Archive for the ‘Employment – Jobs’ Category

Why the Fed’s QE isn’t booming the economy …

July 24, 2013

Two related articles caught my eye …

First, the Washington Post editorialized that:

The only part of the Obama economy that has flourished  is Wall Street.

Only the trickle-down from the wealthy financial players, who have thrived off the conveyor belt of money as it travels from Washington to Wall Street, has had much of a positive effect on the economy as a whole.

Let’s break down the economic fundamentals.

First, a chart showing the “conveyor belt of money” …

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Note that the M1 money supply increased from about $1..4 trillion in 2009 to today’s $2.6 trillion.

Shouldn’t a cool $1.2 trillion more in supply of money get the economy cranking into overdrive?

Here’s the rest of the story …

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Why are 74% of small businesses planning to cut hours and fire workers?

July 19, 2013

According to a survey by the U.S. Chamber of Commerce ,,,

The answer has little to do with the Fed’s threat to tighten monetary policy.

Though 77% continue to think the U.S. economy is on the wrong track, most small businesses are optimistic about their local economy and individual business.

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So, what’s up?

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Work: “And, give me some fries on the side …”

July 17, 2013

The Feds keep reporting steady job growth.

What gets obscured by the headline is that t there’s a fundamental shift happening in the workforce.

 

Source: ZeroHedge

Here’s what’s going on …

(more…)

Nums: The labor market in 3 charts …

July 8, 2013

There were high fives last Friday when the BLS reported a level unemployment rate and – based on the employer survey– 195,000 new jobs.

The numbers from the household survey were less rosy … a gain of 120k jobs.

Still, positive job growth.

Here’s the rub …

The new jobs (and more) were part-time jobs … up 360k on the population survey.

In fact, full-time jobs declined in June by 240k jobs.

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Let’s put those numbers in a historical context …

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Nums: How high is your state’s unemployment rate …

June 24, 2013

Interesting chart from Calculated Risk … plotting the unemployment rat – by state – from high to low.

Here’s the chart … below are some highlights.

 

 

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Highlights:

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Feds: “Hire ex-cons … we do” … say, what?

June 17, 2013

Let’s connect a couple of dots from recent articles that caught my eye…

The first is a NY Post exclusive that the “State Department has hired agents with criminal records”.

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Here are the details … and a couple of odd twists.

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Nums: Gallup says unemployment rate to go up …

June 7, 2013

The BLS numbers get reported at 8:30 this morning.

I always reference Gallup as an indicator.

For May, Gallup’s seasonally adjusted U.S. unemployment rate was 8.2%up .4% from 7.8% in April.

 

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My bet: weak jobs growth ( probably 125,000) … but BLS will find a way to keep the official unemployment rate constant at 7.5%

 

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Nums: The most worrisome employment number …

June 6, 2013

Interesting chart in today’s WSJ … I’ve added a few highlights.

Basic point raised in the article: The reported drop in the unemployment rate is masking a more fundamental weakness in the job market.

As we’ve harped before, the employment to population ratio is down about 5 pp from the pre-crisis long-term average … and despite a decline in the unemployment rate, the employment to population ratio has stayed flat over the past couple of years.

The culprits keeping the employment to population ratio low:

  • bona fide unemployment – too few jobs
  • demographics -old folks retiring
  • social programs – extended unemployment
  • faux disability enrollments

Our prior analyses allocate about 1/3 of the drop to demographics, about 1/2 to lack of jobs and the rest to social programs and disability bumps.

 

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Note from the employment to population chart …

1) The 20 year pre-crisis trend …. hovered around 63%.

2) The steady increase during the 1980’s … you know, the Reagan years … more growth, fewer handouts.

3) The similarity in the levels during the Carter and Obama years … coincidence?

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Nums: The impact of demographics on the LFPR …

June 6, 2013

Business Insider reports that …

Bank of America economist Michelle Mayer has put out a note on one of the more controversial subjects in economics these days: the Labor Force Participation Rate.

The Unemployment Rate has been grinding down, but everyone has noticed that Labor Force Participation has dropped as well, and it’s been argued that the exodus of people from the workforce (who no longer count as unemployed when they’re not working) undermine the idea of workforce improvement.

BI – repping for Team O — takes delight observing that: “Mayer’s note comes down firmly on the side of saying that the decline in Labor Force Participation is largely secular, and not primarily about the economic malaise.

 

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Hold your pants on, BI.

Here’s how & why Mayer’s analysis overstates the secular impact and understates the economic impact.

