NOV Fri, Dec 2: +178,000 jobs. Unemployment rate drops to 4.6%.NOV details here!.. Jobs since Obama took office?... Unemp. rate under Obama?

Friday, October 5, 2012

What Was the Unemployment Rate When Obama Took Office Compared To Now? (September 2012 update)

This report has been updated for AUGUST 2016 HERE


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All August 2016 reports and details HERE.
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This report is outdated.  For current reports, please click on one of the links above. 



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

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 today's (September 2012's) unemployment rate?   7.8%



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?
  • What Caused the Rise in Unemployment When Obama Took Office?  Obama caused the unemployment rate to rise?  (Continue reading; the answer  is below.)
  •  What Was the Unemployment Rate When Bush Took Office?  How high did it rise?  (The answer is also below.)  
The following chart shows unemployment in three month intervals:





The Unemployment Rate When Obama Took Office:
  • For the record, when Obama took office in January 2009, the "official" unemployment rate in seasonally adjusted numbers was 7.8%, with 12,049,000 people reporting themselves as unemployed and actively looking.  142,187,000 people were working in January 2009.*  (These numbers are adjusted slightly since original publication as the Bureau of Labor Statistics updates its numbers.  The original January 2009 unemployment rate reported by the BLS in February 2009 was 7.6%)  
  • In "raw" numbers not adjusted for seasonal variance, the unemployment rate was 8.5% with 13,009,000 people reporting themselves as unemployed and actively looking for work.  140,436,000 people were working in numbers not adjusted for seasonal variance.
The Unemployment Rate at its Peak: 
  • At the "trough" (bottom in terms of jobs) of the recession in late 2009/early 2010, the "official" unemployment rate in seasonally adjusted numbers climbed to 10.0% in October 2009 with 15,421,000 people (out of a labor force of 153,822,000) reporting themselves as unemployed.   138,401,000 were working in October 2009; however, the lowest number of people working was reported in December 2009, when 137,792,000 people (in seasonally adjusted numbers) were working.    
  • In "raw" numbers not adjusted for seasonal variance, the unemployment rate reached a peak of 10.6% in January 2010 with 16,147,000 (out of a labor force of 152,957,000) reporting themselves as unemployed and actively looking for work.  Only 136,809,000 were working (in "raw" unadjusted numbers) in January 2010.

The Unemployment Rate NOW:
  • Now, in September 2012, the "official" unemployment rate in seasonally adjusted numbers is at 7.8%, with 12,008,000 (out of a labor force of 155,063,000) unemployed and actively looking for work.  142,974,000 people are working now.  (Last month 142,101,000 were working.  This is a increase of 873,000 people working in seasonally adjusted numbers.)  The unemployment rate  decreased by three tenths (.3%) of a percent as unemployment decreased by  456,000 and as 418,000 people entered the labor force in September.  (We have 1,059,000 more people in the labor force than we did in September 2011 and we have 2,867,000 more people employed than we did in September 2011.)  (The unemployment rate has now decreased 1.1% since October 2011 and has decreased 1.2% since September 2011.) 
  • In more volatile unadjusted "raw" numbers the unemployment rate is now 7.6%, an decrease of .6% since August, and a decline of 1.2% since September 2011, a year ago.  In "raw" real numbers, 11,742,000 (out of a labor force of 155,055,000) are unemployed and actively looking for work.  This is a decrease of 954,000 actively unemployed people in raw numbers since August.  143,333,000 are working now in "raw" numbers unadjusted for seasonal variation.  (This is an increase of 775,000 people working since last month.)

To Summarize the Unemployment Rate Now Compared to When Obama Took Office:
  • Using seasonally adjusted numbers, the unemployment rate was 7.8% (and rising quickly) when Obama took office, and it is 7.8% (and falling) today.   12,049,000 were officially unemployed back then, and 12,008,000 are unemployed today.  
  • Using nonseasonally adjusted numbers, the unemployment rate was already 8.5% when Obama took office, and it is 7.6% today.   13,009,000 were officially unemployed in "raw" numbers back then, and 11,742,000 are officially unemployed in "raw" numbers now. 

What Was the Alternate U-6 (U6) Unemployment Rate When Obama Took Office?
(I have just started to keep track of the U-6 number here in September 2012 with August data.  The U-6 number is based on the total of unemployed and underemployed as a percent of the total of the civilian labor force and the underemployed.  The underemployed include two groups of people:  1.  The number of people working part-time who want full-time work but can't find that work.  2.  The number of people who have not looked for work in the past month but are now ready to look for work.  These people did not look for work in the past month for one of these reasons:  Discouragement, sickness, childcare issues, transportation, education or training, "other".  All of these people had looked for work during the past year.)    
  • The alternate unemployment rate when Obama took office in January 2009 was 14.1% based on the most recent revisions available.  By February 2009, it had grown to 15.1%.  (The data reported in February reflects data collected as of the week of February 12th, 2009.) 
  • The alternate unemployment rate (U-6) peaked at 17.4% in October 2009. 
  • The alternate unemployment rate has descended to 14.7% over the past three years.  It has stayed the same since last month.
A Note on Government Unemployment Statistics Before and After Obama:

There has been NO CHANGE in the way that unemployment is counted or reported for the past two decades, and certainly NO CHANGE since Obama has taken office.  More information HERE on How Unemployment Is Calculated. 


