AUG: +151,000 jobs. Unemployment rate steady at 4.9%. AUG details here!.. Jobs since Obama took office?... Unemp. rate under Obama?

Friday, September 5, 2014

What Was the Unemployment Rate When Obama Took Office (compared to now)? August 2014

November 2014 jobs summary and highlights were released this morning, Friday, December 5th.  Details HERE.

This article has been updated for November 2014 HERE. 




What was the unemployment rate when Bush left office and Obama was inaugurated and took office? 
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 (August 2014's) unemployment rate?   6.1%  


All Latest Jobs and Unemployment Reports HERE
August 2014 Jobs Numbers, Unemployment Reports Listed 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?

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.  


  • 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 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 12,079,000 people reporting themselves as unemployed and actively looking. 142,153,000 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 15,382,000 people (out of a labor force of 153,887,000) reporting themselves as unemployed.   138,421,000 were working in October 2009; however, the lowest number of people working was reported in December 2009, when 138,025,000 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 August 2014, the "official" unemployment rate in seasonally adjusted numbers is 6.1%, with 9,591,000 (out of a large labor force of 155,959,000) unemployed and actively looking for work. 146,368,000 people are working now.  (Last month 146,352,000 were working.  This is an increase of 16,000 people working in seasonally adjusted numbers.)  The unemployment rate decreased 0.1% to 6.1% as the number of unemployed decreased by 80,000.  The labor force DECREASED by 64,000 people in August.  (August is a transitional month for labor as young people leave the work force, getting ready to return to school, but new teachers generally have not entered the work force.  Some, but not all, of this change is reflected in seasonal adjustments.)  We have 524,000 more people in the labor force than we did in August 2013, 2,189,000 more people are employed than a year ago, and 1,665,000 fewer people are unemployed than we were unemployed a year ago in August 2013.  (The unemployment rate has now decreased 1.1% in the year since August 2013.)  

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 6.1% (and generally falling) today12,079,000 were officially unemployed back then, and 9,591,000 are unemployed today.  

What Was the Alternate U-6 (U6) Unemployment Rate When Obama Took Office?
(I started to keep track of the U-6 number here in September 2012.  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 includes, in addition to the "official" unemployed, 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 is 12.0% now, in August 2014. A year ago, the alternate unemployment rate was 13.6%.  The main reason for the .2% decrease this month was a decrease in the number of people who are involuntarily working part-time (in other words, people who want to work full-time but can't find full-time jobs.) 

What Caused the Rise in the Unemployment Rate When Obama Took Office?  Why did the Unemployment Rate Continue to Increase for 11 months after Obama took office?


These are questions I have received in my email, and I thought I would answer 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, year 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 two to three years.

12 comments:

  1. http://online.wsj.com/articles/mortimer-zuckerman-the-full-time-scandal-of-part-time-america-1405291652

    There has been a distinctive odor of hype lately about the national jobs report for June. Most people will have the impression that the 288,000 jobs created last month were full-time. Not so.

    The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn't distinguish between new part-time and full-time jobs. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.

    Only 47.7% of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but that's worth barely a Bronx cheer. It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone quit looking for work.


    Last month involuntary part-timers swelled to 7.5 million, compared with 4.4 million in 2007. Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill. Federal Reserve Chair Janet Yellen had it right in March when she said: "The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate."

    There are a number of reasons for our predicament, most importantly a historically low growth rate for an economic "recovery." Gross domestic product growth in 2013 was a feeble 1.9%, and it fell at a seasonally adjusted annual rate of 2.9% in the first quarter of 2014.

    But there is one clear political contribution to the dismal jobs trend. Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama's "signature legislation"? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.

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    Replies
    1. You said:

      "It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce."

      I hear this so so so many times, the news always refers to those who are "no longer looking for work" maybe you will finally explain this to me. What do those who drop "out of the workforce" do to make a living or keep paying bills? If it is not a Full or part time job, are they doing absolutely nothing to make ends meet?

      I am very eager to get an answer to this question.

