Archive for the ‘BLS’ Category

With dismal job growth, how did the unemployment rate drop to 8.1%?

September 10, 2012

The August employment report was expectedly dismal, but equivocal in that  it gave both parties data points to selectively highlight.

First, the BLS Establishment Survey reported that 96,000 jobs were added … that’s good since it’s a positive number.

But, there was a decline in “goods producing jobs” – i.e. manufacturing … and the 96,000 is below the the 125,000 level that is commonly held as the number required to keep pace with population growth and keep the unemployment rate constant.

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Nonetheless, the reported unemployment rate went down to 8.1%.

How can that be?

Good question since the Employment reported from the Household Survey – the basis of the 8.1% calculation – declined by 119,000.

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Now, stop and think about that for a second.

The Establishment Survey said 96,000 jobs were added.

The Household Survey said employment dropped by 119,000.

Yet the unemployment rate went down – from 8.3% to 8.1%.

Hmmm. How can that be?

Well, 368,000 people dropped out of the labor force – stopped looking for work – either retired, became disabled, or simply kicked back on unemployment benefits.

If they hadn’t quit looking for work, they would have been counted as unemployed … and the reported unemployment rate would have been 8.33% – up more than .1% from 8.25% last month

The puts a whole new paint job on things, right?

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The number of folks dropping out of the labor market is a big deal … since the magnitude is big and the trend is bad – especially this year.

 

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The KEY METRIC

To consolidate all of the above “stuff” into a single metric, I like to look at the employment-to-population ratio … what % of adults who are employed.

The employment-to-population ratio is now at 58.3% … meaning that 41.7% of adults AREN’T employed … that’s a big number !

Note that the employment-to-population ratio hovered around 63% during most of the Bush years … then collapsed during the financial crisis … dropping a 5 points … and then hovering around the lower level.

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While the employment-to-population ratio looks like it’s “hovering”, look at the past couple of months … it has dropped by .5%.

That may sound like rounding error, but multiply it times the working age population … and you get over 1.2 million fewer people employed.

Ouch.  That’s not rounding error!

 

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Bottom line: we’re stalled !

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Key data source

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The key number in BLS report …

September 7, 2012

According to the BLS

The number of employed people dropped by 119,000

… from 142,220,000 to 142,101,000

So, how did the unemployment rate go down?

Simple.

The BLS estimated that 368,00 stopped looking for work

In other words, the denominator changed more than the numerator.

I guess if Team Obama can get more people to stop looking for work, we’ll have unemployment problem licked.

Hmmm.

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Sorry to harp … but, the streak continues

September 7, 2012

Some loyal readers have suggested that I get off this case … That I’ve made my point.

I promise that I’ll stop writing about BLS reporting bias when the streak ends.

Now we’re up to 77 out of 78 weeks — and, at least 18 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on yesterday’s BLS report, the number for the week ending August 25 was revised upward from 374,000 to 377,000.

In itself, the 3,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or 3k …  or .8% to your prelim forecast !

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Unbelievably, the streak rolls on: BLS under-reports initial unemployment claims … again!

August 31, 2012

Am I the only person in the world to to think this is nuts?

Media sure isn’t reporting it …

Now we’re up to 76 out of 77 weeks — and, at least 17 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on yesterday’s BLS report, the number for the week ending August 17 was revised upward from 372,000 to 374,000.

In itself, the 2,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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Almost forgot … the preliminary unemployment claims for the week of Aug. 25 are reported even vs. the Aug. 11 preliminary number and up 2K vs the revised Aug. 18 number.

In other words, no indication that a corner has been turned.

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The streak rolls on: BLS under-reports initial unemployment claims … again!

August 27, 2012

Still again …

Now we’re up to 75 out of 76 weeks — and, at least 16 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on last Thursday’s BLS report, the number for the week ending August 17 was revised upward from 366,000 to 368,000.

In itself, the 2,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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Almost forgot … the preliminary unemployment claims for the week of Aug. 18 are up 6K vs. the Aug. 11 preliminary number and up 4K vs the revised Aug. 11 number.

