SEP 2014 jobs #: +248,000 jobs, Unemp. rate down to 5.9%. HERE! Jobs since Obama took office? HERE Unemp. rate under Obama? HERE

Friday, October 10, 2014

Are People Still Leaving the Labor Force in Discouragement and Despair? The FACTS HERE!

Let's put this myth of unemployed people "giving up" and leaving the labor force in discouragement and despair to rest once and for all. 


The # of unemployed was 16 million in late 2009, and now about 9.2 million people are unemployed (and the population is much greater).  The unemployment rate has fallen from a peak of 10% in late 2009 to September's rate of 5.9%.  But the Republicans keep claiming that the reason the unemployment rate is falling is due to the fallling labor force participation rate, which they attribute to people just "giving up" in despair and misery of finding a job. But that is simply not true!


Here's the truth:

The number of people leaving the labor force, the number of people who have given up their search for work (the blue line at the bottom of the graph below) in discouragement, despair, and misery is declining rapidly, and that number is greatly eclipsed by the number of people entering the labor force (the yellow line at the top) - and by the number of people who were previously employed who are leaving the labor force (the green line in the middle).  



                                              ===   People entering the labor force
                                              ===   Employed people leaving the labor force

                                              ===   Labor Force dropouts (Unemployed people who stop                                                                 looking for work)


Millions of people enter and leave the labor force EVERY MONTH.

First of all, we always have MILLIONS.. yes, MILLIONS.. of people leaving and entering the labor force every month.  The Bureau of Labor Statistics produces something called the Flows reports that tell us how many people moved from employment to unemployment, employment to "not in the labor force", unemployment to "not in the labor force", and from out of the labor force to back into the labor force every month.  ("Not in the labor force" refers to people 16 year of age and older who are not working nor looking for work.  People who are active military are not counted nor are people counted who are institutionalized.)

Since they've kept track of these "flows", starting in 1991, we've never had fewer than 1.4 million people a month on average DROP OUT from unemployment to "not in the labor force".  And we've never had fewer than 4.7 million people a month ENTERING the labor force.


For every ONE person "dropping out" of the labor force...

Right now, for every ONE person "dropping out" of the labor force after unemployment, we have THREE people entering the labor force and either starting work or starting to look for work!

And for every ONE person "dropping out" of the labor force after unemployment, we have almost TWO people leaving the labor force after being employed--  Think:  RETIREMENT!

The Labor Force Participation Rate is NOT the Unemployment Rate, not now, not ever, never has been.


Let's remember something else:  The Labor Force Participation Rate, the percentage of people in the civilian non-institutional population 16+ who are either working or looking for work, is NOT the unemployment rate.  Anybody who thinks it is is a blithering fool.  YES, the economy impacts the Labor Force Participation Rate.. but it is impacted more strongly by demographic trends:  
  • Baby Boomers graduating from school and entering the labor force in the 1970's and 1980's.  
  • Women entering the labor force in the 1970's and 1980's.  
  • And now, Baby Boomers retiring.. 
  • and the Baby Bust generation (born in the late 1960's and 1970's hitting the prime working ages).
I have more graphs to create and post:  The actual ratio of people who leave the labor force after unemployment over the past two decades; the actual ratio of people who leave the labor force after employment compared to the number of people who leave the labor force after unemployment (the labor force dropouts); the actual ratio of people who are entering the labor force comapared to the number of labor force dropouts.

I'll will probably link to a separate post when I get those graphs finished.

Potential Questions:

"This can't be true.  You Obama-lover, you must be making this up.  Because if this were true, the number of people in the labor force would not be going down."
Well...  The number of people in the labor force is actually going up.  Check it out HERE.

"But. but...but ... Labor Force Participation Rate! Oh, and as long as we are at it-- Benghazi!"

Look at that green line above.. The number of people leaving the work force after being employed.  Notice that it again is going up.  That's the major reason for the labor force participation rate going down...  Employed people are quitting their jobs and leaving the work force.  People in this great country of ours are STILL able to retire at some point.  And that's a good thing!   

Definitions:

The civilian non-institutional population 16+:  This is the basis for all employment and unemployment numbers.  It includes everyone living in the United States who is:
  • 16 or older
  • Not active military
  • Not institutionalized
  • There is no top age limit to be considered part of the civilian non-institutional population 16+.
Therefore, retired people, 16 and 17 year old kids in high school, kids in college, people raising and taking care of their families, 85 year old grandmas as long as they are living at home, people who are disabled and not working, are all part of the civilian non-institutional population 16+, along with all people who are employed or actively looking for work.

