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July Unemployment August 7, 2009

Posted by geoff in News.
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The BLS released the unemployment rate for July this morning, and the answer is . . . 9.4%. A little lower than the Bloomberg survey predicted it would be, a lot lower than my swag of 9.8%, and, notably, a 0.1% drop from June’s rate of 9.5%.

Here’s how the actual data compares to the projections by Obama’s team:*

Stimulus-vs-unemployment-july-dots

Seems a little odd, since we actually lost 155,000 jobs in July (and we lost 247,000 jobs on non-farm payrolls). The only way we can lose jobs and still have the unemployment rate go down is if the labor pool goes down even faster. And in fact that’s what it did, dropping by 422,000 workers. But the “Want a Job” category only increased by about 100K, so where did the other 300K workers go?

JulyTotalInterestedWorkers

As you can see from the chart, both the unemployed and “want to work” categories dropped, and we know that the employed dropped as well. Something’s not right here, unless 300,000 people simply gave up entirely and decided to become bloggers or something.

[This post will be updated this morning as I crunch through the data and add more charts]

*As always, this chart was constructed by overlaying the actual economic data on top of the chart made by Obama’s economic team to market his stimulus plan.

Related posts under the fold:

**Here are some other posts on the subject:

  • The percentage of private-employed workers is steadily decreasing, meaning that the burden of supporting government workers is increasing. How long can this trend continue?
  • The June numbers.
  • Mark Zandi (Moody’s Economy.com) kind of agreed with the Obama team’s projection back in January. But his predictions weren’t much better.
  • Saying that “the recession is worse than anybody thought” is a tired old tune
  • Everybody did not “guess wrong” on the stimulus package
  • The corrected chart for May.
  • The predicted numbers for May from a few days ago, with some thoughts on why unemployment is worse than expected even without the stimulus package (and a hearty discussion in the comments on proper graphing)
  • A look at the stimulus package spending – how late it is, and how little thus far has been devoted to job creation (it’s basically gone to pay off states’ social services debts)
  • The April numbers
  • The original post on the subject, noting that criticisms of the stimulus package may not have been motivated by racism after all.
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Comments»

1. Name - August 7, 2009

I am hearing reports that this is an anomaly due to a drop in the total labor force – the BLS is claiming that total joblessness INcreased at a LOWER rate than total labor force size DEcreased.

Personally, I don’t believe a word that comes out of the likes of these people [Axelrod & the Psychological Warfare Team – Ariely, Thaler, Sunstein, and Kahneman].

2. Edward Von Bear - August 7, 2009

expect hosannas from the MSM

3. geoff - August 7, 2009

Yes, I’ve been looking over the data and that’s certainly true. But why? The marginally attached category only went up by 100K. Where did the rest of the workers go?

4. Dave in Texas - August 7, 2009

alien abduction

5. Mrs. Peel - August 7, 2009

Where did the rest of the workers go?

Back to Mexico?

6. Tushar - August 7, 2009

So now we will hear a lot about those discouraged workers and how they have slipped below the radar, thus showing an artificially low unemployment rate, right?… right? Bueller?

7. Jim B - August 7, 2009

422,000 workers left the workforce in July…3 times the number in June.

If my numbers of an American workforce of approximately 140M is correct, that’s 0.3% of the workforce. Add that number back and the unemployment rate actually climbed to 9.8%.

The number might look good in a headline, but the underlying truth is much uglier.

8. Will - August 7, 2009

Where did the rest of the workers go?

The Wun has so healed the world, that all the terrorist sleeper cells in the US have returned to their native lands to take up hemp-farming and basket-weaving.

9. Pupster - August 7, 2009

422,000 ‘workers’ stayed home last month to eat skittles and play with their unicorns.

10. geoff - August 7, 2009

I’ve been looking at the government employment numbers – if you look at one table they’re around 21 1/2 million, on another they’re 22 1/2 million. Seasonally adjusted or not, they don’t match up. One set of numbers says they lost jobs, the other says they added jobs.

I’m a little frustrated.

11. MostlyRight - August 7, 2009

I think the # of people (millions) axis needs to be fixed, unless there are really 20 billion people who want a job :-)

Shouldn’t the (millions) say (thousands), or your numbers on the axis be 5,10,15,20,25?

12. geoff - August 7, 2009

All right, all right. It’s fixed.

Geraghty’s talking about the discouraged worker category, but that’s pointless this month – it hasn’t changed much since April. That’s not where the people who lost the 247K jobs went.

13. Chef Obama - August 7, 2009

I haz kookt teh books.

14. MostlyRight - August 7, 2009

Sorry, it was my enginerd half showing.