In other words, no indication that a corner has been turned.

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The streak rolls on: BLS under-reports initial unemployment claims … again!

August 17, 2012

One more time …

Now we’re up to 74 out of 75 weeks — and, at least 15 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending August 3 was revised upward from 361,000 to 364,000.

In itself, the 3,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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Almost forgot … the preliminary unemployment claims for the week of Aug. 11 are up 5K vs. the Aug. 3 preliminary number and up 2K vs the revised Aug.3 number.

In other words, no indication that a corner has been turned.

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The streak rolls on: BLS under-reports initial unemployment claims … again!

August 10, 2012

I can post this post on auto-generate, I guess …

Now we’re up to 73 out of 74 weeks — and, at least 14 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 28 was revised upward from 365,000 to 367,000.

In itself, the 2,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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Almost forgot …

The 4-week moving average of initial unemployment claims bumped up 2,250 to 368,250 … suggesting that the corner hasn’t been turned yet.

“Our plan worked” … say, what?

August 7, 2012

A picture is worth a thousand words.

So, here’s a picture.

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Source: AEI

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Were jobs added or lost in July?

August 6, 2012

Basic answer: it depends.

It depends on which BLS survey you look at.

The BLS’ “Establishment Survey” polls businesses and collects data on hiring and firing.

It says that 163,000 jobs were added in July … reversing a recent slide.

The BLS’ “Population Survey” polls people instead of businesses and collects data on whether they’re employed, unemployed, looking for work.

The Population Survey says that 195.000 jobs were lost in July … which is why the unemployment rate increased to 8.3%

Note:

  1. Both surveys are conducted by the BLS
  2. The Establishment Survey – which heavily guesstimates small biz hiring & firing —  is the headline jobs number.
  3. The Population Survey is the basis for the headline unemployment rate
  4. From the lips of the BLS: “Both the payroll and household surveys are needed for a complete picture of the labor market. The payroll survey provides a highly reliable gauge of monthly change in nonfarm payroll employment. The household survey provides a broader picture of employment including agriculture and the self-employed.

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The streak rolls on: BLS under-reports initial unemployment claims … again!

August 3, 2012

Now we’re up to 72 out of 73 weeks — and, at least 13 weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 21 was revised upward from 353,000 to 357,000.

In itself, the 4,000 isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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Almost forgot …

Ahead of this morning’s BLS unemployment report, Gallup’s unemployment rate bumped up .2% during July and first time unemployment claims increased last week.

My bet BLS will claim we’re steady at 8.2% … and, further nick their credibility.

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Errata: last line of chart should be dated 7/28/12 … sorry.

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Re: Unemployment … this chart says it all

August 2, 2012

There are a lot of of confusing – and sometimes misleading – numbers thrown around to characterize the state of the employment market.

As we’ve been harping the past several weeks, the BLS has been consistently underreporting the weekly unemployment claims numbers that get headlined on the news – only to revise them up quietly the following week.

Similarly, there are lots of questions about the BLS’ seasonal adjustment factors … which sometimes cause more variance than they explain.

Finally, there’s understandable confusion about the reported unemployment rate and the labor force participation rate.  Since the latter has been going down, the former benefits – i.e. there are fewer unemployed people because some (or many) have left the work force.

The St. Louis Fed published a chart that puts the factors into perspective.

The chart is brilliant in its simplicity.

It simply plots the percentage of the able-bodied population who are employed.  The difference to 100% is the percentage of able bodies that either choose not to work or can’t find jobs.

What it shows: prior to the financial crisis, about 63% of able bodies had jobs.

The rate fell quickly to about 58.5% and has – save for some statistical noise – hasn’t budged despite the trillions of  fiscal and monetary action.

In other words, about 1 in 20 (the difference between 63% and 58.5%) able bodied folks who used to work, aren’t employed now … and the trend isn’t good.

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Gallup reports unemployment rate increasing … what’ll the BLS say on Friday?