(more…)

Nums: More on the rise of part-time work …

May 10, 2013

Yesterday we posted “Connecting the dots: ObamaCare may be creating jobs!”

The punch line: many companies are reported to be down mixing their work forces by reducing full-timers to part-time status … and hiring additional part-timers to fill their needs.

Today, let’s look at some macro numbers.

Total employment dropped 8.2 million during the recession.

5.3 million of those 8.2 million jobs have been recovered … but total employment is still down 2.9 million from its pre-recession peak.

Note that total employment is up 1.4 million since President Obama’s Inauguration in January 2009.

Keep that number in mind … 1.4 million.

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Things get more interesting with a little drilling down …

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Nums: THE way to look at the employment numbers …

May 10, 2013

In a  couple of the past week’s posts we’ve been exploring the employment down mixing from full-time to part-time jobs.

I personally think that it is one of the most important – and least reported trends in the economy.

Flashback to last Friday … the BLS headline was that 165,000 jobs were added in April and the unemployment rate dropped to 7.5%

That news flash elicited giddy re-reporting … e.g. Business Insider’s “STOCKS GO WILD AFTER AWESOME JOBS REPORT” … “awesome” and all caps,

Yep, total employment went up 165,000 jobs … that’s true

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But, here’s the rest of the story …

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Jobs: A generation lost ?

May 9, 2013

Editorial in the WSJ today titled Meet Generation Jobbed

Punch line: With youth unemployment and underemployment at persistently high levels, “our kids are starting to look and sound like Europe’s smart kids—despondent and resigned.”

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Here are the facts underlying the conclusion …

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Part-timing it: Retailers adding employees … and cutting hours.

May 8, 2013

According to IBD

Retailers – prepping for the ObamaCare mandates — are cutting workers’ hours and reclassifying them as part-timers.

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Here’s the data

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Connecting the dots: ObamaCare may be creating jobs!

May 6, 2013

You read that right.

The obvious has become evident to me …

The BLS reported that employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent,

Hmmm.

Memory jogged back to last week’s post re: the increasing number of part-timers:

Obvious question: how many of the 165,000 were part-timers?

According to the Fed’s data base, part-time employment increased by 229,000.

If true, that means that full-time employment dropped.

Hmmm again.

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What’s going on?

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Nums: The April jobs report … Sequester creates jobs?

May 3, 2013

Here’s the headline: “Non-Farm Payrolls Rise More Than Expected, Up by 165,000 in April; Unemployment Rate Drops to 7.5%”.

I guess that the Sequester – rather than inhibiting job growth – actually spurred job growth.

Not really.

But, it means team Obama will have to re-write its press release for today.

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Reminder: April ADP’s number was  159k … 30k below the consensus forecast … and, ADP revised March down by about 20k jobs..

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Nums: The shift to part-timers …

May 2, 2013

In a prior post, we reported that middle income jobs were disappearing … apparently down mixing to lower income jobs.

Here’s more …

The NY Times reports that about 7.6 million Americans working part-time jobs are doing so reluctantly, and would rather have a full-time job … that’s about 3 million more than there were when the recession began at the end of 2007.

Most of the part-time jobs are in retail and food service … where companies are throttling full-time employment in advance of ObamaCare penalties.

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Bummer: The middle class plight … in 2 charts.

May 1, 2013

Pew released a sobering report last week: An Uneven Recovery, 2009-2011

The central conclusion: the rich have gotten richer and the middle class has gotten crushed.

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Upper and lower income groups have both increased by about 5 percentage points of the population mix.

In other words, the percentage of middle class folks – earning from 2/3s to twice the median income – has dropped by 10 percentage points.

What’s going on?

(more…)

Nums: More about the declining LFPR … blame teens, not old folks.

April 30, 2013

Remember March’s employment numbers?

Despite paltry job growth – less than population growth — the unemployment rate went down – because about 500,000 folks dropped out of the labor force.

The LFPR (labor force participation rate) dropped to 63.2%.

The Atlantic published an interesting recap of LFPRs by age group over time.

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Note that the LFPR has been   …

  • Increasing for all age groups over 35
  • Holding steady at about 80% for folks 35 to 34
  • Dropping for folks 20 to 24.
  • Dropping big-time for teenagers

While older folks are participating more in the labor force, their LFPR is substantially less than other age groups (except teens) … so the aging population is “mixing down the overall LFPR.

What’s up with teens?

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Nums: Do big companies or small companies create more jobs?”