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    2. Here is a pretty good article about the long-term unemployed:

      http://datatools.urban.org/features/longtermunemployment/index.html

      Since you are so eager, some names and pictures are even included in the article.

      I guess the answer is doing what ever it takes to make ends meet- rely on gov't assistance such as food stamps, withdraw money from retirement accounts, live with relatives, friends, or public shelters. Take any low-paying(even those that pay cash under the table) job you can find until the economy booms again.

      Delete
    3. Ajibola Robinson, thank you for your comment.

      You and Anonymous are talking aobut two different groups of people. The people considered "long-term unemployed", the people written about in the article referenced by Anonymous, are NOT the labor force drop outs; the people in the article are unemployed and they are included in the unemployment rate. They are all STILL LOOKING FOR WORK. They have NOT dropped out of the labor force.

      I always ask myself the same thing when I read about all of those who have "dropped out": How are they feeding themselves and keeping a roof over their heads? Anyone who knows anything about the people without employment knows that able bodied people without children are eligible for very little in terms of welfare-type programs. I believe you can only get 3 months of food stamps now if you are able-bodied and have no children, and that amounts to very little.

      My suspicions, therefore, are that the people who have "dropped out" of the labor force, meaning they are not looking for work, are people who have reasonable or significant assets behind them, people who have a working spouse or other working family member, people who have the option of taking early Social Security; students who really don't need a job (but would work if they could get a job). If you are dirt poor and have a couple of kids and no other income, you may qualify for TANF, but you have to look for work or get training to participate in that program and get benefits. Some people go back to school, but that means that you have a source of income to support yourself as you go through school, again, either family or perhaps student loans.

      I also feel that if someone hasn't looked for work for over a year, they really can't be that hard up for work. I haven't heard yet of ONE person who is miserably unemployed who hasn't been solidly looking for work, with very few breaks.

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  2. Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be. It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. In the process, they are losing critical time to develop workplace habits, contacts and new skills.

    Most Americans wouldn't call this an economic recovery. Yes, we're not technically in a recession as the recovery began in mid-2009, but high-wage industries have lost a million positions since 2007. Low-paying jobs are gaining and now account for 44% of all employment growth since employment hit bottom in February 2010, with by far the most growth—3.8 million jobs—in low-wage industries. The number of long-term unemployed remains at historically high levels, standing at more than three million in June. The proportion of Americans in the labor force is at a 36-year low, 62.8%, down from 66% in 2008.

    Part-time jobs are no longer the domain of the young. Many are taken by adults in their prime working years—25 to 54 years of age—and many are single men and women without high-school diplomas. Why is this happening? It can't all be attributed to the unforeseen consequences of the Affordable Care Act. The longer workers have been out of a job, the more likely they are to take a part-time job to make ends meet.

    The result: Faith in the American dream is eroding fast. The feeling is that the rules aren't fair and the system has been rigged in favor of business and against the average person. The share of financial compensation and outputs going to labor has dropped to less than 60% today from about 65% before 1980.

    Why haven't increases in labor productivity translated into higher household income in private employment? In part because of very low rates of capital spending on new plant and equipment over the past five years. In the 1960s, only one in 20 American men between the ages of 25 and 54 was not working. According to former Treasury Secretary Larry Summers, in 10 years that number will be one in seven.

    The lack of breadwinners working full time is a burgeoning disaster. There are 48 million people in the U.S. in low-wage jobs. Those workers won't be able to spend what is necessary in an economy that is mostly based on consumer spending, and this will put further pressure on growth. What we have is a very high unemployment rate, a slow recovery and across-the-board wage stagnation (except for the top few percent). According to the Bureau of Labor Statistics, almost 91 million people over age 16 aren't working, a record high. When Barack Obama became president, that figure was nearly 10 million lower.

    The great American job machine is spluttering. We are going through the weakest post-recession recovery the U.S. has ever experienced, with growth half of what it was after four previous recessions. And that's despite the most expansive monetary policy in history and the largest fiscal stimulus since World War II.