What Was the Unemployment Rate When Bush Took Office in January 2001?  (Added by popular request)
  • In seasonally adjusted numbers, the unemployment rate was 4.2% when Bush took office in January 2001.  The unemployment rate continued at 4.2% during Bush's first full month in office, Febaruary 2009.  6,023,000 people were officially unemployed at that time.    
  • In nonadjusted "raw" numbers, it was 4.7% when Bush took office in January 2001.  6,647,000 people were unemployed in "raw" numbers at that time.  
  • The adjusted unemployment rate went up to 6.3% by June 2003, and then it began to decrease.  That's an absolute increase of 2.1% in 29 months.  That's a relative increase of 50% in 29 months before it turned down.  
  • It went down to 4.4% in late 2006 and again in May 2007, and then began to increase, reaching 7.8%, an increase of 3.3% by the time Bush left office. That's a relative increase of 75% in 20 months.      
  • The unemployment rate went from 7.8% when Obama took office and 8.3% during Obama's first full month in office to the peak of 10.0% discussed above before it turned down.  That's an increase of 2.2%.   That's a relative increase of 28% in 9 months before the unemployment rate turned down.
  • The following chart compares and contrasts the relative increase in the unemployment rate under Bush and Obama during their first 44 months (from inauguration until September of their respective fourth years in office).  The rate under Obama jumped up further in his first year in office, but came down more quickly.  Under both presidents, the unemployment rate comes down and goes up in any 3-6 month period.  (This chart will be updated with September data in the coming days.)   










What Caused the Rise in the Unemployment Rate When Obama Took Office?  Why has the Unemployment Rate Increased Since Obama Took Office?

These are questions I have received in my email, and I thought I would answer these questions here.

Well...as just mentioned, the unemployment rate was on its way up with a bullet starting in early 2008. The unemployment rate was 4.4% in mid 2007 before the full impact of the housing crash hit the labor market. Employment in construction hit a max in mid 2006 and had already started down by mid 2007, but most other employment sectors were not impacted. But by late 2007, the entire economy was starting to feel the impact of the housing crash. In a year and a half, from June 2007 until January 2009, the unemployment rate went from 4.4% to the 7.8% discussed above. 

That's why we say that Obama inherited a rapidly-increasing unemployment rate. Why did it continue to rise after Obama took office? It takes a while for any government policy to take effect. Both TARP, the bank bailout signed by Bush in late 2008, and ARRA, the stimulus signed by Obama in February 2009, needed time to take effect, and that simply did not happen immediately. How long does it take to turn around the proverbial aircraft carrier vs. a speed boat? However, even though it took 9 months for the unemployment rate to max out (see the graph above) and start decreasing, the rate of increase slowed down by June 2009.

We can also think of the analogy of a fire: If a building is burning down, the fire department is called. It takes time for the fire department to put out the fire; it takes time for the fire to cool; it takes times for the debris to be hauled away. Only then can rebuilding start. And you certainly don't blame the fire department or the people who clean up the debris for the fire, do you? 

The question, "What Caused the Rise in the Unemployment Rate After Obama Took Office?" really makes no sense... The unemployment rate was rising rapidly before Obama took office, and it took a few months for policies to kick in and stem the job bloodbath. A better question would be "What Caused the Rise in the Unemployment Rate Starting in 2007?" The answer to that would be the housing crisis and the resulting crisis in banks and lending institutions. But that is outside the scope of this article.

What sources are you using for the unemployment data?

All of my employment number reports and graphs are based on monthly reports and data published by the Bureau of Labor Statistics. Monthly numbers reports are based on the monthly Employment Situation Report and Database tables published at the www.BLS.gov website.
The Employment Situation report includes month over month and year over year jobs numbers. 

The database tables that I use for the numbers here are: 
  1. Employment Level LNS12000000 (Seasonally adjusted) & LNU12000000 (Unadjusted).
  2. Unemployment Level LNS13000000 (Seasonally adjusted) & LNU13000000 (Unadjusted).
  3. Unemployment Rate LNS14000000 (Seasonally adjusted) & LNU14000000 (Unadjusted). 

You can find these tables by searching for these table numbers at the BLS website. My analysis is taken from the monthly BLS data copied to an Excel spreadsheet every month. I calculate detailed percentage increases/decreases, 3 month numbers, 2011 to date numbers, and I compare jobs numbers to those at the time of Obama's inauguration and at the "trough" of the recession.