April 18, 2013

Bit of a trick question since the constant refrain is that small companies are the ones that generate job growth.

According to a Business Week analysis of ADP National Employment data …

Since the U.S. economic recovery began in june 2009, big employers have increased employment 7.5%, while small employers have boosted payrolls only 4.9%.

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Mark Zandi, chief economist of Moody’s Analytics, was on the McCain team in 2008 but has changed sides and now regularly advocates for the Administration of TV.

He says: that there are three explanations for why large employers (1,000 employees and up) grew faster than small ones (fewer than 50 workers).

(more…)

Nums: Still, blaming the declining LFPR on seniors retiring …

April 17, 2013

Former Obama economic adviser Austan Goolsbee was back on TV saying that more than 60% of the decline in the labor force participation rate (LFPR)  is simple demographics … old people retiring.

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Last week, I posted a back of the envelop analysis that said  seniors retiring is less than 1/3 of the blame.

Today, let’s do the analysis more rigorously, using a technique that I teach called PVA – Profit Variance Analysis ….

(more…)

Nums: Are women still at a disadvantage in the workplace?

April 12, 2013

According to a recently released WSJ poll

“Women in large numbers believe they face more discrimination in the workplace than in other situations.”

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The “disadvantages” include lower pay than men …

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Nums: More re: labor force participation rates …

April 9, 2013

Since las t Friday’s jobs report and the flood of misdirection coming out of Washington, I’ve been trolling the BLS numbers.

Here are a couple that caught my eye …

Since 1950, the labor force participation rate (LFPR) among adult males has fallen from almost 90% to below 70% today.

Wow.  Almost 1 of 5 men have opted out.

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During the same period – 1950 to today – adult women’s LFPR has increased from about 33% to about 60%.

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Best hypotheses I can conjure are that

(1) working women  has freed some men to stay-at-me to either be Mr. Mom ,,, or just slack off

(2) more capable women have squeezed men out of jobs?

Any alternative explanations out there?

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Nums: Labor Force Participation Rate is down b/c old folks are retiring … well, not exactly!

April 8, 2013

Here’s some stuff that you won’t see other places …

OK, everybody knows that – despite paltry job growth — the unemployment rate dropped from 7.7% to 7.6%.

Why?

Because about 500,000 people dropped out of the labor force.

The “Labor Force Participation Rate” dropped to 63.2%

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Note that in the past couple of years the labor force participation rate has dropped about 3 percentage points … from over 66% to 63.2%

So, why is the Labor Force Participation Rate dropping?

Dr. Alan Krueger — Chairman of President Barack Obama’s Council of Economic Advisers – asserted on CNBC that the decline in the labor force participation rate is simply demographics.

Old people are an increasing part of the population and they are retiring.

Hmmm.

Nobody challenged him because it’s obviously true, right?

Not so fast.

Now, here are the nums that you probably won’t see any place else ….

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Nums: UE rate down to 7.6% … thanks to quitters.

April 5, 2013

The reported unemployment rate dropped to 7.6% despite a meager 88,000 jobs being added in March.

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It’s conventional wisdom that you need more than 200,000 jobs added to move the needle.

So, why did the UE rate go down.

You guessed it: the Labor Force Participation Rate dipped again … more people (about 500,000) stopped looking for jobs … and weren’t counted in the unemployment numbers.

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The administration shills have been harping on the Sequester to explain the numbers (even though it didn’t really kick in during March).

They dismiss the idea that the slowdown could be due to:

  1. Increased taxes … especially the payroll tax
  2. ObamaCare
  3. An anti-biz administration

Nope, just not enough government spending.

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Nums: Unemployment rate on the rise again?

April 4, 2013

Last month, the BLS reported a decline in the unemployment rate to 7.7%.

Most economists and other pundits are predicting that the March  UE rate – which will be reported tomorrow – will remain at that level.

But, yesterday’s ADP employment numbers were almost 20% below the consensus estimates … 185k vs. 225k.

Today, the BLS reported: “In the week ending March 30, the advance figure for seasonally adjusted initial claims was 385,000, an increase of 28,000 from the previous week’s unrevised figure of 357,000. The 4-week moving average was 354,250, an increase of 11,250 from the previous week’s unrevised average of 343,000.”

Here’s another contra indicator … the Gallup Daily Tracking of Employment.

When the daily numbers for the past 3 months are averaged, there’s a big spike upward from February to March.

Gallup is again pegging the unemployment rate over 8%.

Bottom line: If the consensus 7.7% is the over-under …. I’m betting the over, for sure.

