revgen
12-03-2011, 12:17 PM
DROP IN UNEMPLOYMENT RATE MISLEADING
Labor Department officials released the job numbers report for November 2011 on Friday. The report showed the unemployment rate dropping to 8.6%, as the economy added 120,000 new workers in November.
However, the drop in the unemployment rate is a bit misleading. Just around 315,000 people stopped looking for work or exhausted their benefits and were no longer counted in the unemployment rate.
The private sector added 140,000 jobs to the economy in November, but the public sector dropped by 20,000 jobs. Even with the job gains, over 13 million Americans continue to look for employment.
Employment gains by the private sector were boasted by retailers and restaurants hiring 83,000 workers, mostly for the end of the year holiday season.
New jobs created barely hit the breakeven point, and half of those jobs are seasonal holiday jobs - meaning that if it weren't the holiday season, in all likelihood we wouldn't have even hit breakeven.
The drop in the unemployment rate, with an effective no-change in net new jobs, is explained by disgruntled people (some 315,000) no longer actively seeking work, thus removing them from the ranks of the "unemployed."
Here is a closer look at the November job numbers:
■ 8.6%: The unemployment rate for the month of November. Unemployment has now been above 8 percent for 34 consecutive months, the longest span since the Great Depression. From March 2009 (the month after the failed $1.2 trillion stimulus was enacted) through November 2011, unemployment has averaged 9.4 percent. Prior to President Obama taking office, unemployment had not been above 9 percent in 28 years.
■ 315,000: The number of people who simply stopped looking for work in November and left the labor force in this bleak economy.
■ 30,000: The number of additional jobs needed in November just to keep up with population growth. According to the Bureau of Labor Statistics, 150,000 jobs must be added each month to keep pace with population growth. Even with 120,000 new jobs in November, the economy was still 30,000 jobs short of keeping pace.
■ 34: The number of consecutive months the unemployment rate has been at or above 8 percent—the level the president said unemployment would never reach if the stimulus was approved. Prior to the enactment of the stimulus, unemployment had not been above 8 percent for this 34 consecutive months since the Great Depression.
■ 13,303,000: The number of unemployed Americans looking for work in the month of November. The number of unemployed eclipsed 13 million for the first time in history two months after President Obama took office and has remained above 13 million for 31 straight months.
■ 40.9: The average number of weeks it takes for job seekers to find a job—the longest average time that Americans have been unemployed since the statistic was first recorded in 1948. The average time it takes for people to find a job is up from 19.9 weeeks in January 2009 when Obama took office.
■ 8,518,000: The number of Americans who worked only part-time in November because they could not find full time employment. The number of people working part time for economic reasons reached 8 million for the first time in history in February 2009, the month the stimulus was enacted, and has remained above 8 million for 34 consecutive months.
■ 5,691,000: The number of Americans unemployed and searching for work for more than 27 weeks in the month of November. Since President Obama took office in January 2009, the number of people unemployed for more than 27 weeks has increased by 112 percent.
■ 1,855,000: The number of net jobs the economy has shed from February 2009—when the Democrats' stimulus was signed into law—through November 2011. On average, the economy has lost 54,558 jobs each month over that span.
■ 15.1%: The official poverty rate in 2010 according to the Census Bureau—up from 14.3 percent in 2009. This was the third consecutive annual increase in the poverty rate and the highest poverty rate since 1993.
■ 46,200,000: In 2010, 46.2 million Americans were in poverty, up from 43.6 million in 2009—the fourth consecutive annual increase in the number of people in poverty. The number of Americans in poverty in 2010 is the largest number in the 52 years in which poverty estimates have been published by the Census Bureau.
■ -$3,378: Inflation adjusted median household income dropped by $3,378 per U.S. family, falling to its lowest level since 1996. Household income has fallen by 6.4 percent since 2007.
■ 45,837,824: The number of Americans receiving food stamps as of August 2011, the most in any month in history. Today, 15 percent of Americans receive food stamps, an increase of 40 percent since President Obama took office.
■ 13th: Where the U.S. ranks in ease of starting a business in the world according to a World Bank report. In 2007, the U.S. ranked 3rd.
■ 1,276,000: The number of job seekers that are new to the workforce and have yet to find a job. The number of new workers who cannot find a job has been above 1 million for two years.
■ 23.7 %: The unemployment rate among job seekers between the ages of 16 and 19. Youth unemployment has been above 23 percent for 30 months, the longest streak since the Great Depression.
■ 15.5%: The unemployment rate among African Americans in November, up 22 percent since President Obama took office.
■ 11.4%: The unemployment rate among Hispanics and Latinos, an increase of 15 percent since President Obama took office.
■ 13.2%: The unemployment rate among Americans without high school diplomas, an increase of 7 percent since President Obama took office.