Has Obama Redefined Unemployment?

No. 

No administration can define or redefine unemployment, nor what counts as a job or a worker in the BLS reports.

Changes are made to the questionnaires that are used to determine "employment" from time to time, but these questionnaires have not been changed for years.

My article about the subject is HERE, with links to BLS information about this.




Are independent contractors counted?  What about people who no longer receive unemployment benefits or who have exhausted all of their unemployment benefits?

Someone left a comment:
The one thing none of these reports show nor do any of the Government reports, and that is the number of independent contractors that are unemployed or the number of unemployed that the benefits have run out and they gave up on trying. These added in would make these numbers on the reports look miserable.
Both groups of people, the independent contractors, and the unemployed without benefits who are still actively looking for work ARE included in these numbers.  ALL numbers of people who are unemployed, working part-time, or who want work have come down significantly over the past year to 18 months. 

10 comments:

  1. Molly, After a dissussion with my wife this morning it prompted a question of what was the unemployment rate when President Obama took office? Your explaintion of it was succinct and I felt fact filled without bias. Thanks for doing the homework.

    ReplyDelete
    Replies
    1. Thank you! I write this column and update the numbers and graphs every month.

      Delete
  2. You don't even sight which surveys the Labor Dept. used. For instance, the Labor Dept last month opted to use the less scientific household survey because it favored Obama more. There are 346,000 jobs claimed as a gain last month to bring us to "7.8", yet no one knows which sectors they cam from and the media isn't asking. You are an Obama tool Molly, and this "report" of yours has no credibility.

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    Replies
    1. Your knowledge of BLS stats is pathetic. The BLS uses the same numbers from the same surveys every month. There are two surveys: The Jobs numbers, from the CES (Establishment survey of employing establishments), and the employment/unemployment numbers from the CPS (Current Population Survey or Household Survey). Every month, the BLS reports jobs numbers, employment numbers, and the unemployment rate along with a myriad of other numbers and rates.

      Nowhere in last month's (September's) report does it report a gain of 346,000 jobs of any shape, size, or kind.

      The BLS does NOT decide to use one number one month and a different number the next no matter what you think. I would suggest you double check your sources of information because they are wrong.

      Nowhere in last month's (September's) report does it report a gain of 346,000 jobs of any shape, size, or kind. The unemployment rate went down for two big reasons: Many more people who were formerly unemployed reported employment. Many people who were not "in the labor force" decided to look for work and found jobs.

      Yes, there is a greater margin of error in the Household survey (which is always used to calculate the unemployment rate) than in the jobs (Establishment) survey, but that is always true, each and every month. That's why the unemployment rate jumps around a bit more than the jobs numbers.

      None of these reports were ever meant to be such a bell weather for the economy, as they are all best looked at over a period of months or one year over the previous, not one month vs. the next.

      I am not sure what an "Obama tool" is, but it is certainly better than whatever you are, which is uninformed and ignorant.

      Delete
  3. the sad thinks most dont thank the president from taking a bad economy and helping us survive it

    ReplyDelete
  4. Better yet ; What was the unemployment rate under Bush with a Republican Congress up until 2006 ? What was the unemployment rate under Bush after the democrats took over Congress in 2007 through 2009 ?

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  5. Thanks for this information. Really disturbing, I must say. It's just sad to see that we haven't felt any change since Obama took office. I don't have anything against the good guy, it's just that we no longer know where to seek ways on improving the employment rate in the US.

    ReplyDelete
    Replies
    1. Sorry, I missed your reply.

      I'm not quite sure how to respond. Where were you in 2009 and 2010? We were losing 800,000 jobs a month and up to 800,000 new unemployment claims a week around the time that Obama took office. Did you really expect that we would stop losing jobs and start adding jobs the first day Obama took office? It always takes a while to hit bottom and then to start to again add jobs. In Obama's case, the stimulus was passed in February 2009 and the first contracts went out in late March and April. The rate of job loss did slow in those first three months that Obama was in office.. then it took another few months for the economy to really show the first signs of turning around. This is not surprising at all. For many reasons, not the least of which was the depth of the financial chaos and also the desire of the Republicans to use the faltering economy as an excuse to regain the House in 2010 (which worked) and the Presidency and the Senate in 2012 (which didn't work) at the expense of the American people, the recovery has not been as quick as some would like.

      Of course we need more jobs! But that should not detract from the recovery that we have had. 6.1 million new private sector jobs after the worst economic collapse in 80 years is nothing to sneeze at.

      We can only imagine how well we'd be doing by now if the Republicans actually gave two cents about the American people instead of their corporate (and ALEC) bosses.

      Delete

I appreciate intelligent comments and questions, including those that are at odds with anything posted here. I have elected not to screen comments before they are published; however, any comments that are in any way insulting, caustic, or intentionally inflammatory will be deleted without notice. Spam will also be immediately deleted.