Remember those ZERO Jobs last August? Revisions change things..

Do you remember last August, when it was reported that we had no net job growth?

The Republicans had a field day with that ZERO. But the next month, that estimate was revised upwards, and that estimate has continued to be revised upwards. The most recent estimate is that we added 85,000 jobs during that "zero" month, followed by over 200,000 jobs in September.

The BLS CES (Establishment Survey) archives now show that we gained something like 400,000 jobs over that somewhat dismal third quarter. We also have the Business Employment Dynamics Report, which I’ve only started using, which shows that we actually gained about 750,000 jobs in that third quarter. That is actually more in line with the CPS (BLS Current Population Survey) numbers that show 722,000 more people as employed in that quarter.

So the dingy third quarter 2011, marked by the debt reduction standoff that harmed both the President and Congress, was actually part of “the largest net job gain since first quarter 2006″.

Here's how the initial jobs numbers compare to current revisions over the past 12 months:  (Notice that buried "zero"?) 

My point is that we can’t look at one month.. or even two… to determine if the job market is horrible or not that horrible. The March numbers were upwardly revised by about 34,000 jobs, and the April numbers may be revised as well.  We may later determine that they weren’t that bad after all.  Despite all of the whining about the April jobs numbers, we now have 168,000 more jobs than we thought we had on April 6, when the March numbers came out. 

What Has Obama Done to Create Jobs?

Can a President do anything to create jobs?  

Yes and no.  Fiscal and economic policies, government spending or lack thereof, general confidence, all have an impact on either the number of jobs directly or the economic condition of a country which will influence the number of jobs.  But to say that a President is strictly responsible for the jobs created or not created during his administration is folly.  International tensions, in particular, tensions involving oil producing countries, can hamper economic growth.  A cooperative Congress can help a President pass policies that stimulate job growth; an obstructionist Congress can hinder job growth.  Economic conditions abroad, in Europe or Asia, can also help or hinder job growth here.

But here are three things that Obama was primarily responsible for that have helped with job growth:

1.  Stimulus.  According to the Congressional Budget Office, the stimulus was responsible for either the creation or the savings of at least three million jobs during the 2009 to 2011 period.  That does not include the multiplier effect, in which people with jobs buy things and keep other people employed.  

2.  GM Bailout.  The estimates of how many jobs were created or saved by the auto bailout, in particular, the GM bailout are from 1 million to 1.7 million.  Those jobs are providing at least 8 billion a year in income tax revenue, not counting sales tax revenue, FICA payments, and NO unemployment payments for the people still working.  HERE's a decent link explaining some of the issues. 

3.  Unemployment extensions and payroll tax cuts.  How many people have been kept out of abject poverty by up to two years of unemployment compensation?  And what was the multiplier effect of those millions of people receiving unemployment compensation.. as well as the multiplier effect of payroll cuts...on the economy as a whole?

Here's Media Matters on the issue from last December quoting studies done by the Economic Policy Institute:

Of the $72 billion increase in GDP related to continuing the unemployment insurance benefit extensions through 2012, some 37.4 percent, or $26.9 billion, would be recouped in higher revenues, as more people and firms pay taxes, and in lower expenditures. Consequently, the effective cost to the budget of continuing the UI benefits extension for a year is $18.1 billion instead of $45 billion. This means that the continuation of unemployment insurance benefit extensions through 2012 would save 560,000 jobs at an effective cost of around $32,000 per position. That alone is a good deal, but when we remember that these expenditures would assist millions of families of the long-term unemployed during the worst downturn in seven decades, the case for continuing the extensions could not be more clear. 

Now:  

Did all of the people complaining about job growth under Obama also complain about job growth under Bush?  Job growth under Obama, with much more trying circumstances, is just about the same or a bit ahead of job growth under Bush at a similar time in their respective presidencies.  Check out the article. 

Republicans Want People to Work Until They Drop

Why is the labor participation rate going down?  And is that a bad thing?  Is that also Obama's fault?

As the unemployment rate has started to decline, the Republicans now want to move the goalposts.  They want to count unemployment using the U-6 underemployment rate instead of the U-3 unemployment rate that has been used forever.  (More about this later.)   

And they want to say that people who are "not in the labor force" are really "unemployed".  Of course, most of those people "not in the labor force" are retired, in school, home with children, disabled.  The Republicans haven't yet managed to keep people from retiring, so they are now complaining about the declining "labor participation rate".

Here's what the labor participation rate graph (from the BLS website) looks like over the last 60 years:

Labor Participation Rate in the U.S. 1948 to present

This article at the National Journal talks about a poll in which people discuss whether or not they think they are better off than they were a year ago and whether or not they think they will be better off a year from now.  

Of course, many of the comments start with, "I'll be much better off when Obama is out of the White House." I did address some of those people, and you can see some of my comments down below the article.  But here is one comment by "Mojo the Awkward" that centers on the labor participation rate that I was easily able to debunk:

Here's a cute factoid. The month Obama took office, the labor force declined by more than 700,000. The average over the previous months was around 25,000.