    That is why the June numbers are so distressing. Five years after the Great Recession, more than 24 million working-age Americans remain jobless, working part-time involuntarily or having left the workforce. We are not in the middle of a recovery. We are in the middle of a muddle-through, and there's no point in pretending that the sky is blue when so many millions can attest to dark clouds.

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    Replies
    1. I'm not sure what you are quoting, and I don't entirely disagree with those comments. But with some cavaets: Yes, the civilian non-institutional population 16+, the basis for all labor numbers, has increased about 16 million from August 2007 until now, August 2014, BUT.. and here is a really big BUT: The civilian non-institutional population that is 55+ has increased about 16 million, and the population 65+ has increased about 9 million. The number of people 25 to 54 has actually declined. With all of the growth in the population coming among the oldest segments of the population, it is hard to tell how short we are in jobs... Probably not anywhere close to 10 million. 55+ people are starting to retire and leave their jobs.

      Actually, the unemployment rates among the older workers are fairly low. Now, there are many older people out there who are unemployed and do want to work, but the unemployment rates among this segment of the population are low. People who lose their jobs when they are older often can restructure their retirements and/or take social security and/or use other retirement assets. They may not have the standard of living that they hoped to have in retirement, but most of them will not be suffering greatly.

      The analysis of high-wage vs. low-wage jobs has been conducted by NELP, and has usually been misinterpreted. NELP has not been very clear on what their numbers represent. They can't look at the number of low-wage vs. high-wage jobs if they are looking at BLS data because that data is not available. They look at the number of people working in high-wage vs. low-wage industries. In other words, they look at industries in which the median wage is low and say that 44% of new jobs are in such industries. But that doesn't mean that all 44% of those new job holders will have salaries below that low median wage. By definition, half of the people in a low-median wage industry have wages ABOVE that low median wage.

      About the 24 million working age people out of work, that's just Republican hogwash, designed to convince low-information voters that they would be better off if they put the Republicans back in power. We have more people moving back INTO the work force over the past few years who either start working or start looking for work than we have people who were unemployed who stop looking for work and who leave the work force. The BLS has those numbers, but the right wing pundits couldn't bother with actually looking at those numbers and figuring out what they mean. They would much rather bellow to their low-information audience that "millions of people have dropped out of the work force". Not true. And the NUMBER of people in the labor force reached a peak in July 2014.. We have NEVER in this country had so many people in the civilian labor force. Bet you had no idea of that, did you?

      I'll try to return and write more about these topics.

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    2. >55+ people are starting to retire and leave their jobs.

      The opposite is true actually-the proportion of those 55 and older not in the labor force fell by 1.9 percentage points between 2007 and 2013, and 0.8 % more of them are working today than in 2007.

      2007
      Employed Unemployed Not in labor force
      16-24 53.1 6.3 40.6
      25-54 79.1 3.1 16.9
      55+ 37.4 1.2 61.4

      2013
      Employed Unemployed Not in labor force
      16-24 46.5 8.6 45.1
      25-54 75.9 3.1 18.6
      55+ 38.2 2.2 59.5

      Percentage-Point
      Change
      Employed Unemployed Not in labor force
      16-24 -6.6 2.3 4.4
      25-54 -4.1 2.0 1.6
      55+ 0.8 0.9 -1.9

      Sadly, during the same period the proportion of those 16-24 not in the labor force increased by 40.6 percentage points between 2007 and 2013, and 6.6 % less of them are actually working today than in 2007.

      The same can be said about the 25-54 group-the proportion of those 25-54 not in the labor force increased by 18.6 percentage points between 2007 - 2013, and 6.6 % less of them are actually working today than in 2007.

      Also, we have about 229,349,000 people under 55 and about 37,971,000 in 55-64 group in 2012 according to the Census Bureau(see below).

