FEB Fri, Mar 10:+235,000 jobs. Unemployment down slightly to 4.7%...FEB details coming.. Jobs since Trump took office?... Unemp. rate under Obama? (not yet updated)

Friday, May 2, 2014

Are the Unemployed Dropping Out of the Labor Force in Great Despair?

For Heaven's Sake!


Whenever a decrease in the unemployment rate is accompanied by a drop in the number of people in the labor force (that is, the number of people either employed or actively looking for work), the "pundits" and others will go nuts claiming that all of these unemployed people are so miserable, so discouraged, that they "gave up" looking for work. 


In the April 2014 numbers, just released this morning, the unemployment rate dropped by 0.4% of a point, and the number of people unemployed dropped by 733,000. But the number of people in the labor force dropped by 806,000 while the number of people employed dropped by 73,000. (The number of people employed full-time, however, rose by 412,000.) So... what does this mean? Why did people leave the labor force?


I haven't looked through all of the data yet, but it's very premature to claim that people are "so miserable", so discouraged, that they are not even BOTHERING to look for work. We have to remember that, in good times and bad, millions of people are hired, millions of people quit their jobs and stop working, millions of people stop looking for work, and millions of people START looking for work. People don't necessarily leave the labor force because they are discouraged and miserable; they often leave the labor force to retire, to return to school, to stay home with children. 


Until we've had a chance to see exactly which groups of people, people representing which age or educational groups, left or joined the labor force; until I look at the flows data to determine if the people who are leaving the labor force were previously employed or unemployed or new to the labor force, claiming that people are "giving up" their job searches, as many short-sighted writers are proclaiming this morning, is just plain folly.


Please remember also that there are employment "flows" data that show us that, over the past couple of years, more people who were employed are leaving the labor force vs. people who were unemployed. The decrease in the labor force participation rate is generally being caused by people leaving employment.  We can think "retirement".  We can also think of people going to school.


I did look at the table on 16-24 year olds put out monthly by the BLS, and I compared it to the report from last month: 


About 230,000 MORE young people are in school in April vs. March, but the number of these students who are in the labor force (working or looking) is just about the same. So that's about a third of the "labor force shrinkage".The rest of the "labor force shrinkage" is all in age groups under 40, not among older people who might be retiring.


But as I said, we shouldn't jump to any conclusions about the drop in the number of people in the labor force.. and, above all, we shouldn't conclude that people are "dropping out" of the labor force in deep despair. Absolutely no evidence of that.

April 2014 Unemployment Rate, Jobs

**********************************************************************
April 2015 numbers were released this morning, Friday, May 8.  Details HERE.  Check back for updates throughout the day.
  +223,000 jobs, Unemp. Rate down slightly to 5.4%.
*********************************************************************

The following are outdated.  They refer to numbers and reports for April 2014.  For current reports and numbers, please use the link above.





April BLS Highlights:

  • A generally good report, with a significant addition of jobs, The BLS reports that 288,000 payroll jobs were added in April, quite a bit higher than the projected range of 200,000 to 215,000 new jobs.
  • The BLS reports that 288,000 payroll jobs were added in April, quite a bit higher than the projected range of 200,000 to 215,000 new jobs.
  • February jobs numbers were revised upwards by 25,000 and March numbers were revised upwards  by 11,000.  Job growth has averaged 190,000/month over the past 12 months.  
  • Private jobs increased by 273,000.  Construction jobs increased by 32,000; manufacturing jobs increased by 12,000. 
  • Government jobs increased by 15,000. 
  • The unemployment rate dropped significantly to 6.3%  Much of the rate drop, however, was due to people leaving the labor force, which declined by 806,000.   (People dropping out in despair?  Read more HERE.)  # of people employed dropped 73,000 in seasonally adjusted numbers, but in unadjusted "raw" numbers, employment increased by 677,000.    (The unemployment rate comes from a different source than the number of jobs which is why the unemployment rate can increase even if the number of jobs increases.  Over time, these two numbers closely parallel each other.  The unemployment rate, however, is much more volatile than the jobs numbers.  Also, the unemployment rate is not directed related to the number of people getting unemployment benefits.  This is one of the biggest employment myths out there. MORE HERE.)   
  • The alternate unemployment rate (which includes part time workers who want full time jobs, discouraged workers, and marginally attached workers) DECREASED to 12.3%, a decrease of .04%, four-tenths of a percent, the lowest since October 2008. One year ago the alternate unemployment rate was 13.9%.   All alternate unemployment measures dropped significantly in April, however, a big reason for the decrease was that people left the labor force.   
  • The labor force decreased by 806,000 in April.  This is a very big decrease, particularly for April.  We'll have to look more carefully at this number to see exactly which segments of the population left the work force in April.
  • The number of people employed, including agricultural and self-employed, decreased 73,000 in seasonally adjusted numbers in April, but, in unadjusted "raw" numbers, it increased by 677,000 in April.  Full-time workers increased by 412,000 in April, while part-timer workers decreased 398,000.
  • Since the "trough" of the recession in late 2009/early 2010 in seasonally adjusted numbers:
    • 8.6 million MORE jobs in total
    • 9.2 million MORE private sector jobs
    • 7.7 million MORE people working* 
    Since Bush left office & Obama took office (January 2009) in seasonally adjusted numbers:
    • 4.3 million MORE jobs in total
    • 5.0 million MORE private sector jobs
    • 3.5 million MORE people working*

April 2014 reports: 