■ 6.5%: The level at which the Obama administration claimed unemployment would be today if the stimulus was signed into law.
■ $1,172,000,000,000: The total cost of the Democrats' stimulus. CBO estimates the cost of the bill will reach $825 billion and interest on the debt for the bill will be at least $347 billion.
I am glad that people are getting jobs and hopefully paying bills and putting food on the table, but this is far, far from an excuse to proclaim "recovery!" or "the stimulus worked!" The unemployed and underemployed trends over the course of the few months following the close of the holiday season will be much more telling of the actual health of the job market.
Sorry to put a damper on this "good news", but it's just not that good. The bulk of the drop in the unemployment rates was from the participation percent falling by 0.2%. There are two numbers that really matter -- the employment to population ratio and weekly earnings.
The employment to population ratio ticked up 0.1% from 58.4 to 58.5%. It was at those same levels from Jan to May before it went even lower this summer. So all we've done is returned to 1st half 2011 levels. Is that supposed to be a good thing?
As to weekly earning, avg private sector hours stayed at the same 34.3 hours per week it's been at all year. Hourly earnings are up 1.4% from January (actually down from Oct to Nov by a few pennies), but even the 1.4% is below the 3% inflation level reported. [and many believe that inflation number is a very low estimate of reality]
So the net is that for the year, the same percent of people are working, but they are earning 1-2% less in real dollars. Yet, we are celebrating. Our nation, our people have the capacity to do much better than this.
Put the politics aside, the biggest issue here is that we've set expectations so low. When just losing a little bit of ground is good news, we've lost our way. It's time to re-set our sights on what could be and what should be, not barely treading water.
For 2011, total non-farm payrolls (BLS series CES0000000001) is up about 1.2 million or about 130,000 per month. That is roughly break-even with population growth, which requires about 125,000 jobs per month. Hence, the employment-to-population ratio has stayed steady at a historically low 58.4%. To put it in perspective, from 1985 to 2008, that ratio was generally in the 62-64% range.
What does it say when people now look at 120,000 per month job growth as a positive sign? Talk about lowering expectations. This is like being happy if your child comes home with a D on their report card because it isn't an F. This child (the U.S.) is capable of A's and B's, and we should be expecting nothing less.
Lowering expectations hasn't worked in defining the roles of govt employees nor in setting the objectives for our public schools. If we let it permeate the way we view our economy, then we are truly lost.
http://www.highplainspundit.com/2011/12/drop-in-unemployment-rate-misleading.html
Doesn't surprise me.
Labor Department officials released the job numbers report for November 2011 on Friday. The report showed the unemployment rate dropping to 8.6%, as the economy added 120,000 new workers in November.
However, the drop in the unemployment rate is a bit misleading. Just around 315,000 people stopped looking for work or exhausted their benefits and were no longer counted in the unemployment rate.
The private sector added 140,000 jobs to the economy in November, but the public sector dropped by 20,000 jobs. Even with the job gains, over 13 million Americans continue to look for employment.
Employment gains by the private sector were boasted by retailers and restaurants hiring 83,000 workers, mostly for the end of the year holiday season.
New jobs created barely hit the breakeven point, and half of those jobs are seasonal holiday jobs - meaning that if it weren't the holiday season, in all likelihood we wouldn't have even hit breakeven.
The drop in the unemployment rate, with an effective no-change in net new jobs, is explained by disgruntled people (some 315,000) no longer actively seeking work, thus removing them from the ranks of the "unemployed."
Here is a closer look at the November job numbers:
■ 8.6%: The unemployment rate for the month of November. Unemployment has now been above 8 percent for 34 consecutive months, the longest span since the Great Depression. From March 2009 (the month after the failed $1.2 trillion stimulus was enacted) through November 2011, unemployment has averaged 9.4 percent. Prior to President Obama taking office, unemployment had not been above 9 percent in 28 years.
■ 315,000: The number of people who simply stopped looking for work in November and left the labor force in this bleak economy.
■ 30,000: The number of additional jobs needed in November just to keep up with population growth. According to the Bureau of Labor Statistics, 150,000 jobs must be added each month to keep pace with population growth. Even with 120,000 new jobs in November, the economy was still 30,000 jobs short of keeping pace.
■ 34: The number of consecutive months the unemployment rate has been at or above 8 percent—the level the president said unemployment would never reach if the stimulus was approved. Prior to the enactment of the stimulus, unemployment had not been above 8 percent for this 34 consecutive months since the Great Depression.
■ 13,303,000: The number of unemployed Americans looking for work in the month of November. The number of unemployed eclipsed 13 million for the first time in history two months after President Obama took office and has remained above 13 million for 31 straight months.
■ 40.9: The average number of weeks it takes for job seekers to find a job—the longest average time that Americans have been unemployed since the statistic was first recorded in 1948. The average time it takes for people to find a job is up from 19.9 weeeks in January 2009 when Obama took office.