      Number Percent
      All ages 308,827 100.0
      Under 55 years 229,349 74.3
      55 to 59 years 20,470 6.6
      60 to 64 years 17,501 5.7
      65 to 69 years 13,599 4.4
      70 to 74 years 9,784 3.2
      75 to 79 years 7,331 2.4
      80 to 84 years 5,786 1.9
      85 years and over 5,006 1.6

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    3. The tables didn't display correctly. So It might be better if you look at Table 2 from http://www.heritage.org/research/reports/2014/09/not-looking-for-work-why-labor-force-participation-has-fallen-during-the-recovery

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    4. Please see table 2 of http://www.heritage.org/research/reports/2014/09/not-looking-for-work-why-labor-force-participation-has-fallen-during-the-recovery

      By the way, 55-65 group is considered to be mostly working in general, not in retirement as you sort of imply. The trend is they are actually more likely to stay in the workforce past 65. In addition to living longer, wage stagnation and bad economy in the past several years, there are many studies and articles pointing out that many older Americans have not saved hardly enough for retirement and will need to work even longer before they can retire.

      Delete
  3. I am not a fan of GWB, but the average unemployment rate during Bush's 2 terms is just over 5%.

    Since 2009 we consistently have between 8 million to 9 million part-time workers who are seeking full-time jobs but are unable to find one (http://www.npr.org/2014/08/01/337094697/as-labor-market-advances-millions-stuck-in-part-time-jobs).

    Moreover, the Census Bureau reported on Tuesday that the median income of the US household was $51,900 in 2013 which is in fact 8% lower than in 2007.

    The annual GDP growth has been incredibly small during the recovery and high-wage industries have lost a million positions since 2007. Low-paying jobs are gaining and now account for 44% of all employment growth since employment hit bottom in February 2010, with by far the most growth—3.8 million jobs—in low-wage industries. The number of long-term unemployed remains at historically high levels, standing at more than three million in June.

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  4. >ALL numbers of people who are unemployed, working part-time, or who want work have >come down significantly over the past two to three years.

    I disagree. The number of involuntary part-time workers have stayed stubbornly high- about 9 million in 2009 and around 7.5 million today. What has come down during the recovery is the labor-force participation rate- 66% in 2008 and 62.8% today. The median US household income has come down too: it is about 8% lower today than in 2007.

    Moreover, since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be.

    IMHO, regularly posting short-term job creation statistics is not very useful and can be quite misleading. It does not, for example, tell you that our high-wage industries have lost a million positions since 2007. Also, it doesn't tell you that low-paying jobs are gaining and now account for 44% of all employment growth since employment hit bottom in February 2010, with by far the most growth—3.8 million jobs—in low-wage industries. The number of long-term unemployed remains at historically high levels, standing at more than three million in June.

    In fact, if you post short-term job creation statistics of past recoveries from pretty severe recessions, you will see much better numbers in terms of the quality of the jobs being created, GDP growth, labor participation rate, wage increases, etc.

    Mortimer Zuckerman(a Democrat by the way) has said it best:

    Five years after the Great Recession, more than 24 million working-age Americans remain jobless, working part-time involuntarily or having left the workforce. We are not in the middle of a recovery. We are in the middle of a muddle-through, and there's no point in pretending that the sky is blue when so many millions can attest to dark clouds.

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    1. As I have written over and over, something that simply will not sink into the heads of many people, this has been the WORST recession in 80+ years, since the Great Depression. And it had different causes than, say, the Reagan Recession of the early 1980's. It is quite frankly a miracle that things did not completely fall of the cliff back in 2008-2009 as they did in the early 1930's.

      "ALL numbers of people who are unemployed, working part-time, or who want work have >come down significantly over the past two to three years."

      "I disagree." You disagree? Do you disagree that 2 X 2 is 4? Or that 3 > 2?

      The number of involuntary part-time workers has come down 22% from the peak in late 2009 and early 2010. In the best of times, back in the Clinton years, at least 2% of the employed people were "involuntary part-timers". Now that percentage is number is 4.9%. At its peak, in late 2009, it was about 6.5%. So, while still not where we want this percentage to be, that percentage has decreased significantly, about 40% of its best-of-time rate.

      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.