I hope unemployment has truly peaked, but my gut says the “verify” part of “trust but verify” needs to be emphasized on this one. The Obama Admin has a pretty big self-interest in not seeing the unemployment numbers pass 10%, and the Dems in general cannot afford more bad news this month as they head home to face the individuals who gave them their jobs…and could take them away.

Dig DEEP into the numbers this month.

15. Herr Morgenholz - August 7, 2009

You could overlay what the actual number is, taking into consideration those who “left the workforce”. Triangles would be great for that.

16. Michael - August 7, 2009

Where did the rest of the workers go?

Easy. They are being paid under the table by insurance companies to disrupt town hall meetings.

17. Robert - August 7, 2009

How many government sector jobs were increased this month?

18. geoff - August 7, 2009

They are being paid under the table by insurance companies to disrupt town hall meetings.

I think they were put on The List and sent to the camps.

19. geoff - August 7, 2009

How many government sector jobs were increased this month?

See Comment #10.

20. Michael - August 7, 2009

I think they were put on The List and sent to the camps.

If that were true, you would be in a camp.

21. T. AKA Ricky Raw - August 7, 2009

I can’t wait to see official White House response to this. What will be the magical “jobs saved” number this time around?

22. Jim - August 7, 2009

If I did my calculations correctly, the people “not in the labor force” decreased by 637,000 in July and 358,000 in June. So the Labor Department has assumed a million people have left the workforce in 2 months. If they were in the workforce, the rate would be 10% for July.

Correct me if I’m wrong here.

23. geoff - August 7, 2009

Using the seasonally adjusted numbers, the BLS says that there were:

May 80,371
June 80,729
July 81,366

people not in the labor force. That category includes children and retired people, so it doesn’t tell you how many people have dropped out.

24. Tushar - August 7, 2009

>>people not in the labor force. That category includes children and retired people, so it doesn’t tell you how many people have dropped out.

A person counted as worker in the past is likely to move into the ‘retired people’ category, but as fas as I know, they rarely move back into the ‘children’ category. We need to see if 0.7 million people retiring in a month is a normal thing in US labor market.

25. TimothyJ - August 7, 2009

The Won has already claimed victory for saving the economy!

26. geoff - August 7, 2009

Well, I looked over the last year of data and here’s the deal.

Over the past year we’ve added about 100,000 people to the labor force (abnormally low), and we’ve added a million people to the want-to-work category (abnormally high). The sum of the two is probably low.

We’ve lost ~5.5 million jobs and added ~5.5 million people to the unemployed category. So that works out nicely.

My suspicion is that there are probably another 0.5 – 1 million people who are not being counted as being in the labor market who would enter the market if they could.

27. geoff - August 7, 2009

The bottom line is that we’re still losing jobs nearly across the board, and the unemployment rate has become a less and less relevant measure of the severity of the situation. The standard measure of unemployment (looked for work in the last 4 weeks) is laughable in this economy. And the huge numbers of people giving up are depressing the unemployment rate, just as they bounced it up in May when some of them came back into the market.

28. geoff - August 7, 2009

The Consumer Price Index (which showed a big jump in June) will be updated in a week. If unemployment is Scylla, then inflation is Charybdis.

Presuming, of course, that you’ve been so foolish as to venture upon the Rampant Deficit Spending Seas.

29. Odysseus - August 7, 2009

Fuck me then. Sheeit.

30. Dave in Texas - August 7, 2009

hahahahahaha

31. geoff - August 7, 2009

Fuck me then. Sheeit.

Weenie. I didn’t even get to part about the Storms of Oppressive Regulation.

32. Dave in Texas - August 7, 2009

geoff, slublog emailed me this theory today:

Had an interesting conversation with a co-worker of mine who is an economist. He says some of the temp jobs created by the stimulus artificially inflated the numbers, and estimates the actual unemployment rate is around 13-15%

33. geoff - August 7, 2009

That’s probably true. I meant to look at the age distributions, but got caught up in hunting down the missing workers. I’ll go have a gander now.

34. geoff - August 7, 2009

Teen unemployment is huge, and it was increasing in June and then declined by 0.2% in July. Slub’s friend is likely to be right – the President’s 600,000 summer jobs are probably keeping that number down.

I do think that the Stimulus should be having a perceptible effect by now – there are a lot of construction projects under way. But is it self-sustaining or will it ignite the rest of the economy? That I doubt.

35. TattooedIntellectual - August 7, 2009

Half of I 70 in MO is ripped up courtesy of “stimulus” funds. Pretty much all it did was piss me and every trucker on the road off.

Michael - August 7, 2009

Looking on the bright side, Daughter Michael just started a new job after about six months of unemployment. She’s actually making more than her old job.