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Charts: The employment picture ….

March 15, 2013

There was Administrative euphoria last week when the employment numbers were released … almost 200,000 jobs added.

In the words of former Obama economic guru Austan Goolsbee: “Whoo-hoo”

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Yep. positive sign.

But, let’s look a little deeper … a couple of charts I haven’t seen other places.

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More “temps” is the workforce … is that good or bad?

March 15, 2013

Prof. Mark Perry of AEI crafted the below chart and observes …

Employment in temporary help services grew by 16,100 jobs in February, bringing the total number of temporary and contract workers to 2.58 million last month, the highest level since August 2007.

As a leading indicator of overall US labor market demand, the ongoing positive trend in temporary hiring is a sign that the labor market is gradually improving and suggests an increased pace of broader-based hiring for workers going forward in 2013.

It’s also likely that many employees who initially get hired on a temporary basis will be offered employment on a full-time permanent basis as the economy improves.

Prof Perry sees the glass as half full

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Predictably, I see the glass as half-empty …

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Nums: The employment situation reduced to 2 charts …

March 12, 2013

This chart can not be shown too often.

It shows the commitment the Obama Administration  made to secure the trillion dollar faux-stimulus funding.

We were supposed to be around 5% unemployment now.

Oops

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Source

Here’s the second chart …

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Gallup: Unemployment rate trending up, over 8%.

March 7, 2013

Seems like many folks have lost interest, but tomorrow, the official BLS employment numbers come out.

Initial unemployment claims are still hovering around 350,000 per week … suggesting that the employment picture is staying pretty stable.

As a cross-check to the government numbers, I like to compare them with Gallup’s daily tracking poll.

Hmmm.

Since mid-February , Gallup’s measured unemployment rate has been rising and, in the past week or so, has broken back up above 8%

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Wonder what the BLS will report tomorrow.

I’m betting the under …

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Chart: What happens when the minimum wage is raised?

February 20, 2013

President Obama is pushing to raise the minimum wage to $9 per hour.

The rationale is well-intended: get low-earners closer to a “living wage”

The major argument against the move is econ 101 … and empirical evidence.

The below chart – from AEI’s Mark Perry —  cuts to the chase.

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The chart plots the level of the Federal minimum wage against the number of percentage points that the teenage unemployment rate is over the all-inclusive unemployment rate.

Implicitly, the analysis assumes that the bulk of minimum wage jobs go to teens … and, measuring the differential (instead of the gross rate) normalizes to the overall state of the economy.

The conclusion is stark: when you raise the minimum wage you lose jobs.

Period.

But, some folks argue that economic life is better for the minimum wagers who retain their jobs.

Not so fast …

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GDP down, unemployment claims up, unemployment rate up, Dow heads for record high … say, what?

February 2, 2013

Many folks are wondering: Why has the stock market continued to steam ahead despite a ho-hum (or humbug) economy?

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Source: Council of Economic Advisers

Answer: It’s less a matter of optimism re: a recovery, and more a function of the Fed pouring money into the economy.  You know, quantitative easing — QE-infinity.

Here’s why …

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GDP down, unemployment claims up, Jobs Council fired … say, what?

February 1, 2013

Let me be sure that I have this right.

According to the WSJ …

The government reported that the U.S. economy shrank for the first time in more than three years in the fourth quarter of 2012.

Gross domestic product — the broadest measure of goods and services churned out by the economy — fell at a 0.1% annual rate in the fourth quarter of 2012.

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The drop, a surprise, was driven by a sharp fall in government spending and by businesses putting fewer goods on warehouse shelves, as well as by a decline in exports.

A one quarter contraction of economic output doesn’t mean the economy is formally in recession, but it is unusual for such contractions to happen in the middle of economic expansions.

In fact,  a similar drop has only happened one time in the past fifty years.

Of course, the media bellowed that the number wasn’t as bad as it looked since much of the hit came from a drop in government spending which, incidentally, had surged in the pre-election 3rd quarter.

Hmmm.

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The story gets better …

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The MoTown microcosm …

December 13, 2012

In prior posts this week, we noted that – on a macro  basis — there are 122 million adults in the US who are dependent on 121 million tax payers who work in private sector.

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A microcosm of the US picture is the city of Detroit

You know, Detroit as in ”about to file for bankruptcy”

Detroit as in “we voted you in, now bail us out”.

Detroit as in “unions are the way to middle class success”.

