Unemployment is Down!

[Dinner]

WASHINGTON (AP) -- U.S. employers slashed jobs by 63,000 in February, the most in five years, the starkest sign yet the country is heading dangerously toward recession or is in one already.

The Labor Department's report, released Friday, also showed that the U.S.'s unemployment rate dipped to 4.8 percent as hundreds of thousands of people -- perhaps discouraged by their prospects -- left the civilian labor force. The jobless rate was 4.9 percent in January.

Job losses were widespread, with hefty cuts coming from construction, manufacturing, retailing and a variety of professional and business services. Those losses swamped gains elsewhere including education and health care, leisure and hospitality, and the government.

The latest snapshot of the nation's employment climate underscored the heavy toll of the housing and credit crises on companies, jobseekers and the overall economy.

The report also showed that the job losses suffered in January were worse than the government first reported. Employers cut 22,000 jobs, versus 17,000.

It was the first monthly back-to-back job losses since May and June 2003, when the job market was still struggling to recover from the blows of the 2001 recession.

The health of the U.S.'s job market is a critical factor shaping how the overall economy fares. If companies continue to cut back on hiring, that will spell even more trouble.

Friday's report was much weaker than economists were expecting. They were forecasting employers to boost payrolls by around 25,000. However, they were expecting the jobless rate to edge up to 5 percent. The reason why the jobless rate went down, rather than up, is because so many people stopped looking for work and left the labor force.

http://abcnews.go.com/Business/Economy/story?id=4407470&page=1

Nothing shows how our current unemployment number has been rigged by the politicians better then when tens of thousands of jobs are lost but the official figure claims unemployment went down.

But the good times are rolling, right?

[Kidlicious]

Can you prove that politicians rigged up the unemployment rate?

[Dinner]

No, that's already been done in numerous threads, please keep up.

[Richelieu]

Lots of new recruits fro Irak!

[SlowwHand]

Don't forget, Unemployment Statistics only report those individuals filing, not the people who are out of benefits are don't qualify, for whatever reason.

Nor does it take into consideration people who are under-employed, but have to do something to try and get as close to making ends meet as possible.

All-in-all unemploymnet statistics are typical statistics, expredded in the manner suiting the story wanting to be told.

[DinoDoc]

Nor does it take into consideration people who are under-employed, but have to do something to try and get as close to making ends meet as possible.

Why would it? They're employed.

[snoopy369]

Your article, included the part you bolded, explains why the numbers do not move in sync. This is a well-documented research study that is done by the Census bureau, which is an independent department in the government.

Numbers that should prove you need a better tin-foil hat, from the actual report:

(Seasonally Adjusted)
January Employment rate: 62.9% of civilian noninstitutional >16 population (146.2m of 232m) 
February Employment rate: 62.7% (146.0m of 232m)
Net difference: About 250k

Unemployed:
Jan: 7.6m
Feb: 7.4m 
Net difference: 200k

Not in labor force:
Jan: 78.8m
Feb: 79.4m
Net difference: 650k

There was a 193k difference in population, which accounts for the difference 
in the (unemployed+employed) and (not in labor force) numbers.


(Non Seasonally Adjusted)
Employment rate:
Jan: 62.2% (144.61m)
Feb: 62.1% (144.55m) 
Net difference: 57k

Unemployed:
Jan: 8.2m
Feb: 8.0m
Net difference: 270k

Not In Labor Force:
Jan: 79.8m
Feb: 80.3m
Net difference: 520k

There was a 193k increase in the population over 16 during that time period, which accounts for the difference 
between 520k and the unemployed+employed numbers.

Whether you use Seasonally Adjusted numbers (generally more accurate, as they take into account how numbers are affected by the current month's normal patterns) or not, you can see that the employment rate fell by the expected amount this month - around 60k in actual numbers, or about 250k when you factor in the normal job creation expected in February. You see, also, that about half a million people left the workforce - meaning that, unless the unemployment rate is over 10%, you will see a slight fall in the unemployment rate.