"Not in the labor force":  People in the civilian non-institutional population 16+ who are not employed and are NOT actively looking for work.

Labor Force Dropouts:  I count people who were unemployed (actively looking for work) one month and "not in the labor force" the next as the Labor Force Dropouts.
The Labor Force Participation Rate:  
The percentage of people in the civilian non-institutional population 16+ who are either working or looking for work.

Wednesday, October 8, 2014

Wool Being Pulled over the Eyes of the American Public?

"They are lying to us!" claims a "fan".

Reconciling first time unemployment claims data with new jobs data: 

"In the last 54 weeks we had 16,217,000 new sign up (first time claims) for unemployment . Creating 100,000 new jobs a week is a far (sic) figure thats needed , not a good sign , the wool has been pulled over the American public's eyes."

                                                                                          signed Anonymous 

Baaaa....



Sheep with wool pulled over his eyes found at SEIU's blog.
In other words, this person believes that we need at least 400,000 jobs a month to account for all of the people getting laid off and losing their jobs.
 

Is the administration pulling the wool over people's eyes AGAIN?

Is he right?  Is there really any wool-pulling going on? Or is this person just another "Unemployment Truther" (Thanks, Steve Benen of the Rachel Maddow blog over at MSNBC for that term.) with his pants in a bunch?

Other people out there may have the same question, so I decided to post his question and my answer here, in a separate blog article.

The issue is NET vs. GROSS numbers of jobs. 

Basically, Anonymous is confusing NET and GROSS numbers of jobs. The 200,000 new jobs each month is a NET number, meaning that we have 200,000+ MORE jobs than we did the last month. But it doesn't mean that ONLY 200,000 people have been hired in that month.

Let me see if I can explain:

What is the JOLTS report? 

The JOLTS (Job Openings, Layoffs, and Turnover Survey) report tells us the whole story of how many people have been hired for new jobs, how many people have been terminated, how many quit, etc. The JOLTS data is about 6 weeks behind the monthly jobs data, so the latest data that we have now is for July. (Note: August data was just released this morning, October 7th, 2014. I have not yet updated these numbers.) 

In July 1,632,000 people were laid off or fired. Altogether in July, there were 4,998,000 "separations" meaning people who left their jobs for any reason, most of whom quit their jobs. But 5,319,000 people were hired in July! Over time these numbers do balance out to the monthly jobs numbers.. but you can see that there were about 300,000 MORE people starting jobs than leaving jobs in July. 

Also, in July 1,200,000 people filed for first time unemployment, and, yes, about 16 million people have filed for first time unemployment claims over the past year. The 1,200,000 first time claims filings in July jive completely with the 1,600,000 people who were laid off or fired in July, as not all who are laid off or fired are eligible for unemployment benefits.

No Wool Here

OK, I hope this clarifies things.  No wool has been pulled over the American public's eyes, Anonymous.. Just a lot of data that a math-challenged, easily-brainwashed public doesn't understand.

Baaaaaa....

Sunday, October 5, 2014

A Tale of Two Charts? Is Labor Force Participation Really a Problem?

Labor Force Participation vs. Average Weekly Wage for Workers?  Hmmm... 

Republicans and Republican sympathizers have been all over President Obama and the Democrats about the "labor force participation rate"(*definition at bottom of page) over the last months, which has continued to decline even though the number of jobs has increased.

As I pulled up some graphs today, I noticed something that was not quite clear before... Now I should spend the time to put these graphs on top of each other, on the same graph, but I won't do that now; I think my point is clear just by looking at these two graphs:

Average inflation-adjusted weekly wages really rising?

Average Weekly Earnings (Inflation adjusted) of Non-Supervisory Private Sector Employees
 BLS data series CES0500000031.
Labor Force Participation Rate All Employees BLS Series LNS11000000



















A

First of all, notice the pattern in the top graph of inflation-adjusted wages for non-supervisory and production workers (excludes most of the rich guys and managers):  Notice that those wages rose in the late 60's, peaked in the early 70's, and fell until the mid 90's.  They climbed during those "glorious Clinton years", then meandered up and down, and only now, after the recession, have they again started to go up.  (Yes, inflation-adjusted weekly and hourly wages for production and non-supervisory workers have started to go up.)  They are now about where they were in the late 1970's or early 1980's.  Hard for some to believe, but this data comes from employers, and they aren't going to lie on the high side about what they pay their employees.

