“Birth/Death” Numbers Show Unemployment Is Not Improving As Assumed

[marmar]

from 247WallStreet:



“Birth/Death” Numbers Show Unemployment Is Not Improving As Assumed
Posted: May 7, 2010 at 10:56 am


Factor in the birth/death numbers and the count on people who were “unattached” to the work force who became attached last month and real job growth was less than 50,000.

The government headline made the improvements in the jobless number look relatively good:

onfarm payroll employment rose by 290,000 in April, the unemployment rate
edged up to 9.9 percent, and the labor force increased sharply

Census Bureau hiring accounted for 66,000 of the 59,000 government jobs created in April but the plug number of the month is the +188,000 represented by the “birth/death” model According to Anecdotal Economics, ”That’s the BLS best-guess of how many net new jobs were invented by maybe some of the more than 9.2 million people involuntarily working part time or by maybe some of the more than 6.7 million people unemployed for more than six months.”

THE EMPLOYMENT SITUATION — APRIL 2010

Nonfarm payroll employment rose by 290,000 in April, the unemployment rate
edged up to 9.9 percent, and the labor force increased sharply, the U.S.
Bureau of Labor Statistics reported today. Job gains occurred in manufactur-
ing, professional and business services, health care, and leisure and hospi-
tality. Federal government employment also rose, reflecting continued hiring
of temporary workers for Census 2010.

Household Survey Data

In April, the number of unemployed persons was 15.3 million, and the unem-
ployment rate edged up to 9.9 percent. The rate had been 9.7 percent for the
first 3 months of this year. (See table A-1.)

Among the major worker groups, the unemployment rate for whites (9.0 percent)
edged up in April, while the rates for adult men (10.1 percent), adult women
(8.2 percent), teenagers (25.4 percent), blacks (16.5 percent), and Hispanics
(12.5 percent) showed little or no change. The jobless rate for Asians was
6.8 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks and over) con-
tinued to trend up over the month, reaching 6.7 million. In April, 45.9 percent
of unemployed persons had been jobless for 27 weeks or more. (See table A-12.)

Among the unemployed, the number of reentrants to the labor force rose by
195,000 over the month. (See table A-11.)

In April, the civilian labor force participation rate increased by 0.3 percent-
age point to 65.2 percent, as the size of the labor force rose by 805,000. Since
December, the participation rate has increased by 0.6 percentage point. The em-
ployment-population ratio rose to 58.8 percent over the month and has increased
by 0.6 percentage point since December. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes refer-
red to as involuntary part-time workers) was about unchanged at 9.2 million in
April. These individuals were working part time because their hours had been cut
back or because they were unable to find a full-time job. (See table A-8.)

About 2.4 million persons were marginally attached to the labor force in April,
compared with 2.1 million a year earlier. (The data are not seasonally adjusted.)
These individuals were not in the labor force, wanted and were available for work,
and had looked for a job sometime in the prior 12 months. They were not counted
as unemployed because they had not searched for work in the 4 weeks preceding
the survey. (See table A-16.)

Among the marginally attached, there were 1.2 million discouraged workers in
April, up by 457,000 from a year earlier. (The data are not seasonally adjusted.)
Discouraged workers are persons not currently looking for work because they be-
lieve no jobs are available for them. The remaining 1.2 million persons marginal-
ly attached to the labor force had not searched for work in the 4 weeks preceding
the survey for reasons such as school attendance or family responsibilities. (See
table A-16.)

Establishment Survey Data

In April, nonfarm payroll employment rose by 290,000. Sizable employment gains oc-
curred in manufacturing, professional and business services, health care, and in
leisure and hospitality. Federal government employment increased due to the hiring
of temporary workers for Census 2010. Since December, nonfarm payroll employment
has expanded by 573,000, with 483,000 jobs added in the private sector. The vast
majority of job growth occurred during the last 2 months. (See table B-1.)

Manufacturing added 44,000 jobs in April. Since December, factory employment has
risen by 101,000. Over the month, gains occurred in several durable goods indus-
tries, including fabricated metals (9,000) and machinery (7,000). Employment also
grew in nondurable goods manufacturing (14,000).

Mining added 7,000 jobs in April, with most of the increase in support activities
for mining. Since last October, mining has added 39,000 jobs.

In April, construction employment edged up (14,000), following an increase of 26,000
in March. Over the month, nonresidential building and heavy construction added 9,000
jobs each.

Employment in professional and business services rose by 80,000 in April. Temporary
help services continued to add jobs (26,000); employment in this industry has in-
creased by 330,000 since September 2009. Employment also rose over the month in ser-
vices to buildings and dwellings (23,000) and in computer systems design (7,000).

In April, health care employment grew by 20,000, including a gain of 6,000 in hospi-
tals. Over the past year, health care employment has increased by 244,000.

Employment rose by 45,000 in leisure and hospitality over the month. Much of this
increase occurred in accommodation and food services, which added 29,000 jobs. Food
services employment has risen by 84,000 over the past 4 months, while accommodation
has added 18,000 jobs over the past 3 months.

Federal government employment was up in April, reflecting the hiring of 66,000 tem-
porary workers for the decennial census.

