Real Unemployment 11 Percent; Total Unemployment 15.6 Percent

Townhall.com ^ | December 3, 2011 | Mike Shedlock

[Kaslin]

Quick notes about the "falling" unemployment rate:

• In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.  
• In November, those "Not in Labor Force" rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed. 
• Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Jobs Report at a Glance

Here is an overview of November Jobs Report, today's release.

• US Payrolls +120,000
• US Unemployment Rate Declined .4 to 8.6%
• Civilian labor force fell by 315,000
• Those Not in Labor Force rose by 487,000
  
• Participation Rate fell .2 percentage points to 64.0%, nearly matching a low last seen in 1984
  
• Actual number of Employed (by Household Survey) rose by 278,000
• Unemployment fell by 594,000
  
• Civilian population rose by 172,000
  

• Average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours for the second consecutive month.
• The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down 0.1 hour to 33.6 hours in November.
• Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18
  
• Government employment decreased by 20,000
• The private sector has only recovered 33 percent of jobs lost in the peak-to-trough period of January 2008 to February 2010.

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

For the second month the labor force rose. This is a welcome sign. However, were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.

November 2011 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) November 2011 Employment Report.

The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. Government employment continued to trend down.

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted



Notice that actual employment is lower than it was nearly 11 years ago.

Nonfarm Employment - Payroll Survey - Monthly Look - Seasonally Adjusted



click on chart for sharper image

Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs.

In the last year of the weakest recovery on record, 2.5 years old, the economy averaged about 131,000 jobs a month.

Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat.

Nonfarm Employment - Payroll Survey Details - Seasonally Adjusted



Average Weekly Hours



Index of Aggregate Weekly Hours



Average Hourly Earnings vs. CPI



"Success" of QE2 and Operation Twist

• Over the past year, average hourly earnings of all employees have increased by 1.8 percent. The consumer price index for all urban consumers (CPI-U) was up 3.6 percent from October 2010 to October 2011. 
• Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18 in November after increasing 12 cents over the prior 2 months. 
• Not only are wages rising slower than the CPI, there is also a concern as to how those wage gains are distributed.

BLS Birth-Death Model Black Box

The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.

The BLS has moved to quarterly rather than annual adjustments to smooth out the numbers.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth Death Model Adjustments For 2011



Birth-Death Notes

Do NOT subtract the Birth-Death number from the reported headline number. That is statistically invalid.

It is exceptionally rare to see negative numbers in birth-death adjustments in months other than January and July. Data for much of this year actually seems reasonable.

Household Survey Data



click on chart for sharper image

In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.

Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Table A-8 Part Time Status



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Part-time status is essentially right where it was a year ago.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.



click on chart for sharper image

Distorted Statistics

Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers. Digging under the surface, the drop in the unemployment rate is nothing  but a statistical mirage.

The official unemployment rate is 8.6%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

While the "official" unemployment rate is an unacceptable 8.6%, U-6 is much higher at 15.6%.

Falling unemployment rate would normally be considered a good thing, but not if it is happening because 1,793,000 people stopped looking for work.

Things are much worse than the reported numbers would have you believe. The entire economic picture is on very thin ice given the clear slowdown in the global economy.

[sport]

Real Unemployment 11 Percent; Total Unemployment 15.6 Percent

I know that and it won't be long before it is 20% and higher. Soon only those approved by Government [read affirmative action types]will work. Every aspect of the economy will be under the control of a Government Bureaucrat. Just as National Socialists Germany, the Soviet Union andother Communists Countries.

[sport]

Here is an overview of November Jobs Report, today's release. US Payrolls +120,000 US Unemployment Rate Declined .4 to 8.6% Civilian labor force fell by 315,000 Those Not in Labor Force rose by 487,000 Participation Rate fell .2 percentage points to 64.0%, nearly matching a low last seen in 1984 Actual number of Employed (by Household Survey) rose by 278,000 Unemployment fell by 594,000 Civilian population rose by 172,000 Average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours for the second consecutive month. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down 0.1 hour to 33.6 hours in November. Average hourly earnings for all employees in the private sector fell by 2 cents to $23.18 Government employment decreased by 20,000 The private sector has only recovered 33 percent of jobs lost in the peak-to-trough period of January 2008 to February 2010.

The above, My FRiend, is pure propganda. It would make any Communist Country proud.