August 1, 2012

Fully expecting that the BLS will manage this week’s jobs and unemployment rate reports, I thought I’d peek at what Gallup is saying.

Well, the Gallup trend is up sharply since mid-July … up to 8.3%

My bet: BLS will find a way to report that the unemployment rate stayed constant at 8.2% in July.

We’ll see …

 

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Amazing: BLS under-reporting streak continues …

July 27, 2012

Now we’re up to 71 out of 72 weeks — and, at least 12 weeks in a row —  that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 14 was revised upward from 386,000 to 388,000.

In itself, the 2k isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or .8% to your prelim forecast !

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BLS streak shamelessly continues …

July 20, 2012

BLS bias continues

Now we’re up to 70 out of 71 weeks that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending July 7 was revised upward from 350,000 to 352,000.

In itself, the 2k isn’t a big deal.

But, in context it is

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS.

Hint to BLS: just add 2k or  .8% to your prelim forecast !

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Increase in Unemployment Claims

And, don’t miss the big point: initial unemployment claims increased by about 10% to 386,000

I expect Team Obama to whine:

“Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”

Safe bet since, as we reported before, that’s exactly what they’ve said each month for over 2 years.

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The BLS streak continues …

July 16, 2012

No, we didn’t forget … just got busy yesterday.

Now we’re up to 69 out of 70 weeks that the BLS’s  “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on Thursday’s BLS report, the number for the week ending June 30 was revised upward from 374,000 to 376,000.

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS !

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The BLS streak continues …

July 6, 2012

We’re up to 68 out of 69 weeks that the BLS has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.

Based on yesterday’s BLS report, the number for the week ending June 23 was revised upward from 386,000 to 388,000.

Again, I ask: statistical bias or political bias?

If the former: fix it already, BLS !

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Cookin’ the books update: 67 of the last 68 weeks.

June 29, 2012

I know it’s getting a bit tedious … but, , here’s this week’s unemployment claims headline:

“Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 386,000.

The prior week’s figure was revised up to 392,000 from the previously reported 387,000.”

Said differentlt: Unemployment claims (386,000) decreased by 1,000 from last week’s reported number (387,000) … but last week’s reported number (387,000) was revised up by 5,000 to 392,000 … so, this week’s number is not a decrease of 1,000, it’s a decrease of 6,000.

C’mon man.

My bet: this week’s number 386,000 will be revised upward next week.

That’s a safe bet, since the BLS has under-reported initial unemployment claims for 67 out of the last 68 weeks.

Here’s the recap for the past 7 weeks:

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Bottom line: a consistent bias – maybe statistical, maybe political – that provides Obama with jobs’ headlines more favorable than reality

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Either the BLS has the worst statisticians on the face of the earth, or they’ve become political hacks.

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Cookin’ the books update: They (shamelessly) did it again …

June 22, 2012

OK, here’s this week’s unemployment claims headline:

“Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 387,000.

The prior week’s figure was revised up to 389,000 from the previously reported 386,000.”

Said differentlt: Unemployment claims (387,000) increased by 1,000 over last week’s reported number (386,000) … but last week’s reported number (386,000) was revised up by 3,000  to 389,000 … so, this week’s number is not an increase of 1,000, it’s a decrease of 2,000.

C’mon man.

My bet: this week’s number 387,000 will be revised upward next week.

That’s a safe bet, since the BLS has under-reported initial unemployment claims for 66 out of the last 67 weeks.

Here’s the recap for the past 7 weeks:

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Bottom line: a consistent bias – maybe statistical, maybe political – that provides Obama with jobs’ headlines more favorable than reality

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Either the BLS has the worst statisticians on the face of the earth, or they’ve become political hacks.

You decide …

Obama DECIDES to up the unemployment rate … really!

June 20, 2012

I’m ambivalent about Obama’s decision to, in effect, implement the Dream Act despite it’s rejection by Congress.

I’m ok with parts of it — like legalizing those who serve in the military —  but I’m not that keen on presidents completely ignoring the Constitution.

Immigration politics aside, I’m interested in the statistics … specifically, the impact of Obama’s move on the BLS’ reported unemployment rates.