■ 8,518,000: The number of Americans who worked only part-time in November because they could not find full time employment. The number of people working part time for economic reasons reached 8 million for the first time in history in February 2009, the month the stimulus was enacted, and has remained above 8 million for 34 consecutive months.
■ 5,691,000: The number of Americans unemployed and searching for work for more than 27 weeks in the month of November. Since President Obama took office in January 2009, the number of people unemployed for more than 27 weeks has increased by 112 percent.
■ 1,855,000: The number of net jobs the economy has shed from February 2009—when the Democrats' stimulus was signed into law—through November 2011. On average, the economy has lost 54,558 jobs each month over that span.
■ 15.1%: The official poverty rate in 2010 according to the Census Bureau—up from 14.3 percent in 2009. This was the third consecutive annual increase in the poverty rate and the highest poverty rate since 1993.
■ 46,200,000: In 2010, 46.2 million Americans were in poverty, up from 43.6 million in 2009—the fourth consecutive annual increase in the number of people in poverty. The number of Americans in poverty in 2010 is the largest number in the 52 years in which poverty estimates have been published by the Census Bureau.
■ -$3,378: Inflation adjusted median household income dropped by $3,378 per U.S. family, falling to its lowest level since 1996. Household income has fallen by 6.4 percent since 2007.
■ 45,837,824: The number of Americans receiving food stamps as of August 2011, the most in any month in history. Today, 15 percent of Americans receive food stamps, an increase of 40 percent since President Obama took office.
■ 13th: Where the U.S. ranks in ease of starting a business in the world according to a World Bank report. In 2007, the U.S. ranked 3rd.
■ 1,276,000: The number of job seekers that are new to the workforce and have yet to find a job. The number of new workers who cannot find a job has been above 1 million for two years.
■ 23.7 %: The unemployment rate among job seekers between the ages of 16 and 19. Youth unemployment has been above 23 percent for 30 months, the longest streak since the Great Depression.
■ 15.5%: The unemployment rate among African Americans in November, up 22 percent since President Obama took office.
■ 11.4%: The unemployment rate among Hispanics and Latinos, an increase of 15 percent since President Obama took office.
■ 13.2%: The unemployment rate among Americans without high school diplomas, an increase of 7 percent since President Obama took office.
■ 6.5%: The level at which the Obama administration claimed unemployment would be today if the stimulus was signed into law.
■ $1,172,000,000,000: The total cost of the Democrats' stimulus. CBO estimates the cost of the bill will reach $825 billion and interest on the debt for the bill will be at least $347 billion.
I am glad that people are getting jobs and hopefully paying bills and putting food on the table, but this is far, far from an excuse to proclaim "recovery!" or "the stimulus worked!" The unemployed and underemployed trends over the course of the few months following the close of the holiday season will be much more telling of the actual health of the job market.
Sorry to put a damper on this "good news", but it's just not that good. The bulk of the drop in the unemployment rates was from the participation percent falling by 0.2%. There are two numbers that really matter -- the employment to population ratio and weekly earnings.
The employment to population ratio ticked up 0.1% from 58.4 to 58.5%. It was at those same levels from Jan to May before it went even lower this summer. So all we've done is returned to 1st half 2011 levels. Is that supposed to be a good thing?
As to weekly earning, avg private sector hours stayed at the same 34.3 hours per week it's been at all year. Hourly earnings are up 1.4% from January (actually down from Oct to Nov by a few pennies), but even the 1.4% is below the 3% inflation level reported. [and many believe that inflation number is a very low estimate of reality]
So the net is that for the year, the same percent of people are working, but they are earning 1-2% less in real dollars. Yet, we are celebrating. Our nation, our people have the capacity to do much better than this.
Put the politics aside, the biggest issue here is that we've set expectations so low. When just losing a little bit of ground is good news, we've lost our way. It's time to re-set our sights on what could be and what should be, not barely treading water.
For 2011, total non-farm payrolls (BLS series CES0000000001) is up about 1.2 million or about 130,000 per month. That is roughly break-even with population growth, which requires about 125,000 jobs per month. Hence, the employment-to-population ratio has stayed steady at a historically low 58.4%. To put it in perspective, from 1985 to 2008, that ratio was generally in the 62-64% range.
What does it say when people now look at 120,000 per month job growth as a positive sign? Talk about lowering expectations. This is like being happy if your child comes home with a D on their report card because it isn't an F. This child (the U.S.) is capable of A's and B's, and we should be expecting nothing less.
Lowering expectations hasn't worked in defining the roles of govt employees nor in setting the objectives for our public schools. If we let it permeate the way we view our economy, then we are truly lost.
http://www.highplainspundit.com/2011/12/drop-in-unemployment-rate-misleading.html
Doesn't surprise me.