Consistent with the emerging national picture, it turns out that the  257,576 people in Detroit who do not have a job and are not looking for one outnumber the 224,846 residents who do have jobs.

Here are some other factoids courtesy of CNS

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Work harder: An increasing number of folks are depending on you.

December 12, 2012

In a prior post — Work harder: “Tax payer dependents” are counting on you. — we worked the nums to show that there are more tax payer dependent adults than there are private sector workers.

Specifically, there are about 121 million private sector works and about 122 million tax payer dependent adults — 89 million working age adults who aren’t looking for work, the 12 million unemployeds, and the 22 million government employees (yes, our tax dollars pay their wages, benefits, and over-stuffed pensions)

That’s a total of 122 million adults who are dependent on 121 million private sector workers.

Below are the totals over time.

Back in 2000, there were about 11% more private sector workers than tax payer dependent adults.

The lines crossed in mid-2009 … and now, there are about 1% more tax payer dependent adults than there are private sector workers.

So, we’ve got to raise taxes on the workers to support those who are dependent on them.

Ponder that when your alarm goes off tomorrow.

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Work harder: “Tax payer dependents” are counting on you.

December 11, 2012

Here are some nums that should give you pause.

There are about 315 million people living legally in the US.

244 million — 77.5% of the 315 million – are working age … the rest are kids

155 million of the 244 million are officially counted “in the labor force” … that’s 63.8% – the labor force participation rate.

Of the 155 million, 143 million are employed; 12 million are unemployed … that’s 7.7% of the 155 million in the labor force

Of the 143 million who are employed, 22 million (15%) work for Fed, state and local government121 million work in the private sector

The 121 million private sector employees pay the taxes that support

  • 89 million working age adults who aren’t looking for work
  • 12 million unemployeds
  • 22 million government employees (remember, our tax dollars pay their wages, benefits, and over-stuffed pensions)

That’s a total of 122 million adults who are dependent on the taxes paid by 121 million private sector workers.

Got that?

There are more tax payer dependent adults than there are private sector workers.

Think about it …

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Coming: How the ratio of tax payer dependent adults to private sector workers has changed over time.

Stay tuned ….

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Nums: Stay in school !

December 11, 2012

It isn’t exactly new news that more education makes you more employable.

For folks without a HS diploma:

  • The current unemployment rate is 12%
  • That’s down 4 percentage points from the 16% recession peak.
  • But, it’s still 6 percentage points higher than the 6% low point back to 2000.
  • And, 6% isn’t very low.

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For folks with a college degree  or higher:

  • The current unemployment rate is 4%
  • That’s down 1 percentage points from the 5% recession peak.
  • But, it’s still 2 percentage points higher than the 2% low point back to 2000.

Hard to argue against the importance of education.

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Nums: All you need to know about the Nov. unemployment report.

December 7, 2012

The “Establishment Survey” provided the “headline number” that 146,000 jobs were added … from 133,706,000 employed in Oct. to 133,852,000 Nov.

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And, the  unemployment rate dropped from 7.9% to 7.7%.

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But, the population of working age adults increased by 191,000 – more than the number of added jobs … from 243,983,000 in Oct. to 244,174,000 in Nov.

That should increase the unemployment rate, right?

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More important, the “Household Survey” – the basis of the unemployment rate calculation — reported that 122,000 jobs were LOST… from 143,384,000 employed in Oct. to 143,262,000 Nov.

For sure, that should increase the unemployment rate, right?

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But the unemployment rate didn’t go up, it went down …  because the civilian labor force CONTRACTED by 350,000 … from 155,641,000 in Oct. to 155,291,000 Nov.

That is, 350,000 people stopped looking for work and were no longer counted as unemployed..

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Said differently, the labor force participation rate dropped … and is now about 2.2 percentage points lower than it was when Obama took office

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And, consumer confidence dipped, so don’t be surprised if even more people stop looking for jobs.

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Bottom line: Not your classic turnaround … but if enough people stop looking for jobs, we’ll have this unemployment mess fixed in no time.

Ouch !

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Tepid job growth … unemployment down … say, what?

December 7, 2012

Hot off the presses …

The BLS reported that 146,000 jobs were added in November … below October … below the 12 month rolling average … and below the 200k that most economists say is what’s required to dent the unemployment rate …

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… But, magically, the unemployment rate dropped by 2-tenths of a percent to 7.7% … hmmm.

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Most interesting number: October’s government employment number was revised down by about 50,000

Hmmm.