[Kaslin]

Look who’s in the People’s House

[eyeamok]

When I was a child in school we used to call this FRAUD, and when you consider that our Public Masters will try to use this as justification for more Stimulus spending, it quickly rises to the level of EXTORTION and LARCENY. Hang the whole bunch.

[Arlis]

QUESTION: WHY are NONE of the Repub candidates screaming this from the mountain tops????????

Not even Santorum or Bachmann?????? Or Cain?????

A large percentage of people know this is true....

[wally_bert]

AA’s always seem to find a job or gig no matter how good or bad they are.

I guess in the eyes of the AA ringleaders, it is time for the white man to pay for everything wrong real or imagined.

[xzins]

One chart showed that the November hiring was 50+22=72 of 120 (well over half) in retail, leisure/hospitality.

In other words, Christmas hiring.

[libertarian27]

It drives me nutso when the media says people have given up/ stopped looking for work/money and do not clarify that statement.

I just checked the ‘food stamp’ stats
People on SNAP is at 45,837,824 (Aug ‘11)
Last year the figure was 42,389,926 (Aug ‘10)
(That’s a 3,447,898 increase in one year)

Many of those who are not employed are most likely supplementing ‘living’ with ‘food stamps’
http://www.fns.usda.gov/pd/34SNAPmonthly.htm

I can’t find any up-to-date stats on HUD section-8 housing - the last stats the government put out that I can see is from 2008 - section-8 kicking around 5 million homes (that number has got to be higher now)

For many people - having free food and free housing makes it easier to not work. Some people going off unemployment payments have to be shifting to government subsidies.

Then you have two income families that go to one.....people moving back to parents or family. People opting to collect early social security.

You just don’t ‘give up looking’ for money - unless you have a trust fund or a net to catch you......

[Marie Antoinette]

Hmmm, weren’t we talking about this yesterday?

[algernonpj]

Removing discouraged workers from the civilian labor force after a period of time was an 'enhancement' introduced under Clinton as part of a major overhaul of unemployment statistics.

· Revisions to the Current Population Survey Effective January 1994

[mewzilla]

Why are none of the Pubbies screaming bloody murder....?

America's Ruling Class -- And the Perils of Revolution By Angelo M. Codevilla from the July 2010 - August 2010 issue

[sport]

My FRiend, I have, frro observing the Republican Congress critters, came to the conclusion that the only reason that there is still a Republicn Party is becaues we use a two party system. The only decision making party is the Democrat Party. The Democrats, to fool and keep the sheep pacified, allow the Republicans to make a minor decision from time to time. But , for all practical purposes, there is only one Party, the Democrat Party. The Republican Party is merely Lite Democrats.

[libertarian27]

Here’s some more stats:
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/index.html

As of Oct 2011 60,542,000 are collecting some form of SS or SSI

In 2010 the number was 54,031,968

That’s a 6,510,032 increase of people getting SS or SSI
(how much of that is a baby boomer bump-I don’t know?)

There’s more to the unemployment numbers than unemployment.

The Shift is ON

[Ghost of Philip Marlowe]

Mish and Tim Wallace know what they are talking about.

I exchange comments with Wallace. He has said elsewhere that the true U6 is over 22% at this point. That figure takes into account the increase in population and the number of jobs that have traditionally been added every year based upon population increase as a factor in the total participation number. Most figures do not include the total number that HAS BEEN added over the years and which have been lost in addition to the hard number of jobs lost.

I think Wallace has the better grasp on the OVERALL TOTAL of jobs that have been lost/not created since Obammie the Commie’s reign of domestic terror began.

[txrefugee]

People all over the country know that this is just another government lie to try to help Democrats in the 2012 election. It actually makes them look worse because of the blatant scamming of the numbers.

Unfortunately, almost every family has someone who is unemployed now. They are not fooled.

[trebb]

QUESTION: WHY are NONE of the Repub candidates screaming this from the mountain tops???????? Not even Santorum or Bachmann?????? Or Cain????? A large percentage of people know this is true....

I would assume that this will become a bigger issue once the Repub candidate is chosen (or once it's down to 2 or 3 still in). It makes sense to wait for the situation to evolve so they can either show how bad it is at that time, or not be bitten because things have changed substantially from the initial attacks.

[CincyRichieRich]

It’s as if our side (Boehner,et al)wants Obama to win. Why else would numbers like this simply be ignored and not touted when a camera is in their face and blame Obama? Why?

[corlorde]

bookmark

[the invisib1e hand]

This is a recovery?

No, it's Hope and Change.