Most sources are estimating that just short of 1 million illegals fall into Obama’s stick-around policy — over 16 years old, younger than 30.

Those people now — by the stroke of Obama’s pen — qualify as “in the American labor force” … the denominator of the unemployment rate calculation.

Let’s do some simple math …

The BLS says that there are currently 155 million people in the labor force … according to the last BLS report, 142.3 million were employed … 12.7 million unemployed … for an 8.2% unemployment rate.

What happens when the 1 million newly minted legals get thrown into the statistical mix?

Worst case: if all are currently unemployed … then the unemployment rate jumps to 8.8% … 13.7 unemployed divided by 156 million in the labor force.

Best case: if only 11% are unemployed — the current UE rate for Hispanics … then the unemployment rate increases slightly to about 8.25% … 12.81 unemployed divided by 156 million in the labor force.

Most like (statistically): somewhere between the best and worst cases … probably a 25% unemployment rate for the new legals … bumping the UE rate by about .1/10th of a percentage point.

Most likely (politically): the BLS will “forget” to add the new legals to the labor force until, say, January 2013.

That’s the case that I’m betting on … watch the labor force numbers to see if I’m right … they should bump up a million when June numbers get reported … but they won’t!

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Here’s a shocker for you ….

June 15, 2012

Yesterday, the BLS reported that it’s revising last week’s estimate of new  unemployment claims up by 3,000 … or about 1%

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We’ve been pointing out this glaring statistical bias for weeks.

Finally, some other media sources have finally jumped on the bandwagon and researched the issue historically.

Turns out that  the weekly jobless claims number has now been revised up 20 weeks in a row and 65 out of the last 66 weeks.

Hmmm.

Why is it important?

Because it means the Feds are consistently under-reporting weekly unemployment claims’ changes … making things look rosier than they really are.

 

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May be an innocent error but, geez, wouldn’t you think the statisticians would have caught on to the bias by now?

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Update: Cookin’ the books …

June 11, 2012

Yeah, I’ve been harping on this but it has my attention and I’m dismayed that the mass media hasn’t picked up on it …

Last Thursday’s BLS release on Unemployment Claims did it again … revised upward the prior week’s estimate.

Let’s look at the numbers for the past couple of weeks:

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In each of the past 5 weeks — maybe longer, I just started tracking then — the so-called “Advance” estimate of weekly unemployment claims eventually got revised upward … by a fairly consistent 1%.

There’s a name for a consistent unidirectional error in forecasts.

It’s called SYSTEMATIC STATISTICAL BIAS.

So, you gotta wonder: why haven’t the crack statisticians at the BLS noticed the bias and started correcting for it?

Either they’re incompetent, or they’re as biased as they’re data.

Why does it matter?

Because the “headline numbers” each week are calculated by subtracting the advance number — which is consistently understated — from the prior week’s final number — which is consistently raised up.

In other words, there is a consistent bias to report bigger drops in unemployment claims than are real … and in 2 of the past 4 weeks, to report drops in weekly unemployment gains when there were actually increases.

Hmmm.

No wonder the President thinks the private economy is doing fine.

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Book cookin’ alert …

June 1, 2012

The BLS reports May’s unemployment number at 8:30 this morning.

If the headline is “Unemployment rate clicks down to 8%” … I’ll scream.

You may remember that job growth was anemic last month (under 125,000), but the unemployment rate dipped to 8.1% as more than 350,000 quit looking for jobs.

In advance of today’s BLS report …

The Commerce Dept revised down its Q1 GDP estimate to 1.9% … … its original report a month ago was an increase of 2.2%.

ADP reported 133,000 new jobs … after revising its prior month estimate down by 6,000.

Gallup’s mid-May unemployment rate rate hovered around 8.2%.

And, unemployment claims for last week increased by 10,000 … after revising the prior week’s claims up (of course).

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My bet: miraculously, the unemployment rate will stay constant at 8.1% … though every other piece of data says it it should bump up.

We’ll see.

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