed and their emergency benefits have run out. Despite what you hear there is a limit on the benefits an unemployed gets. More than that sometime around Jan 14th EVERYBODYs federal emergency benefits end because thats when the program expires. It does not matter if someone has just got on emergency unemployment in August, October or december - they all stop on that date.
What the republicans should do is put up a bill that extends the emergency unemployment benefits for 3 - 6 months. And offer cuts in other places (preferably in places Harry Reid would not like to see cuts) to offset the cost of the emergency unemployment.
This will put Harry Reid and his party in a very difficult position (between a rock and a hard place). It will NOT look good if his party votes against the unemployed victims of this pResident.
If this had been done earlier we would not be seeing 7.8% unemployment because the more people that get back into the program the higher the unemployment rate will reflect Realville as it heads up toward 11%.
Most likely we will see another drop in the unemployment rate next month. This is the time that those who went on emergency unemployment expire and are no longer counted as unemployed. This benefits Obama.
Mitt Romney is right, the rate is dropping as peoples unemployment benefits expire.
who ever believes the unemployment rate dropped ..say cheese
Normally the democrats see this issue as a way to win votes (even if the UE rate were at 6.9%) But no one of them is calling for an extension of UE benefits (which expire for all in Jan).
If there were a republican in the WH, an extension of UE benefits would be their PRIMARY issue this election year and not contraceptives and gay marriage.
The silence is deafening. There's a BIG reason for this.
If people do not lose their UE benefits the unemployment rate would be well above 8.3% today and probably above 9%.
I keep screaming:
WHAT IS THE AMOUNT OF PAYROLL TAXES TAKEN IN BY IRS?????
That is the true reflection of employment and earnings. Let’s see the curve for last 4 years!!!!!!
Aaaaaaand who is counting closed private businesses and number of signs “for rent”???
Yeah, private sector is doing fine!?!
Forward to commie “paradise”!
I have seen estimates that call 11% the "base" rate and 18% or more the true rate.
oh sure ..biggest rate drop in 70 years...I believe it(wink)
“””Most likely we will see another drop in the unemployment rate next month. This is the time that those who went on emergency unemployment expire and are no longer counted as unemployed. This benefits Obama.”””””
I bet the people that ran out of unemployment benefits and can’t find a job would disagree with that.
Here’s a video that shows how Obama likes to manipulate the jobs numbers
The 7.8% number makes me think a recovery is far less likely to come soon. Because that number means that we are no longer willing to tell the truth about the economy or the situation we’re in.
If we can’t tell the truth about what exists, what hope do we have of solving any of our problems?
Depression . . assuming truth still matters at all.
Yeah, it’s been going on four years. Why isn’t it a “depression”?
133,561,000 workers Jan 2009
133,500,000(P) workers Sept 2012
Total Non Farm Payroll Seasonal Adjusted
Bureau of Labor Statistics