Over the month, employment changed little in wholesale trade, retail trade, informa-
tion, and financial activities.

Employment in transportation and warehousing fell by 20,000 in April, reflecting a
large decline in courier and messenger services.

In April, the average workweek for all employees on private nonfarm payrolls increased
by 0.1 hour to 34.1 hours. The manufacturing workweek for all employees increased by
0.2 hour for the second straight month to 40.1 hours, and factory overtime was up by
0.1 hour over the month. The average workweek for production and nonsupervisory em-
ployees on private nonfarm payrolls increased by 0.1 hour to 33.4 hours in April.
(See tables B-2 and B-7.)

Average hourly earnings of all employees in the private nonfarm sector increased by
1 cent to $22.47 in April. Over the past 12 months, average hourly earnings have in-
creased by 1.6 percent. In April, average hourly earnings of private-sector production
and nonsupervisory employees increased by 5 cents to $18.96. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for February was revised from -14,000
to +39,000, and the change for March was revised from 162,000 to 230,000.

There are still over 15 million unemployed people in the US, so even if the economy adds jobs at the rate of 300,00 a month, unemployment will remain above standard “recovery levels” well into 2014. The number of long-term unemployed move up (27 weeks or more) to 6.7 million. This will almost certainly mean that Congress will have to extend tens of millions for un-budgeted dollars for unemployment insurance.

The number of people marginally attached to the work force rose to 2.4 million from 2.1 million in March, showing the level of capitulation of the those unemployed for over a year. However, 195,000 people were added to the pool through “reentry”. That is a process of people’s unemployment running out in many cases. And, it means that the work force will have to absorb an additional 105,000 people according to the April snapshot.


-- Douglas McIntyre


http://247wallst.com/2010/05/07/birthdeath-numbers-show-unemployment-is-not-moving/

[ipaint]

1. Thank you for posting this.

The spin in the media stories and the immediate dissemination of talking points here was thing to behold.

[girl gone mad]

3. Some days I think this administration is even more tone-deaf than the last one..

and that's saying something.

[ipaint]

4. Smarter and more tone deaf, it's a dangerous combination. nt

[amborin]

6. +1

[tonysam]

7. Bingo. You'd think with Biden there the administration would get a clue,

but it appears Obama is using him mostly for foreign policy.

Meanwhile, his advisers on the domestic front are as worthless as tits on a boar.

[amborin]

9. or worse yet

deliberately ignoring and papering over with press releases

[Donnachaidh]

18. that's also been our thought.

And the convergence of all the *good news* seems to be timed to counteract potential bad news. Orwellian Blue?

[OhioChick]

14. +1 n/t

[notadmblnd]

17. I don;t think it's tone deaf. I think people like Emanual and Geither

have a wall up between the people and Obama. They are only allowing Obama to see and hear what they want him to see and hear.



On another note, why does Obama's name still come up in spell check, and why can't that be corrected?

[awoke_in_2003]

35. We always said that Bush...

had a wall around him, hiding him from reality. Do we really think that Bush was the first (or last) president to have a wall between him and the people (though, admittedly, Bush's wall was probably approved by him)

[ShortnFiery]

2. But ... but ... BBBut.

[tonysam]

5. The truth needs to be told

It's going to be shitty for many, many years for jobseekers, and our elected officials refuse to do anything constructive about it.

It's positively terrifying to be self-supporting, over 50, and no job prospects in sight.

[Peacetrain]

8. So is this number just suddenly out there and has been calculated in to all previous job numbers?

Or is this a new goal post?

[DemocratSinceBirth]

10. IMHO, The Real Goal Post Is U6 And That's Seventeen Percent

U6 includes the unemployed, the underemployed, and those too discouraged to look.

[Peacetrain]

11. Which would make sense that adding new jobs that the Unemployment rate still climbs

Because people who have not been in the job mix for a very long time, are coming back in..

[ipaint]

13. The new jobs are ghost jobs.

188,000 statistical jobs. The birth/death calculation missed 824,000 unemployed americans last year. The statistic is a way to manipulate the numbers.

So we have 188,000 jobs that may or may not exist, 68,000 temporary (as in weeks) census jobs and about 36,000 real, verifiable, flesh and blood jobs. Now picture 800,000 uncounted unemployed surfacing in one month to look for one of those jobs in addition to the current counted unemployed and underemployed.


The U6 number is up and the number of long term unemployed continues to rise. 400,000 of those long term unemployed will be falling into abject poverty a month starting in a month or two. It was a little over 200,000 last month.
We have a millionaire congress that sees no real need for additional tiers and it's like pulling teeth to get them to continue the current tiers. People on the ground know things are about to get a whole lot worse. Unfortunately getting that message to the elite in washington is a lost cause.

[NickB79]

15. If the U6 already includes those "too discouraged to look", then coming back in makes no difference

It sounds like, since the U6 already includes those who've given up and fallen off the employment radar AND those still on unemployment benefits, that the only way to make it go down would be to actually add jobs, not just get more job seekers into the mix.

[ipaint]

19. That's the number to watch. A graph of the last 10 years-

http://portalseven.com/employment/unemployment_rate_u6.jsp

[tritsofme]

21. You can fall off of U6

It includes discouraged workers, but not those workers that have left the labor force.