Compare inflation-adjusted wages and labor force participation.  Do you see it? 

Now look at both graphs:  What happened to inflation-adjusted wages as labor force participation rates went up?  And what has started to happen to wages as labor force participation rates have started to go down?  (Yes, there was a time in the late 1990's when both the average wage AND the labor force participation rate were going up, so I'm not trying to say that a drop in the labor force participation rate caused a rise in wages; I'm sure the relationship is more complex.)


Labor Force Participation:  The Good and the Bad 

I just read this comment at Facebook; the person was quoting Bloomberg, but provided no specific link:

I remembered it correctly - this from Bloomberg. (not who I first heard it from) "The share of the working-age population either employed or seeking a job declined in April for the first time this year, helping drive the unemployment rate down to 6.3 percent, the lowest since September 2008. At 62.8 percent, the so-called participation rate matches the lowest since March 1978. A shrinking workforce saps the U.S. of the manpower needed to boost the expansion to a higher level, keeping the world’s largest economy merely plodding along. It also undercuts the theory that sustained growth alone will be enough to attract more Americans, from students to people discouraged over employment prospects, back into the hunt for jobs. "

But a shrinking work force also forces companies to make their wages and benefits more competitive to attract the best and the brightest.. and to attract people back INTO the work force.  Now, if you are not in the labor force that means you aren't working nor are you looking for work.  If that is your situation, you (or a spouse or family member) must have some source of income.. or adequate assets, right?  I don't know of anyone who doesn't have assets or income who is not either working or looking for work.  You can't buy food or keep a roof over your head if you don't have some form of assets or income.  Perhaps some of those people would be enticed to go back into the labor market by decent wages or working conditions.  

It was pretty easy to get a job in the 1960's.

If you are older you may well remember how robust the economy was back in the 60's.  I often tell the story of my mother who returned to the working world when her kids were in junior high.  She had not worked for 13 years; she had no extra school, no certificates, nothing; she had helped our school as a Room Mother and through the PTA.  She looked through the ads, walked two blocks down to a small company, filled out a short application, perhaps took a typing test, and was hired the same day.  No credit checks.  No background checks.  No check of references, and, as I said, she hadn't worked or looked for work for about 13 years.  The labor force participation rate was much lower than it is now, employers really needed workers, and that was a good thing for workers.

Now looking for work is painfully difficult.  Not only are prospective workers still confronted with employers who have dozens of applicants for almost every job, but the hoops that prospective employees must jump through are absurd:  Many rounds of interviews, sometimes with panels of interviewers, background checks and more background checks, reviews of your online "reputation", then waits of weeks to months as the requisite checks and evaluations are made.  Unless you really have to work (as in no assets or income), it might just be a lot easier to stay home with your family, to retire, to go back to school.   

Good heavens, people:  They're RETIRING!

Remember also that the most of the decline in the labor force participation now is due to PEOPLE RETIRING.  The BLS keeps track of people leaving and entering the labor force.  In September, for every ONE unemployed person who "dropped out" and stopped looking for work, about TWO people who were EMPLOYED left the labor force.  Now why doesn't Fox (or Bloomberg for that matter) mention that to their readers?

Not only that, but for every ONE person who was unemployed and "dropped out" and stopped looking for work in September, about THREE people actually ENTERED the labor force and started either working or looking for work!

Yes, three times as many people are entering the work force as are "dropping out" of the labor force because they have "given up" looking for work.  Fox news won't tell you that either.

Definition of labor force participation rate:  The labor force participation rate is the percentage of people in the civilian non-institutional population aged 16+ who are either employed or actively looking for work. The civilian non-institutional population includes young people in high school and college, people who are retired, people who are disabled as long as they live at home or with relatives.

Friday, October 3, 2014

Little Tommy Tucker Sings for his Supper


Replying to a Rant about Phony Part-Time Holiday Jobs: 


It's unfortunate that so many people commenting about jobs numbers know so little about the subject.  They don't know very much about the labor market nor do they understand how these numbers are gathered or calculated.  They desperately want to believe that there is a "conspiracy" behind the jobs numbers or that the government (under that racist (?) Obama) is cooking the books.

No, fools!  There is no book cooking!  Just a complex subject that is going to elude most of the math-challenged low-information voters in this country.  

