Miracle of miracles, the unemployment rate has dropped below 8% for the first time in nearly 4 years and it happens coincidentally the month prior to the election. But there is something funky with the numbers. I checked out the Bureau of Labor Statistics (BLS) and got the following numbers:
Month / Jobs Created / Unemployment Rate
- January / 275K / 8.5%
- February / 259K / 8.3%
- March / 143K / 8.3%
- April / 68K / 8.2%
- May / 87K / 8.1%
- June / 45K / 8.2%
- July / 181K / 8.2%
- August / 142K / 8.3%
- September / 114K / 8.1%
- October / no data / 7.8%
So, February saw the creation of 259,000 jobs and didn't budge the unemployment rate for March. The 275K jobs in January saw a drop of 0.2% in the unemployment rate. Now, between August (142K) and September (114K), there have been 258K jobs created but the unemployment rate drops by half a point! So, fewer jobs than in January have had double the impact. Something doesn't smell right here.
Mitt Romney has been reporting that if the same number of people were in the workforce as when Obama was inaugurated, the unemployment rate would be closer to 11%. What he is talking about is the Labor Force Participation Rate. It was 65.7% in January 2009 but has fallen to 63.6% as of September. What that means is that of people between the ages of 15 and 65, 2% of them have dropped out of the labor force and are no longer counted in the unemployment numbers.
Then there is the growth rate. The economy grew at a 3% rate in the first quarter (Jan to Mar) of this year and that shows in the job creation numbers. That dropped to 2% in the second quarter, which likewise is reflected in the job numbers. It fell to 1.3% in the third quarter and yet we have this sudden burst of employment? Again, something doesn't make sense here. Let's say I'm skeptical.
1 comment:
That % is not a reflection of how many unemployed folks got jobs. It just shows how many have stopped trying to get jobs: The COUNT is a reflection of how many folks got jobs.
Jan+Feb added a half million working and that was 0.2% of the 'workforce'. But Agu+Sept added a quarter mil jobs which was now 0.5% of the 'workforce'. The only way to say that without telling a lie is to have a MUCH smaller total workforce of which the new jobs can be ratioed.
For any count X, X will become a larger percent of Y as Y decreases....
534:Y is 2%
then later 256:Y is 5%
You cant have that unless Y got much MUCH smaller (even with rounding error)
..or unless you are a liar, then you say that without a much smaller workforce Y
Use the figures to calculate the count of folks still unemployed. The folks that found jobs in Jan+Feb (0.2 : 8.5), roughly says that was 500k outta 21mil 8.5/.2 x 500k). However, later we hear about 250k jobs in Aug+Sep, which in the same formula goes something like
J+F) .2 / 8.5 : 500k / X, X=21mil unemployed
A+S) .5 / 8.3 : 250k / X, X= 4mil unemployed
*note: 17mil jobs were NOT created, those unemployed vanished
yes, there is severe rounding error with the .2
however, feel free to round it the most favorable way you can and the number of vanishing unemployed is still atrocious
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