The number of Americans 'not in the labor force' had risen steadily under Bush (although Bush did also create millions of net jobs - six million in his second term, which is rather more impressive than Obama's net 129,000 to date) - but the rate of its increase became steeper the day Obama was sworn in and has kept up that accelerated pace since (which is why there are now nearly 90 million Americans 'not in the labor force' but conveniently omitted from headline unemployment stats).

(I did not address his comments about Bush in my reply.  But I do talk about comparisons between Bush and Obama, including this poster's assertions, HERE, in the article "Private Sector Job Growth Higher Under Obama than Bush?") 

My reply to this person: 

Hard to imagine where people get their numbers.. None of this stuff is hard to find.

Do you know what the "labor force" is?  If not, I would suggest that you look it up.  In any case, the average labor force throughout 2008 was about 140,000 more than the average throughout 2009.  

What is the labor force participation rate anyway? 

The number "not in the labor force", while impacted by economic factors, is mostly influenced by demographics.  The labor force participation rate is the percentage of the number of people in the "civilian non-institutional population 16+" who are either working or actively looking for work.  The people who are not either working nor actively looking for work are "not in the labor force".  

The average labor force participation started to take off in the late 60's/early 70's, and it peaked at 67.1% in Clinton's second term.

It's gone down for many reasons, mostly due to demographics.  We've added 29,000,000 people to our "civilian non-institutional population 16+" since January 2001, and a whopping 21,600,000 of them are people who are 55 or over.  Since the Republicans haven't found a way (yet) of forcing us to work until we keel over, people 55+ are actually STILL retiring.  

Not only do the despicable Republicans want to cut benefits that might help older people retire, now they want to play with employment statistics and count seniors among the "unemployed" as well, as you attempted to do.  Why don't you and other Republican supporters think that people, after decades of working, deserve to retire while they are in decent health and can enjoy their golden years?  And the simple fact that most older people can still manage to retire (perhaps because the stock market is back up?) is somehow used AGAINST Obama?

Something else is happening that you Republican supporters might not be aware of:  The age at which the Baby Boomers can retire with full Social Security is now 66.   The vanguard of the Baby Boomers, people born in 1946, turn 66 this year.  We can expect that a hundred or two hundred thousands of such people are going to be exiting the labor force each month this year.. and each month for years ahead.

A lower labor participation rate isn't necessarily a bad thing. 

Let's be honest:  As much as the Republicans want to blame Obama for the falling labor participation rate,  a lower labor participation rate isn't necessarily a bad thing.  Back in the heyday of unions and high marginal tax rates, the labor participation rate was low as families could actually survive on ONE salary.  One parent, usually Mom, could actually stay home with the kids.  

The labor participation rate among older people went down around the time that Medicare was established.  Not a bad thing..  People didn't have to hang onto their jobs until they dropped to maintain medical insurance.  A lower labor participation rate also means that kids can go to and stay in school, high school or college, and many of them don't HAVE to work.  They can concentrate on their studies at least during the school year, which, as a parent and teacher, I always felt was a good thing. 

And we do ask people who are "not in the labor force" if they want to work (but haven't looked for some reason).  93% of them don't want to work.  Among people 55+, that number is even higher.  About 97% of those people do not want to work.

But you and other Republicans think it is a bad thing that people who want to retire can still retire.  

O.K., O.K., I know that complaining about the labor force participation rate is not the same as telling old people that they should work until they drop.  But if you are going to count an 80 year old Grandpa who hasn't worked for 20

years as "unemployed", well.. what's the connotation of "unemployed"?

In any event, will the original poster reply to me?  So far only crickets. 

Weekly Initial Unemployment Claims Unchanged (Week ending 5/12)

Initial Unemployment Claims Week Ending 5/19 HERE!

First time unemployment claims stable (Week ending 5/12).

First time unemployment claims were the same as reported last week, though the four-week moving average has decreased.  Claims have been stable this spring, as seen on the attached chart.

From the current report:

In the week ending May 12, the advance figure for seasonally adjusted initial claims was 370,000, unchanged from the previous week's revised figure of 370,000. The 4-week moving average was 375,000, a decrease of 4,750 from the previous week's revised average of 379,750.

The initial claims announced last week were 367,000, so the claims from that week were revised upwards by 3,000. 

The chart above is one of the BEST charts for understanding and observing changes in the weekly initial claims numbers over time.  This year (red-2012) and the past two years (green- 2011 and blue- 2010) are marked in different colors.  You can see that, as a trend, first time claims for unemployment have gone down SIGNIFICANTLY from one year to the next, even though there are variations within the year.  


Be aware that:  1.  These are first time claims, so people who have continued to receive benefits or who are losing any unemployment benefits would not be counted in these numbers.  2.  They are seasonally adjusted, so most variations caused by weather or holidays are already included in these numbers.  3.  As these are weekly numbers, they are more volatile than the monthly numbers.