From Mother Goose's Rhymes 

Here's someone posting as Tommy Tucker to an article at MSN about today's jobs numbers:
this is just the goverment cooking the book's for mid-term elections. I say they end QE3. What they don't say in the report is that most of the job's supposedly created are PART-TIME.. Macy's is going to hire 86k PART-TIME SEASONAL WORKER'S and i bet they will lower the rate again under false pretenses.  
First, I believe that QE3 has just about ended; we will stop all of the bond-buying in the next couple of months.  But let me get to Tommy's major point, about "phony" part-time holiday jobs:

Seasonal adjustments

The jobs numbers reported are SEASONALLY ADJUSTED, which means that the temporary nature of most holiday hiring is accounted for when we hear about job increases.

Sigh.  I know this is a waste of time, but I'll explain a bit anyway.  Even in the worst of times, the retail industry generally hires HUNDREDS of THOUSANDS of employees between September and December.  September is usually the low-ebb month in retail numbers in the second half of the year. Even in fall of 2008, retailers added over 300,000 employees.
Now seasonal adjustments mean that we don't "count" additions of hundreds of thousands of jobs in retailing every fall.  700,000 retailer jobs in the fall generally "adjusts" to 10,000 to 50,000 additional jobs over three months. 2008's addition of 330,000 jobs "adjusted" to NEGATIVE 330,000, as the jobs calculation programs EXPECTED 650,000 to 700,000 new retail jobs in the 4th quarter.

The 86,000 Macy's jobs that Tommy is concerned about will adjust (as usual) to about 5 to 10,000 additional jobs, spread over 3 months.  Unless the retail sector as a whole adds more than about 650,000 jobs over 3 months, they may not even count for that much.  Last year 800,000 additional retail workers in the fall "adjusted" to about 120,000 more workers over three months.  

Let me summarize:  The jobs calculations EXPECT at least 650,000 extra retail jobs in the fall.  Unless the actual number of part-time temporary retail jobs falls far above or below this number, the change in the number of retail jobs reported is minimal. 

I really wish I could explain this a bit better so that at least a few people who think as does my friend Tommy Tucker would stop with the goofy "conspiracy" and "cooking the books" silliness.

OK, Tommy Tucker, perhaps with your post you "sang" for a couple of nickels from your Koch Brothers or Republican masters?  If so, you earned your supper.  Now you can eat your white bread with butter.   
 

How Many Jobs Were Created (or Lost) in September 2014?


In September 2014:
  • 248,000 TOTAL payroll jobs were ADDED in seasonally adjusted numbers.
  • 236,000 PRIVATE payroll sector jobs were ADDED in seasonally adjusted numbers.
  • 12,000 GOVERNMENT (federal, state, and local) jobs were added in September. 
  • 232,000 MORE people employed.
  • 671,000 MORE people employed full-time.  (Biggest increase in full-time workers outside of Census hiring since early 2005.) 
  • 384,000 FEWER people employed part-time.
  • 174,000 FEWER people employed part-time involuntarily.  (In other words, people who want full-time work but can't find it.)
  • 97,000 FEWER people in the civilian labor force (people either working or looking for work).
  • 329,000 FEWER people unemployed.
  • Unemployment rate drops significantly to 5.9% (from 6.1%) primarily due to the many fewer unemployed people and many MORE employed people in September.

September 2014 jobs numbers and unemployment reports were released Friday morning, October 3rd.  Details and further analysis will be published Friday afternoon and over the weekend.
 Please check back for latest numbers and charts!

How Many Jobs Has Obama Created or Lost? September 2014

How many NET jobs created or lost under Obama* as of September 2014?  How many private sector jobs have been lost or added during Obama's presidency?

How many new jobs in the last 5 1/2 years since Obama was inaugurated?  
How many Americans were working or employed when Obama took office... compared to now?


Numbers for September with latest revisions:

Since the "trough" of the recession in late 2009/early 2010 in seasonally adjusted numbers:
  • 9.8 million MORE jobs in total
  • 10.3 million MORE private sector jobs
  • 8.6 million MORE people working
How many workers were full-time or part-time at the "trough" of the recession in late 2009/early 2010 compared to now?

  • 8.7 million MORE people working full-time.
  • 120,000 FEWER people working part-time.  
  • (Yes, despite what you may have heard, from the depth of the recession until now, we have many more additional people working full-time vs. part-time jobs. When a recession hits, companies generally cut back on full-time workers first.  When companies start hiring again, the number of full-time workers increases.)