The following April Jobs Projections were posted earlier in the week:
  • ADP, the private payroll service, estimated a whopping 220,000 new private sector jobs in April, with big gains in construction. This is a big increase, about 30,000 higher than the average over the past year. ADP numbers are often considered a harbinger for the BLS numbers, usually released two days after the ADP report. First time unemployment claims in early April were lower than they have been since early 2007. Now we wait until tomorrow, Friday, to see what the BLS (Bureau of Labor Statistics) says.
  • Projections from Fox Business: 
     "The U.S. Labor Department’s monthly jobs report is due out Friday and the numbers are widely expected to show some improvement over the March figures, when 192,000 jobs were added to the economy and the headline unemployment rate held steady at 6.7%.Gus Faucher, senior economist at PNC Financial Services Group, predicted 200,000 new jobs were added in April and that the unemployment rate will tick lower to 6.6%. A broader consensus of economists is even more optimistic, forecasting the addition of 215,000 new jobs.Faucher predicted “continued solid growth, not fantastic but more than enough to absorb new entrants into the labor force plus some of those who’ve been unemployed.”"
    Just a note:  We only need about 65,000 to 80,000 jobs a month to account for population growth, as almost all of the population growth over the last decade has been in the older age groups, the age groups in which people start to leave the labor force due to retirement.
         
  • USA Today summarizes:
    Economists surveyed by Action Economics predict that U.S. payrolls overall, including governments, increased by 210,000 jobs last month. Average monthly gains for January through March were 176,000.  Economists also predict Friday's report will show the unemployment rate fell to 6.6% from 6.7% in March. The latest jobs data released Thursday showed initial claims for unemployment benefits rose for the third straight week to their highest level since late February.  First-time claims last week reached a seasonally adjusted level of 344,000, up 14,000 from a week earlier.  Economists' median forecast predicted a drop to 320,000, according to Action Economics survey.  Claims have been climbing since early April when they reached a seven-year low of 301,000, but less than half their peak levels (which) were over 600,000 a week in 2009.  Jobless claims are a proxy for layoffs, so higher numbers could suggest a weakening labor market. But analysts caution that weekly unemployment claims can be volatile, not least during the Easter-school spring break period.
Just a note here as well:  I definitely want to emphasize that comment on volatile claims numbers.  Seasonal adjustments are most hinky around holidays that move, such as Easter.  And the unadjusted numbers do not show any alarming increases.  So it would not be wise to make any predictions about layoffs until we have a couple more weeks of jobless claims to consider.

Jobs lost gained past year

April 2014 jobs numbers and unemployment reports were released Friday morning, May 2nd.  Graphs, details, and analysis will be published over the weekend and early next week.

 Please check back for latest numbers and charts!

How Many Jobs Were Created or Lost in April 2014?

**********************************************************************
April 2015 numbers were released this morning, Friday, May 8.  Details HERE.  Check back for updates throughout the day.
  +223,000 jobs, Unemp. Rate down slightly to 5.4%.
*********************************************************************

All latest jobs and unemployment reports from 2011 to 2015 HERE.
How many jobs lost or created in 2014? HERE! 


All April 2014 highlights and reports are listed HERE.


In April 2014:
  • 288,000 TOTAL payroll jobs were ADDED in seasonally adjusted numbers.
  • 273,000 PRIVATE payroll sector jobs were ADDED in seasonally adjusted numbers.
  • 15,000 GOVERNMENT (federal, state, and local) jobs were added in April. 
  • 73,000 FEWER people employed.
  • 412,000 MORE people employed full-time.
  • 398,000 FEWER people employed part-time.
  • 806,000 FEWER people in the civilian labor force (people either working or looking for work).
  • 733,000 FEWER people unemployed.
  • Unemployment rate drops significantly to 6.3% (from 6.7%) primarily due to the large number of people who left the labor force in April.

Private govt jobs gained lost Obama

April 2014 jobs numbers and unemployment reports were released Friday morning, May 2nd.  Graphs, details, and analysis will be published over the weekend and early next week.

 Please check back for latest numbers and charts!

How Many Jobs Have Been Created or Lost Under Obama? (April 2014 update)

**********************************************************************
April 2015 numbers were released this morning, Friday, May 8.  Details HERE.  Check back for updates throughout the day.
  +223,000 jobs, Unemp. Rate down slightly to 5.4%.
*********************************************************************
Note:  This report is outdated, reflecting data for April 2014.  For current numbers, please click the link above. 


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


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


Numbers for April with latest revisions:

Since the "trough" of the recession in late 2009/early 2010 in seasonally adjusted numbers:
  • 8.6 million MORE jobs in total
  • 9.2 million MORE private sector jobs
  • 7.7 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?

  • 7.9 million MORE people working full-time.
  • 182,000 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:
  • 4.3 million MORE jobs in total
  • 5.0 million MORE private sector jobs
  • 3.5 million MORE people working

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

  • 2.6 million MORE people working full-time
  • 920,000 million MORE people working part-time  










Have any private jobs been lost (net) over the past 
50 months since February 2010?
NO!
  • 50 months of consecutive private-sector job growth.

Have any jobs been lost (net) over the past 43 months since September 2010?

NO!
  • 43 months of consecutive overall job growth.
Are more people unemployed now than when Obama took office in January 2009?  
NO!
  • Despite 1,211,000 MORE people in the labor force (either working or actively looking for work) now vs. January 2009, there are 2,305,000 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 42 months in this country, we have had MORE jobs being added than we have had jobs being cut.  For 49 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 50 months (as of April 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 April 2014, which was released in May 2014.  The surveys used to gather these numbers in March are taken as of the week which includes the 12th day of the month, in this case, April 12, 2014. 


What was the Unemployment Rate When Obama Took Office Compared to Now? (April 2014)

This report updated for May 2014 HERE.


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 (April 2014's) unemployment rate?   6.3%  


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?

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.