Job losses much worse than estimated
by Meteor Blades
Daily Kos
Sat Oct 09, 2010
Unemployment for the year ending March 2010 was worse than previously stated, the Bureau of Labor Statistics announced Friday as part of its monthly jobs report. There were 366,000 more Americans who lost their jobs than previously counted. But those depressing numbers, or something close to them, won't be officially added to the final official count until the January 2011 monthly jobs report is released in February. Those aren't the only numbers that demonstrate the economy to be worse off than it appears. But let's go one step at a time.
The chart below includes the BLS's revision.
Last year, in February 2009, another BLS revision showed that a shocking 902,000 more jobs than previously estimated had been lost in the previous year. That was the biggest revision ever, both in absolute and percentage terms, clocking in at a 0.7 percent overall change for the period. In the two previous years, a total 382,000 more jobs than previously estimated had to be added to the numbers. Add Friday's announcement of 366,000 lost jobs that went previously uncounted and, all told, 1.65 million more jobs were lost in the past four years than the BLS's original counts have included.
Such BLS revisions - the benchmark revision - have been standard procedure since 1979. Throughout the year, the bureau relies on a sampling technique that allows it to present monthly estimates of the nation's job situation. The sampling covers some 140,000 business and government establishments responsible for about one-third all of nonfarm payroll employees. This, however, is an inexact approach. So, every year, the bureau undertakes a major revision of unemployment data it has gathered to get a clearer and better calculation of joblessness. The revision is announced in October and finalized in the jobs report released in February. You can read about the methodology behind this revision here.
(More here.)
Daily Kos
Sat Oct 09, 2010
Unemployment for the year ending March 2010 was worse than previously stated, the Bureau of Labor Statistics announced Friday as part of its monthly jobs report. There were 366,000 more Americans who lost their jobs than previously counted. But those depressing numbers, or something close to them, won't be officially added to the final official count until the January 2011 monthly jobs report is released in February. Those aren't the only numbers that demonstrate the economy to be worse off than it appears. But let's go one step at a time.
The chart below includes the BLS's revision.
Last year, in February 2009, another BLS revision showed that a shocking 902,000 more jobs than previously estimated had been lost in the previous year. That was the biggest revision ever, both in absolute and percentage terms, clocking in at a 0.7 percent overall change for the period. In the two previous years, a total 382,000 more jobs than previously estimated had to be added to the numbers. Add Friday's announcement of 366,000 lost jobs that went previously uncounted and, all told, 1.65 million more jobs were lost in the past four years than the BLS's original counts have included.
Such BLS revisions - the benchmark revision - have been standard procedure since 1979. Throughout the year, the bureau relies on a sampling technique that allows it to present monthly estimates of the nation's job situation. The sampling covers some 140,000 business and government establishments responsible for about one-third all of nonfarm payroll employees. This, however, is an inexact approach. So, every year, the bureau undertakes a major revision of unemployment data it has gathered to get a clearer and better calculation of joblessness. The revision is announced in October and finalized in the jobs report released in February. You can read about the methodology behind this revision here.
(More here.)
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3 Comments:
Sure “jobs” are a problem, but it’s not a new problem … in fact, it has been a problem for a decade. Quickly, I see three reasons why :
1. Employee productivity. Since the end of the recession in June 2009, manufacturing output has increased by 9.6% (or by $270 billion) through August of this year, while manufacturing employment has decreased by -0.90% (or by 103,000 workers) during that 14-month period. As the LA Times reported in a story that could have had the headline “No Help Wanted Sign this time” : Forced to cut costs during the recession, employers across the country are looking at ways to avoid hiring. They've accelerated use of computers and technology, replacing administrative assistants with software, cashiers with self-service kiosks and laborers with machines.
These structural changes mean some jobs that disappeared during the recession may never come back. Productivity gains are good for company profits and help the economy grow over the long run. But in the short term, the shift is exacerbating America's jobless recovery.
2. Outsourcing … Shelley Madore has pointed out during her campaign to represent Minnesota’s Second District that 10,900 manufacturing jobs have been lost in this district since John Kline took office. According to the Alliance for American Manufacturing, Minnesota's Second Congressional District is ranked 22nd of the 435 Districts nationwide in terms of net job losses to China due to growing trade losses from 2001-2008.
3. Population Ratio. Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000. The September 2010 data has it at 58.6%, down from 58.9% for the same period last year, and from 58.8% for the previous month in August.
The “new reality” is that higher than desired unemployment is the “new norm” --- unless the tax code is changed that currently allows corporations to take deductions for business expenses associated with expanding operations in other countries.
People are reacting to the television newscaster reporting the negative net number of job losses instead of looking into the details and trends.
Total private jobs are up in September from August which was up from July and is also up from September 2009. In fact, President Obama noted that "We’ve now seen eight straight months of private sector job growth." The increase of 64,000 jobs last month brings the total number of private-sector jobs added this year to 863,000, which is the largest 9-month gain in private payroll employment since the summer of 2007. Job openings for the private sector are 36% ahead of last year, or by 751,000 openings.
Instead of looking at the September number, it’s the trend that is important …employment in the private sector is growing, at an annualized rate of about 1.2–1.5% over the past six months … which is about the average pace of job growth in the previous recovery. The BLS is one indicator, but there are others such as the household survey which is better able to pick up jobs created by small startups. The household survey shows that the private sector has created about 1.7 million jobs year-to-date, which is about half of what the BLS number shows.
Another consideration is that Challenger, Gray & Christmas, announced corporate layoffs last month remained at close to the lowest level registered in the past 11 years which indicates that Corporate America has finished its downsizing. Why … because profits are up … in fact, the National Income and Profit Accounts (which tabulates what corporations report to the IRS meaning that is after all subsidies, etc.) set an all-time record in June.
Things are actually better than the Republicans want to portray … for example total auto sales in September were about 2% stronger than expected and are up at a 16% annual rate from their Feb. '09 low. Another important industry is home construction and there the Mortgage Bankers' Association purchase index, which includes all mortgage applications for the purchase of a single-family home, is up over 20% from its low in July … the vector is going in the right direction.
IMO, the job losses that are to come will be in the government sector … that’s what the Republicans want and what the states will need to do to balance their budgets. The September BLS report for “Government” jobs indicates that they are down … down last month, which was down from the prior month and lower than it was a year ago … with the most reductions being in state and local governments. There was a concerned about the influx of temporary census workers but as of September, about 6,000 temporary decennial census workers remained on the federal government payroll, down from a peak of 564,000 in May. Overall, government employment fell by 159,000 in September --- that’s not all census workers – that’s teachers, police, and other service workers.
Things are better than they were … but we live in a world of Two America’s … judging by the sale or I-pads, I-pods and GuitarHero games … while at the same time seeing data reporting the increase in the number of people living in poverty, you know we have Two America’s.
...and at the current rate of private sector job creating, it will 10 more years before unemployment returns to 5%...
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