Since Bush left office & Obama took office (January 2009) in seasonally adjusted numbers:
  • 5.5 million MORE jobs in total
  • 6.1 million MORE private sector jobs
  • 4.4 million MORE people working

How many workers were full-time or part-time when Obama was inaugurated compared to now?

  • 3.5 million MORE people working full-time
  • 982,000 million MORE people working part-time


Have any private jobs been lost (net) over the past 55 months since February 2010?

NO!

  • 55 months of consecutive private-sector job growth.
  • The longest consecutive period of private-sector job increases since this number has been kept. 

Have any jobs been lost (net) over the past 48 months since September 2010?


NO!

  • 48 months of consecutive overall job growth.
Are more people unemployed now than when Obama took office in January 2009?  

NO!
  • Despite 1,652,000 MORE people in the labor force (either working or actively looking for work) now vs. January 2009, there are 2,796,000 FEWER people unemployed now than in January 2009. 





*What's the difference between "net" and "gross" jobs gained and lost?


Let's get something straight:  Jobs are lost every week and every month. People are fired, people are laid off, businesses or locations are closed and everybody is let go. 
 

Also people quit every week.  You yourself, dear reader,  may have quit a job at some point in time. 


But people are also HIRED every week and every month.  New businesses open, businesses expand, businesses replace people who have left or been fired.  Every week.  You yourself, dear reader, may have been hired for a job at some point in time.This happens in good times and bad. 

Yes, even in bad times, people are getting hired.  Even in good times, people are let go.  

Now:  The monthly jobs reportupon which this article is based, presents estimates based on surveys as to how many jobs are gained or lost in a given month.  Those numbers are based on the number of new jobs (people getting hired, businesses opening) MINUS the number of jobs that have been cut (people getting fired, people quitting, businesses closing or cutting back).

The monthly jobs report therefore reports NET job growth or loss.  


For 48 months in this country, we have had MORE jobs being added than we have had jobs being cut.  For 55 months in the private sector (not counting federal workers, state or local workers such as teachers, firemen, cops, or people who staff the DMV, only counting people who work for private businesses), we have had MORE jobs added than we have had jobs being cut.


To reiterate:  How many jobs have been created in the last 5 years versus how many jobs have been lost?
All numbers provided on monthly jobs reports, which is what the series on jobs created/lost under Obama is based, are NET jobs numbers.  In other words, they reflect gains after all job losses are subtracted, or they reflect job losses after all gains are added. 
For the past 55 months (as of September 2014), we have had NET gains in private jobs numbers every month.  In other words, in every month since February 2010, more private jobs have been created than have been lost.  In every month since September 2010, more jobs in total have been created than have been lost.
Fact check and important information on these jobs numbers...

The above jobs numbers are from the BLS jobs report of September 2014, which was released in early October 2014.  The surveys used to gather these numbers in August are taken as of the week which includes the 12th day of the month, in this case, September 12, 2014. 

What Was the Unemployment Rate When Obama Took Office (Compared to Now)? September 2014

What was the unemployment rate when Bush left office and Obama was inaugurated and took office? What was the unemployment rate when Obama came into office?  7.8% 

(Unemployment rate then and now on the graph below.)


What was the unemployment rate after Obama's first full month in office (February 2009)? 
 8.3%

What was the unemployment rate at peak?  10.0%


What is the unemployment rate now?  Today's unemployment rate (September 2014's)?   5.9%  


All Latest Jobs and Unemployment Reports HERE

How many people were looking for work when Obama was inaugurated; how many were working?  And how many people are looking for work and how many are employed now?

Please read below the graph.


The following chart shows the unemployment rate in three month intervals plus the last three months:





 Why are there two lines, one for "Seas Adjusted" and one for "Unadjusted"?

The Bureau of Labor Statistics uses seasonal adjustments to adjust for the volatility in the labor market from one month to the next.  The relatively even declining red line above shows the unemployment rate based on seasonally adjusted numbers.  The jagged green line shows the unemployment rate based on "real", "raw" numbers; the unadjusted rate.  Notice that the green line goes up in January (after holiday layoffs) and July (school-related layoffs), and it goes down in October and April, which are strong months for workers.  (Employees are all back to school in October, and employers are staffing up for the holidays.  Schools are also full in April and employers are starting to staff up for summer, construction, vacation venues, etc.)  The red line helps us to compare the unemployment rate over a period of months; the green line, however, reflects "reality":  Your friends, neighbors, and family members actually working or not working.  

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