Skip to comments.Everything You Should Know About the Big Miss Jobs Report
Posted on 01/11/2014 9:15:23 AM PST by Kaslin
Once again, the stats reveal much weakness.
Clearly, this is yet another bad report, with people dropping out of the labor force like mad.
Blaming the Weather
Amusingly, USA Today reports that "Paul Ashworth of Capital Economics says severe winter was the main culprit behind the disappointing job gains."
Did economists not know it was cold outside when they gave USA today their estimates? I guess not.
December BLS Jobs Statistics at a Glance
Additional Notes About the Unemployment Rate
The population rose by over 2 million, but the labor force fell by over a half-million. That's your declining unemployment rate in a nutshell.
Note last bullet point above.
The household survey shows a gain of employment averaging a mere 114,500 a month. Meanwhile, the payroll survey shows a rise of 182,000 jobs a month.
The rational explanation is a massive growth in part-time jobs.
I asked the BLS to investigate this but they do not have the data. ADP has the data but denied the request citing privacy issues.
There are no privacy issues - All ADP need do is take counts of people working more than one job and compare to historical trends.
December 2013 Jobs Report
Please consider the Bureau of Labor Statistics (BLS) December 2013 Employment Report.
The unemployment rate declined from 7.0 percent to 6.7 percent in December, while total nonfarm payroll employment edged up (+74,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade and wholesale trade but was down in information.
Click on Any Chart in this Report to See a Sharper Image
Unemployment Rate - Seasonally Adjusted
Employment History Since January 2009
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Change from Previous Month by Job Type
Hours and Wages
Average weekly hours of all private employees fell 0.1 to 34.4 hours. Average weekly hours of all private service-providing employees rose 0.1 to 33.2 hours.
Average hourly earnings of production and non-supervisory private workers rose $0.05 to $20.32. Average hourly earnings of private service-providing employees rose $0.03 to $20.12.
Real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly. For 2013, one needs to factor in the increase in payroll taxes for Social Security.
For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?
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.
The Birth-Death numbers are not seasonally adjusted, while the reported headline number is. In the black box the BLS combines the two, coming up 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 2012
Birth Death Model Adjustments For 2013
Once again: Do NOT subtract the Birth-Death number from the reported headline number. That approach is statistically invalid.
In general, analysts attribute much more to birth-death numbers than they should. Except at economic turns, BLS Birth/Death errors are reasonably small.
For a discussion of how little birth-death numbers affect actual monthly reporting, please see BLS Birth/Death Model Yet Again.
Table 15 BLS Alternate Measures of Unemployment
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Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said "better" approximation not to be confused with "good" approximation.
The official unemployment rate is 6.7%. However, if you start counting all the people who 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.
U-6 is much higher at 13.1%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Labor Force Factors
Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%.
And the discrepancy between the Household Survey and the Establishment survey sticks out like a sore thumb.
Any good American with our nations best interests at heart would do the same - but then you read what is coming out in Gates' book and it all makes sense.
Weird arithmetic. How could jobs “grow” by such a paltry figure, while layoffs were even GREATER, and the jobless rate, as reported, fall to its lowest level since the Current Regime came into the White Hut?
They are cuffing lying, and all the whitewash and varnish applied will STILL not make a lick of sense when future history is written (assuming anyone ever actually digs out the truth).
Of course the economy is poised for a big comeback according to our dear reader and the MSM. Any day now. :-)
No. If you were 0bama you would have gone down the same road and still stay his course. It’s only because you are not 0bama that you would have taken a different path. Yes I understood your point but I wanted to compliment your thinking. ;)
But the dishonesty of the government and of the press -- that's unprecedented in this country. Forget the economy for a minute. The immorality, the dishonesty, the sheer lust for political power -- I see no easy way to fix these problems.
Just like Stalin.
Every year of his reign the communist collective system would birth yet another crop failure.
Every year the politburo would blame it on weather...
I sense a ‘pivot to the economy’ and a ‘recovery spring’ on the way. Can’t wait!
Of course, or that arrogant pos occupant of the Spite House blaming everyone but himself
“labor force declined by 347,000.”
Just a BS made-up number. They exclude people claiming because the economy is so bad they have not found a job then they are not looking for one.
USSR: “Tractor sales are up, so Food production is too.”
235 million adults in the US.
113 million with jobs - 48% have a job, 52% do not.
36 million salaried full time: 15% of total adults, 85% work part time.
Those are terrible numbers.
I don't think it's new or unprecedented. What's new is the level of gullibility of the electorate. When people got raped by the Obastard economy, they liked it. How else can the election of '12 be explained?
Economist and global warming scientists probably have the same degree of accuracy.
Everything you need to know...
It’s Bush’s fault.
Denny's Manager: "Linda, that's the 3rd time this week you spit on a customer's food; you're fired"
Denny's Manager: "Sally, I like your credentials; you're hired."
Obama Admin: "Another job created!"
48% are pulling the wagon while 52% are riding in the wagon.
Also, the 52% are now dependent on the party in power now to keep their cash flow coming. No wonder the dimrats want to give amnesty to the 75 million Mexicans in our country.
They will never lose another election. But given how the 2012 one went, I don’t have any faith in national level elections any more.
Totally agree. The drain plug has been lifted and the death spiral has begun.