Yesterday in our post Gotcha: About those rosy unemployment stats …  we showed how the bump in government employment accounted for most of the decline in the unemployment rate running up to the election.

Seems that that number was a tad inflated.

Surprise, surprise, surprise.

Wouldn’t you think the government would know how many employees are on the payroll?

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Gotcha: About those rosy unemployment stats …

December 6, 2012

First, glance at what’s been going on with government employment the past couple of months

about 1 million employees were added to government payrolls from June 2012 until election day.

Hmmm.

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Now, take a gander at Gallup’s  daily tracking of unemployment.

Note that Gallup’s unemployment rate dropped by about a point in the run-up to the election.

Virtually all of that drop is attributable to the bump in government employees.

Double hmmm.

And, Gallup’s unemployment rate is up about 3/4’s of a percentage point since the election.

Triple hmmm.

I thought that Team Obama had this economy turned around …

Oops.

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Question: Tell me again how higher tax rates will help a faltering economy?

Unless the BLS fudges the number tomorrow, the GOP may finally have an arrow in their fiscal cliff quiver.

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Demand for full-time employees is dwindling … so is the supply.

November 20, 2012

Punch line: The employment market is likely to stay in the doldrums … employers – still operating below effective full capacity – are leveraging the productive full-time employees they retained during the recession, shifting some of them to part-time status … and supplementing them with temporary workers and new part-timers.  And, the labor force participation rate is dropping as workers become demotivated and disincentivized.

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The Demand Side

Full time work is about to get scarcer.

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By hiring part-time workers who put in less than 30 hours per week, employers can avoid a mandate dictated by the new health reform law: either provide expensive health insurance or pay a fine equal to $2,000 per worker.

In a July survey, 32% of retail and hospitality company respondents told [Mercer] that they were likely to reduce the number of employees working 30 hours a week or more.

Already, some companies are putting plans into action.

  • Darden Restaurants [parent of Red Lobster and Olive Garden] was among the first companies to say it was changing hiring in response to the health-care law.
  • Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul.
  • CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s burger chains, began two months ago to hire part-time workers to replace full-time employees who left.
  • Home retailer Anna’s Linens  is cutting hours for some full-time employees to avoid the insurance mandate if the healthcare law isn’t repealed.

Source: Forbes

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The Supply Side

A new book by University of Chicago economist Casey Mulligan explains that through a major expansion of the welfare state we are paying people not to work:

He says that public policies enacted during the Obama administration’s first four years have been affecting the supply side of the market as reflected in the labor force participation rate.

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In the matter of a few quarters of 2008 and 2009, new federal and state laws greatly enhanced the help given to the poor and unemployed — from expansion of food-stamp eligibility to enlargement of food-stamp benefits to payment of unemployment bonuses — sharply eroding (and, in some cases, fully eliminating) the incentives for workers to seek and retain jobs, and for employers to create jobs or avoid layoffs.

If a person gets laid off and is offered a new job paying $500 a week …. his take home pay would be about $250 after deducting taxes and work related expenses.

Since untaxed unemployment benefits total $289, clearly he is better off not working … [at least for 99 weeks].

All in all, Mulligan estimates that about half the precipitous 2007-2011 decline in the labor-force-participation rate and in hours worked can be blamed on easier eligibility rules for disability benefits,  unemployment insurance, food stamps and housing aid.

Source: Forbes

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BLS: “Oops … we found some initial unemployment claims that we forget to report before the election”

November 15, 2012

Unbelievable !

Now that the election is done, the BLS has “caught up” on initial jobless claims reporting … their words, not mine.

Here’s a shocker …

They’ve figured out that unemployment is more of a problem than they’ve been reporting.

In the week ending November 10, the advance figure for seasonally adjusted initial claims was 439,000, an increase of 78,000 from the previous week’s revised figure of 361,000.

The 4-week moving average was 383,750, an increase of 11,750 from the previous week’s revised average of 372,000.

The consensus forecast for this week –- based on prior weeks’ reporting – was 375,000 … 64K lower than the BLS’ surprise number.

I say: Let’s raise taxes and get this economy moving again …

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Technical note: While blame will be laid on Hurricane Sandy, keep in mind that (1) hurricanes temporarily boost employment of construction & trades workers, and (2) the affected areas were without electricty and many government offices (e.g. FEMA outposts) were closed … so, these initial unemployment claims are probably under-reported (as usual) … the fuller impact of the hurricane will show up in the next couple of weeks.