You an also see that the April bulge, visible during the 1st-2nd week of April in all three years, has ended in 2012, with a return to first time claims levels of March.  As a comparison, the initial claims in April were around 260,000 in the year 2000, and about 300,000 in 2006 and 2007.  The current numbers of initial claims are the lowest springtime initial claims numbers since 2008.

The weekly report also tells us the number of people who are receiving unemployment benefits.  For the week ending April 21st, 6,273,624 people are receiving unemployment benefits under one of the programs that are available (regular state, extended benefits, federal extended unemployment compensation, or a few other smaller programs).  This compares with 12,500,000 people who are unemployed according to the monthly April unemployment situation report which was released last week.  Those numbers, showing that only half the officially unemployed are receiving benefits, should make it clear that people do NOT need to be receiving unemployment insurance to be counted among the unemployed.

Extended Benefits Expire

Many states have now "triggered" off of Extended Benefits.  Extended Benefits for those states, including California, Illinois, Florida, and several others, were due to end last weekend on May 12th.  On the current weekly report, as of the week of April 28th, 305,000 people are still receiving Extended Benefits.  However, within three weeks, we would expect to see the numbers of people receiving unemployment benefits in total and Extended Benefits in particular decline due to the end of those benefits.  So, while a decrease in the number of people filing for initial claims is a good thing and indicates that fewer people are being laid off, a decrease in the total number of people getting unemployment insurance may only show that fewer people are eligible for unemployment insurance benefits.

Any questions or confusion, please leave a comment or email me!

Happy Mother's Day! Social Security Needs to be Strengthened!

Social Security benefits need to be strengthened, not cut.

From the National Committee to Preserve Social Security and Medicare:

On average, women receive lower Social Security benefits than men. This Mother's Day, let's honor the women in our lives by supporting proposals that would improve benefits, not cut them. Here is a video from our Capitol Hill briefing this morning: http://cs.pn/LwSvIN 

Happy Mother's Day! 

Remember that the fastest growing segment of our population is women 55+.  We need a strong Social Security now more than ever to protect our mothers and the mothers of the future.  (And fathers as well...)   

More comments HERE.

Happy Mother's Day! Women 55+ Lead Population Growth!

Women 55+ are the fastest growing population group in the country over the past 11 years!

We've added 29,000,000 people to the "civilian non-institutional population 16+" since January 2001, the month that George Bush entered the White House.  37.4% of those people are women 55+, that big blue piece of pie above.  Now the number of men 55+ has also gone up substantially; 37.3% of those additional 29 million people are men 55+.  Notice the big red piece of pie.  (The "civilian non-institutional population 16+" is the base demographic used to determine employment, unemployment, and that elusive "not in the labor force" contingent.)  

No, this doesn't mean that millions of people over 55 are entering this country; it means that the huge Baby Boomer cohort, born in 1946 until about 1964, is getting older.  Expect the number of people 55+ to increase for another 5 - 10 years until the Baby Busters start to hit 55.  Now, the implications of this aging population are great:  Fewer people working, more people getting older and disabled, and more stress on our social safety net and health care systems.    

But for now, Happy Mother's Day, Moms & Grandmas 55 and over.  There are certainly a lot of us!  (And Happy Mother's Day to all of the Moms and Grandmas under 55 as well!)

Weekly Initial Unemployment Claims Numbers Stabilize

First time unemployment claims decrease.

First time unemployment claims dipped slightly, but are now stable over the last couple of months, as shown by the attached chart.  From the current report:

In the week ending May 5, the advance figure for seasonally adjusted initial claims was 367,000, a decrease of 1,000 from the previous week's revised figure of 368,000. The 4-week moving average was 379,000, a decrease of 5,250 from the previous week's revised average of 384,250. 

A few comments:  1.  These are first time claims, so people who have continued to receive benefits or who are losing any unemployment benefits would not be counted in these numbers.  2.  They are seasonally adjusted, so most variations caused by weather or holidays are already included in these numbers.  3.  As these are weekly numbers, they are more volatile than the monthly numbers.

The chart above is the BEST chart for understanding and observing changes in the weekly initial claims numbers over time.  This year (red-2012) and the past two years (green- 2011 and blue- 2010) are marked in different colors.  You can see that, as a trend, first time claims for unemployment have gone down SIGNIFICANTLY from one year to the next, even though there are variations within the year.  

You an also see that the April bulge, visible during the 1st-2nd week of April in all three years, has ended in 2012, with a return to first time claims levels of March.  For reference, the initial claims in April were around 260,000 in the year 2000, and about 300,000 in 2006 and 2007.  These are the lowest springtime initial claims numbers since 2008.

The weekly report also tells us the number of people who are receiving unemployment benefits.  For the week ending April 21st, 6,423,383 people are receiving unemployment benefits under one of the programs that is available (regular state, extended benefits, federal extended unemployment compensation, or a few other smaller programs).  This compares with 12,500,000 people who are unemployed according to the monthly April unemployment situation report which was released last week.  Those numbers, showing that only half the officially unemployed are receiving benefits, should make it clear that people do NOT need to be receiving unemployment insurance to be counted among the unemployed.

Any questions or confusion, please leave a comment or email me!