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Sunday, June 3, 2012

800,000 New Private Sector Jobs in May?

We added 800,000 private sector jobs in May.. in unadjusted numbers.  
What does that mean? 

From this article at the Wall Street Journal:
"May was not kind to the jobs report this year, with nonfarm payrolls coming in at a weak 69,000. Last May was weak as well. Beyond that, though, the numbers look different. Some commentators this morning have been saying May is usually a bad month for jobs, but the numbers don’t back that up. 

So by now we all know that May’s dismal 69,000 jobs created is the cherry on a particularly toxic sundae, the worst of three months of weakening jobs growth. ....
Last year, May was similarly weak: only 54,000 jobs created, snapping a streak of three months with more than 200,000 jobs created. ...

But in 2010, May saw 516,000 jobs created. That, clearly, is not a weak number...."

Well, Wall Street Journal, how soon we forget!

May 2010 also happened to be the month in which we hired hundreds of thousands of 2010 Census workers. Those 400,000 (in unadjusted numbers) government workers that month actually adjusted up to 432,000 seasonally adjusted government jobs. We added 713,000 “real” private sector jobs that year, which adjusted down to only 84,000 private sector jobs.  Voila, 516,000 new jobs in seasonally adjusted numbers.  (Follow this link if you don't understand what we mean by "seasonally adjusted" or "seasonal adjustments" to jobs numbers.)

So, because of the 2010 Census, you can't really compare May this year to May 2010.

But since the author is extolling May 2010 (and shouldn't be):  How does May 2010 compare with May 2011 and May 2012?

In 2011, we added 735,000 “real” private sector jobs, which adjusted down to 108,000. Last month, in May 2012, we added 800,000 "real" private sector jobs which adjusted down to 82,000 private sector jobs.  That's actually on a par with 807,000 “real” private sector jobs in 2005 (which adjusted down to +143,000 private jobs), and 813,000 “real” private sector jobs in 2006 (which adjusted down to +9,000 private jobs.)  Remember that unadjusted "real" numbers refer to the number of jobs that your friends, family members, and neighbors actually started in a given month.  
In fact, here are the numbers of new private sector jobs in unadjusted numbers for May going back to 2001:
  • 2001: +661,000
  • 2002: +666,000
  • 2003: +772,000
  • 2004: +928,000
  • 2005: +807,000
  • 2006: +813,000
  • 2007: +925,000
  • 2008: +538,000
  • 2009: +338,000
  • 2010: +713,000
  • 2011: +735,000
  • 2012: +800,000
(Those numbers are all from the BLS site, tables CES0000000001, CEU0000000001, CES0500000001, CEU0500000001, CES9000000001, and CEU900000001.)
Well, this jobs report isn’t glorious, but perhaps it isn’t all that bad. This is the MOST private sector “real” jobs that employers have added during May in the past FIVE YEARS.

What about all of those people who are now employed?
732,000 MORE people (in UNADJUSTED numbers) are employed this month. That is the highest additional number of workers in May (in unadjusted numbers) since 1999. In ADJUSTED numbers, 422,000 MORE people working is the highest additional number of workers since 1994. (These numbers are also from the Bureau of Labor Statistics.. tables LNS12000000 and LNU02000000.)

Here’s another oddity, considering everybody is going nuts over the May job numbers.  In terms of new workers, we have never added as many new workers in the first five months of the year as we did this year (2,046,000) ….going back to 1984 in unadjusted numbers, and going back to 2000 in adjusted numbers (1,497,000). And, in both seasonally adjusted and unadjusted numbers, we now have more workers than we had when Obama was inaugurated.
“What’s the point? The point is that you can’t just dismiss this month’s report by saying, well, May’s a bad month. May can be a good month, too. This report was bad all on its own.”
Perhaps.  But can the highest number of additional people reporting themselves as employed in the first five months of the year since 1984 really be all bad?

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