= = = = =
Ohio & PA

The highest numbers of new filings came from Pennsylvania and Ohio, where there were thousands of layoffs in the construction, manufacturing, and automobile industries.   During his campaign, President Obama highlighted his record of job creation in those states —  Ohio in particular.  Source

Oops.

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Smoking gun: BLS streak comes to an end … coincidence?

November 8, 2012

As Gomer Pyle would say: Suprise, suprise, suprise.

This is absolutely unbelievable …

The BLS streak — understating initial unemployment claims – ended this week.

In all the prior 26 election season weeks, the BLS’s “headline number” under-reported initial unemployment claims … and cast the jobs situation as brighter than it really was.

The election was Tuesday, right?

Well, guess what.

Here’s what the BLS report this morning … read it carefully.

  • In the week ending November 3, the advance figure for seasonally adjusted initial claims was 355,000, a decrease of 8,000 from the previous week’s unrevised figure of 363,000.

English translation: Some how, the BLS was miraculously able to eliminate the reporting bias that had been consistently evident in the run up to the election.

Frankly, I’d expected them to wait a few weeks to create some distance from the election … then “modify” their reporting.

Nope.

Tell me again how the BLS is just a group of apolitical bureaucrats cranking out consistently reported facts.

The good news is that I can finally stop tracking and reporting the streak.

Quick, somebody call Jack Welch…

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Digging into the 7.9% number …

November 2, 2012

The “Establishment Survey” of employers reported that 171,000 jobs were added in October.

The “Household Survey” … the basis of the unemployment rate calculation … reported that 410,000 jobs were added in October.

That’s on top of the 873,000 jobs reportedly added in September … when the Establishment Survey reported 114,000 jobs added.

So, the Household Survey says that 1,283,000 jobs were added in September and October.

The Establishment Survey says that employers added  255,000 jobs  in September and October.

The difference is roughly 1 million jobs … a big difference which, in many quarters, would be considered statistically significant.

For example, if the October Household Survey had claimed the same 171,000 as the Establishment Survey, the unemployment rate would’ve bumped to 8% … not 7.9%.

And, if the Household Survey had been in alignment with the Establishment Survey in both September and  October, then the unemployment rate would be about 8.5%.

Draw you own conclusions.

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Old song … BLS still under-reporting initial unemployment claims.

November 1, 2012

Yeah, yeah, yeah … I’m getting as tired writing about it as you’re getting reading about it.

But, the BLS streak — understating initial claims – continued this week.

Now we’re up to at least 26 election season 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 today’s BLS report, the number for the week ending October 20 was revised upward from 369,000 to 372,000 … making this week’s headline look 3,000 better.

These guys can’t be this sloppy or this stupid … can they?

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To put today’s number in context. let’s flashback to the chart in yesterday’s post

The reported 4-week moving average is 374,000.

So, if the relationship of inital unemployment claims and the unemployment rate holds, tomorrow’s BLS report should be an unemployment rate of about 8.1%

That’s what all of my analyses say that the number is … but I’m still betting the under.

I think the BLS will fudge the numbers to keep the unemployment rate under 8%.

We’ll see tomorrow.

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Ahead of Friday’s number …

November 1, 2012

Last month, there was a “discontinuity” between jobs added as reported by the BLS’ establishment survey of employers (114k jobs added) and the household survey (873k).

The spurt in the latter drove the unemployment rate calculation (7.8%) which raised many eyebrows.

So, what to expect this Friday?

Looking back to the beginning of 2011, job growth via the employer survey has averaged 150,000 per month; the household survey has averaged  179,000.

Said differently, the employer survey has reported about 3 million jobs added; the household survey has reported about 3.6 million jobs added.

Below is a chart that indexes the two series back to January 2011.

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Note that for the past couple of months, the less stable household survey has bounced over and under the employer survey.

That’s what you’d expect for two comparable data series drawn from different samples.

So, statistically speaking, I’d expect one of two outcomes this Friday … either:

1) The household series “averages out” and bounces under the employer number … showing a decline of about 350k jobs and a a higher unemployment rate, or

2) The household series “serially correlates” (i.e. continues a high run) … and burps out another sizable increase in employment (say, 250k) … and another reduction in the unemployment rate.

If #1 happens, Team Obama will argue that you shouldn’t place too much weight on one monthly number … an argument that they shelved last month.

If #2 happens, Team Romney (and Jack Welch) will claim book-cooking again.

Either way, I think voters will yawn since they believe so little of what gets spewed out these days

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Study says gender pay gap really is an issue …

November 1, 2012

Punch line:Women are attending college at higher rates than men, graduating in greater numbers and earning higher grades. Yet one year after graduation, women were making only 82 percent of what their male colleagues were paid.