What's also interesting is that the Feb 2008 vs Feb 2007 numbers are VERY different. Seasonally adjusted or not, we actually GAINED jobs from Feb 2007 to Feb 2008 by a significant amount - 860k more jobs, adjusted. Granted, the CLF increased by about 1m in that time period, so only about 85% of new job seekers had new jobs created for them, but that's hardly as bad as they're making this out to be. When we have 1yr data showing a loss, then I'll worry.

It will be interesting to see what happens as it gets warmer (April+ numbers) to construction jobs. Many areas of the country don't have much new home construction during the cold months, EXCEPT during boom times; but once April, and really May, hit, those numbers will be very telling.

[Caligastia]

4.8 percent! The horror! We are surely headed for disaster!

[snoopy369]

Originally posted by SlowwHand
Don't forget, Unemployment Statistics only report those individuals filing, not the people who are out of benefits are don't qualify, for whatever reason.

Nor does it take into consideration people who are under-employed, but have to do something to try and get as close to making ends meet as possible.

All-in-all unemploymnet statistics are typical statistics, expredded in the manner suiting the story wanting to be told.

Absolutely false. Unemployment statistics are calculated based on a telephone survey by the US Census bureau, and have NO RELATION to unemployment filings, nor to actual payroll data (while the second number is related to that, though it is also a survey in that it does not sample every payroll, but about 1/3 of them).

[Dinner]

A much better figure is employment rate.

[SlowwHand]

Originally posted by DinoDoc

Nor does it take into consideration people who are under-employed, but have to do something to try and get as close to making ends meet as possible.

Why would it? They're employed.

I'm not even going to try and explain it to you, DD.
You're bright enough that you should be able to figure it out.

[snoopy369]

Originally posted by Caligastia
4.8 percent! The horror! We are surely headed for disaster!

Also take into account the statistical error ... this is 4.8% +/- 0.2%, and 4.9% with the same error, so we really could have had no change, or a much bigger change. (I don't have data for the error of the other survey.)

I'm also amused that this was just posted today... this data was released 3/7/08 and in fact, tomorrow the march report is due to be released

[Kidlicious]

Originally posted by Oerdin
A much better figure is employment rate.

The problem with that is that it doesn't say anything about the potential for economic growth or inflationary pressure. That's why the unemployment rate is used dispite the fact that it is not perfectly accurate.

[snoopy369]

Originally posted by Oerdin
A much better figure is employment rate.

That depends, actually. Employment rate, Participation rate, Unemployment rate, all have meaning. For example, in February, 1.6m people were 'marginally attached' to the labor force. They were not counted as Unemployed, because they did not seek work in the last 4 weeks, but they did seek work or did work in the past 12 months. About 396k of them were 'discouraged' workers, ie they didn't look because they thought they couldn't get a job - about the same as Feb 2007 - and the other 1.2m did not due to school or other responsibilities. (See the summary)

That number - 396k - tells you a lot about the economy. When that number dramatically increases - say, to 800k - you have strong evidence that jobs are very hard to find, and have been for months; so it is a good indicator of long-term health of the economy (6 months or more, typically).

However, it tells you little about this month- because in Feb., anyone who had already given up would have done it based on the Dec-Jan-Feb economy, not the Feb economy specifically. It could also, however, indicate attitude rather than actuality.


Unemployment rate tells you that people are looking for work and not finding it THIS month; it tells you something about people who recently lost their jobs, and also tells you something about people who need a job (people are less likely to give up when they need a job badly); from my analysis, it probably tells you more about people who are highly trained or professional labor (who are less likely to give up) and retail (who have plenty of opportunities and lots of turnover) and less about manufacturing and factory jobs (who in a downturn often have no jobs to look for, and so give up). (That is all my speculation and not based on specific knowledge, but it is conceptually correct, whether or not the specific sectors are correct.)

Employment rate is interesting to show the actual number of jobs, of course, but it actually doesn't tell you that much about the economy, because the job creation number is MUCH more accurate (coming from a survey of about 30% of all jobs coming from actual payroll numbers, while the household sample is only 60k out of 200m) and gives you a similarly useful number. Hence why the two numbers shown are Unemployment rate and Job Creation/Loss rate.

[snoopy369]

I was also amused by the increases in hourly wages. The average wage increase Feb 2007-Feb 2008 was 3.7%. I wonder how many of us got a raise over 3.7%?