…if we have to drive the labor force participation rate down to zero. As I’m sure you know by now, the September jobs report this month saw the unemployment fall to 7.8% with 114,000 jobs added. How could the rate fall so much with so few jobs added? Because the labor force participation rate accounted for most of the decline.
Basically, the Department of Labor stops counting people as unemployed when they’ve given up looking for a job completely. Once that happens they’re no longer considered unemployed.
The Right Blogosphere is crying foul over the report, suggesting that the BLS is cooking the books. I don’t think they’re cooking the books so much as what they’re reporting has so little bearing on the world we actually experience that it’s pretty darned hard to relate the two.
However, that having been said, there are other reasons to be suspicious about the employment situation reports coming out of the Bureau of Labor Statistics. Chief among them are that it’s pretty obvious that the birth/death ratio, the fudge factor that the BLS uses to account for startups and businesses that close their doors, has been out of calibration for a very long time. We just don’t aren’t seeing the number of startups that we used to or that we should be.
BTW, anybody who says that the decline in LFPR is due to seniors retiring early is full of it. A lot of seniors can’t afford to retire. They’re staying at work much longer than they (but not I) anticipated.
Despite the decline in the headline unemployment rate this is a terrible, horrible, no good, very bad employment situation report.
Actually that’s not it at all. The Household Survey shows an increase of 873,000 jobs in September. 873,000!
Now if you believe that suddenly 873,000 people found jobs last month when establishments have only been adding about 110,000 jobs a month for the last several months, then I’ve got some lovely villas I’d like to sell you. They sit beside some lovely canals – on Mars.
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I’d said they’d get UE-3 down to 7.5% no matter how much they had to cheat to do it. Looks like my timing was off (I thought by mid-Summer) but that’s what they’re doing.
Here are key paragraphs from the report itself:
I’m looking at the establishment survey (reported farther down the page). The household survey number is, as The Economist put it, “a statistical anomaly”. However, that reminds me of a story. I was once sitting next to an elderly self-made millionaire at an auction. That was when a million was a lot of money.
We struck up a conversation (I’m generally inclined to strike up a conversation with anybody I’m sitting next to). He regaled me with stories from his youth and how he came up the hard way. At one point I said “Fascinating”. He said “That there’s a college education for you. You say ‘Fascinating’. I say ‘Bullshit’.”
What? The BLS should count as unemployed the housewife that has absolutely no intention of getting a job for the next 10 years? Or how about the retiree that is no longer going to work until he drops over dead? Unemployed? I guess in a sense, but it is unnecessarily skewing the unemployment numbers higher.
Granted, people who would like to work, but have simply given up probably should be counted, but no matter how you slice it somebody is going to bitch like there is no tomorrow. The definition, for good or ill, hasn’t changed so really lets stop whining about this.
You keep saying this, but the next question that pops into my head is how do you know this? Is it intuition, anecdotal evidence, are you looking at some other data source?
Why do you believe this number, but not the Household Survey number on employment? Same source…seems to me you should be skeptical of both no? Or is it that one fits with your view of the world, the other not so much?
It’s the economy stupid. Obama is really in big, big trouble, IMO.
I’m looking at another data source. I’ll see if I can dredge it up. There’s been a continuing decline in the number of startups over the period of the last 25 years.
Here’s one source. I’ll see if I can find others. Another one.
The household survey number is, as The Economist put it, “a statistical anomalyâ€.
But it is that anomaly that accounts for the headline 7.8%, which is all most people will see.
The actual numbers of unemployed probably aren’t as bad as some might think. How many unemployed are working in the shadow economy? We just don’t know but I’ll bet you the numbers are significant.
How many unemployed are working in the shadow economy?
I knew a few doing that. It was enough to supplement bad situations, it wasn’t anything like having a real job. And the fact of the matter was those doing that were a small number of the unemployed people I knew.
The real unemployment number is actually worse than it appears. A lot of people are stating that they’re consultants and running their own one-person businesses now so as to not have gaps in their resumes. A lot (probably most) of those jobs generate zero revenue, but still get counted by the BLS. (I’d look up the line-iten for that but frankly I just don’t care.)
Again, every month I meet more professionals that just lost their jobs. I hear about very few “success” stories of people getting hired anywhere, and most of those are jobs like WalMart greeters. Look up the percetage of temp & part-time jobs for the jobs added during this recovery. Look up the percentage of jobs added that are low-wage. Even the jobs being added suck compared to what was lost.
The employment situation is a complete fucking disaster.
Doesn’t matter…Greg Sargent of the WaPo still considers you to be the moral equivalent of a truther for not believing Obama has led us to the promised land of just under 8% unemployment…..
“Despite the decline in the headline unemployment rate this is a terrible, horrible, no good, very bad employment situation report.”
That employment rate is a product of ideology, one in which involuntary unemployment does not exist and people never lose jobs, they just choose to pursue leisure time. Is it a surprise the government actively references a measure which understates how badly the economy is doing, making incumbents look much better than they should? From the government/media narrative you wouldn’t know there were other ways to measure unemployment.
So the adds came from an uptick in government hiring, an uptick in Self-Employed (as I’ve mentioned, that’s often a BS stop-gap from people trying to hide resume gaps) and a surge in part-time hires.
In other words, this report sucks ass and the President thinks that a bunch of people (allegedly) getting one shift at McDonald’s is a sign that things are going fantastic. He is the most cynical man I have ever read about in American politics.
@Icepick
I think it’s fairly obvious unemployment is a priority for neither candidate.