* * * * *

Excerpted from The Washington Post’s, “One year out of college, women already paid less than men, report finds”

Equal Pay - Photo Illustration by 731

Nearly every occupation has long paid men more than women, despite laws aimed at narrowing and dissolving the differences.

Even when men and women had the same majors, there were often gaps in pay.

But much of the overall gap — the 18-percentage-point disparity — could be explained by career choices; men are more likely to enter high-paying fields such as engineering and computer science.

The researchers controlled for that, along with other variables, but an “unexplained” 6.6-percentage-point gap remained.

The researchers put forward suggestions for reducing the pay gap, including encouraging women to pursue careers in higher-paying fields and to negotiate higher pay.

“A problem as long-standing and widespread as the pay gap, however, cannot be solved by the actions of individual women alone,” the researchers wrote.

“Employers and the government have important roles to play. The pay gap has been part of the workplace so long that it has become simply normal.”

Edit by JDC

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Re: Friday’s big number … what to expect (if the BLS doesn’t hide-the-weinie).

October 31, 2012

Hurricane Sandy has put the BLS between a rock and a hard place.

There are 3 scenarios:

1) The BLS hides behind Sandy’s skirt-tails and  takes an incomplete — failing to report the most important number in the most important election … until the election is over.  Just imagine if Obama wins and the BLS reports next week (or next month)  that the unemployment rate went back up to 7.9% or 8% or higher.

2) The BLS rushes a preliminary number that shows the unemployment rate going down to, say,  7.8% … and then revises it upward after the election. Think, the BLS streak of under-reporting initial unemployment claims.

3) The BLS reports that the unemployment rate went down again as still another 850,000 folks find part-time work somewhere, someplace … and, Jack Welch goes nuts.

4)  The BLS reports on time that the unemployment rate went up and Obama orders a DOJ investigation.

* * * * *
My bet: They’ll report on time that the unemployment rate clicked up to 7.9% …  it’s the best “managed” number …. let’s Obama crow that it’s under the magic 8% … and, let’s Romney point out that it’s going in the wrong direction.

Based on the numbers, I’d expect the unemploymen rate to bounce back up to at least 8%.

Here’s my logic…

Initial unemployment claims should track pretty closely with the reported unemployment rate, right?

Well, they do usually … but didn’t last month when the miraculous 7.8% was reported.

Just eyeballing the chart below – which maps the 4-week moving average of initial claims against the unemployment rate – one might have expected an unemployment rate of just over 8% … not 7.8%

Looking forward to this Friday’s unemployment rate … based on the 4-week moving average of initial claims … the unemployment rate should pop back to at least 7.9% … maybe back over over 8%.

That is, unless Welch is right and the BLS is cookin’ the books.

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BLS may delay Friday employment report … are you kidding me?

October 29, 2012

I guess when the announcement went out that”only essential Federal employees need report”, the folks at the BLS rolled over and went back to sleep.

According to the WSJ

“… government statisticians and others may not be able complete the preparation of the jobs report before scheduled release time later this week.due to the weather and associated power outages and transportation disruptions.”

Why do I not find this surprising?

Memo to BLS: Get your stupid butts to the office, order a stack of pizzas, and crank until the gov’t emergency generators stop cranking power to your computers.

Somebody pass to the word to Jack Welch, ok?

Hard to believe … the BLS streak rolls right on.

October 25, 2012

I though the BLS might find some old time religion – or at least hire a new stats guy – since they got hammered on the incredible 7.8% unemployment number.

Not so.

And, the BLS streak — understating initial claims – continued.

Now we’re up to at least 25 election season 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 today’s BLS report, the number for the week ending October 13 was revised upward from 388,000 to 392,000 … making this week’s headline look 4,000 better.

Glad the election is only 12 days away.

Wanna bet that the BLS makes a post-election change to their methodology?

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Compare the economic recovery plans …

October 25, 2012

Seriously, before you vote, at least glance at the plans being offered by Obama and Romney.

You decide which is substantial and which is fluff ..

* * * * *

click to view very short video intro

click to view plan

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click to see Business Insider’s summary of the plan’s highlights:
Obama Has Released A 27-Point Plan For His Second Term, And It’s A Doozy

* * * * *

click to view

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click to see Business Insider’s summary or Romney’s plan
Here’s Everything We Know Now About Mitt Romney’s Economic Plan

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