[DefenseLawyer]

12. "Census Bureau hiring accounted for 66,000 of the 59,000 government jobs created in April"

Nice math. Keith Hazelton is an adjunct professor of finance at Oklahoma City University and director of research for the Oklahoma Banker's Association. But hey, it is doomy and gloomy, so by all means let's take everything this guy says as gospel. Surely the Oklahoma Banker's Association wouldn't lead us astray.

[notadmblnd]

16. Thanks for posting this.

I took some grief here a couple of weeks ago for disagreeing with those that said everything's coming up roses. Then, I said that until I see it personally in my family and community, I was not buying it. This only confirms my statement at the time.

[tritsofme]

20. Dishonest math here by these guys. The net birth/death model is not a seasonally adjusted figure

The 188,000 added from that model should be seen in context of the 1.16 million non-seasonally adjusted payrolls that were added in April, not the seasonally adjusted net of 290,000.

[ipaint]

22. The BLS says they add the number to the establishment survey

in the monthly report.

Do you have a link to your info.

[tritsofme]

23. It does add to the establishment survey, but not to the seasonally adjusted topline number.

It needs to be viewed in the context that the establishment survey said that over 1 million non-seasonally adjusted jobs were created in April. It is not correct to say that the birth/death model accounted for 188k out of 290k jobs created.

You can read about the Net Birth/Death Model http://www.bls.gov/ces/cesbdqa.htm">here. The author of the piece quoted in the OP was either being deceptive, or does not know what he is talking about.

[ipaint]

27. Thank you very much for the link.

One more question when you have the time...

from the link-

"Are birth/death factors seasonally adjusted?

A: No, they are calculated using population data that is not seasonally adjusted and the factors are applied to the sample-based not seasonally adjusted estimates. Months with generally strong seasonal increases such as April, May and June generally have a relatively large positive factor. Conversely, months with overall strong seasonal decreases, such as January, generally have a relatively large negative factor."

Wouldn't that be a seasonal adjustment?


From BLS-

"What is a seasonally adjusted estimate?

Seasonal adjustment removes the change in employment that is due to normal seasonal hiring or layoffs, thus leaving an over-the-month change that reflects only employment changes due to trend and irregular movements."


It just seems odd to have a birth/death model adding or subtracting jobs to the non-seasonally adjusted #s that can't be looked at as having any effect on the seasonally adjusted job #s.

[berni_mccoy]

24. Krugman disagrees with these lies

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8290331

[Capn Sunshine]

25. yes he did, but lots of people seem to want things to stay fucked up

It's almost like they're rooting for the Obama administration to fail.

That can't be it though can it?

[Name removed]

26. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[Subdivisions]

31. How does observing truth and reality equate to wanting things to stay

fucked up or wanting the President to fail? That's just crazy talk.

[berni_mccoy]

32. The OP has little to do with The Truth.

[hfojvt]

28. what a relief

Democrats failed and we can all still vote Republican this fall in good conscience.

Just keep picking at that good news, spin it into bad news. You're picking and Michael Steele is a-grinnin'.

550,000 jobs in the last three months? So what? Obama and the Democrats still suck. The economy is ruined and we're all gonna die.

Apparently to some people, 550,000 new jobs is just as much cause to mourn and wallow in despair as 550,000 lost jobs would be. I guess being a progressive means always being able to find the cloud in every silver lining.

[Greyhound]

29. Pointing out reality doesn't sit well with the "reality based community".

:rofl:Dolts.:dunce:

[tritsofme]

30. Not to be a party pooper, but the OP is demonstrably incorrect.

The net birth/death model did not account from 188,000 of 290,000 seasonally adjusted jobs created in April.

[Greyhound]

33. I think the larger point of the OP is what this is really about.

We can argue over statistics, models, adjustments, accuracy, data sources and calculations for years, but what the bottom line is, is that the gathering and analysis of the data themselves are skewed by agendas and are therefore, meaningless except as PR fodder.

It is bad and getting worse, it has been bad for a very, very long time, and the results of the ongoing scheme have so heavily tipped the playing field that it is self-evident to most people that it has gone wrong and no one is fixing it.

[berni_mccoy]

34. Conspiracy Theory now? If that were true, Bush would have tweaked the numbers so far positive

that no one would have known there was even a hint of a problem.

That is the way Rove operated.

Sweep everything under the rug.

And Obama had abysmal job data for the first year. Thinking the data is made up is on the level of flat-earthers, faked moon landings and climate change deniers.

[Greyhound]

38. LOL!

I almost replied before I noticed who it was.
:rofl:
:kick:

[HughMoran]

36. What nitpicking minutae will be put forth when 1,000,000 jobs/month are created?

Oh, and the real chart, as shown on Rachel Maddow (who gets it):



Anybody who doesn't see this as an improvement coming out of the worst recession since the great depression is clearly delusional and looking for negativity under every rock.


To honor the frolicking pessimists in this thread:

[tonysam]

37. No improvement in the unemployment rate isn't nitpicking

Keep spinning like a top, though.