36. The Infamous Obama Unemployment Graph 3: We Are Saved! « Avid Editor’s Insights - August 7, 2009

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37. Dave in Texas - August 7, 2009

Glad to hear things got better for your kid Michael.

38. Michael - August 7, 2009

Thanks Dave. It’s been a worry for us.

39. geoff - August 7, 2009

Daughter Michael just started a new job after about six months of unemployment. She’s actually making more than her old job.

Luckeeeeee!!!

That’s great to hear, Michael.

40. Michael - August 7, 2009

Luckeeeeee!!!

No shit. Imagine being a recently minted Marketing major in this economy.

Her new employer is into solar energy, so maybe some of that Porkulus money will flow their way.

41. Mrs. Peel - August 7, 2009

That’s good. Glad she found a spot. It’s ugly out there.

42. Michael - August 7, 2009

Thanks, Peel.

43. BrewFan - August 7, 2009

Youngest daughter BrewFan graduated from college today. I cried a little and am feeling kinda old tonight. Her degree is in early childhood education so hopefully something will turn up for her soon although she is a little late to the trough for the fall semester.

44. Mac - August 7, 2009

Trianglelessness notwithstanding, the real story here is the same one that’s gone on since this whole thing started: we were sold a bill of goods that the stimulus would do something helpful. All this administration has done is made the word ‘stimulus’ a pejorative.

45. steve2 - August 8, 2009

I actually find the stress test predictions a bit more useful. You can find them here at CR.

http://www.calculatedriskblog.com/2009/08/unemployment-stress-tests-unemployed.html

Steve

46. geoff - August 8, 2009

I actually find the stress test predictions a bit more useful.

Undoubtedly. This chart was always intended to show the difference between what Obama’s team predicted, and what has actually happened. As such, I’m locked in to their original graph. But it’s apparent that when you lose a significant number of jobs yet still see a drop in the unemployment rate, the unemployment rate has lost a lot of value as an economic indicator or even as a measure of the actual employment situation.

47. daveintexas - August 8, 2009

Brewster, my congrats to the graduate.

Wipe your eyes now.

48. Boghie - August 8, 2009

Where have the workers gone???

The Boomers are retiring. The Boomer Bulge is moving right on the age axis. The first five years of Boomers (1/4th of them) are 60+ years old. This is a macro problem and may not be the actual cause of the current issue – but it will exacerbate the problem soon enough, if not now.

Many of those folks did not prepare for retirement. They expected to get mighty fine social security benefits and to sell their McMansion for the big bucks. Many of them figured the stock market only goes up! Oh well…

That said, many of them DO NOT want to retire now – but, they may not be hirable in an environment of declining consumer spending by the GenXers. And, their benefit packages are being challenged because they didn’t pay for them during their working years. Oh well…

I would hate to be dependent on the good graces of the Latch Key GenXers.

49. Michael - August 8, 2009

Boghie, I read somewhere that Obamacare is actually a huge intergenerational ripoff, i.e., aging Boomers extracting premiums from unwilling (and healthy) GenXers to fund the medical care that will otherwise bankrupt the Medicare fund.

50. geoff - August 8, 2009

The Boomers are retiring.

I had considered that, but all projections show that while that age shift is in the process of happening, the labor force should still increase monotonically. But it ain’t.

51. Neo - August 8, 2009

Given the number of folks that fell off the unemployment rolls, it will be a real dilemma for Democrats to extend unemployment benefits and have those folks reappear in the numbers.

52. steve2 - August 8, 2009

Just in case you did not know, CR has a good explanation about differences in unemployment and employment numbers. Using any one number is inadequate. OTOH, too many numbers are difficult for many people to digest. I look for unemployment, underemployed, no longer looking for work and looking for work numbers. Gives a better picture.

Steve

53. geoff - August 9, 2009

I look for unemployment, underemployed, no longer looking for work and looking for work numbers. Gives a better picture.

But that’s the point raised in the post – those categories don’t entirely account for the people who are dropping out of the labor force, presumably involuntarily. We’ve lost track of an important category of people, due to the BLS’s antiquated survey.

CR has a good explanation about differences in unemployment and employment numbers

Sorry to be dense, but CR? Congressional Review? Consumer Reports?

54. steve2 - August 9, 2009

Calculated Risk. Probably the best graphic/numbers site of the econ blogs. Sorry for lingo.

Steve

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66. MD - July 8, 2010

Thank you so much for keeping the topic of congress and the stalled unemployments benefits legislation as part of the debate.

I am one of those nameless, faceless millions that has been abruptly cut-off of unemployment that you were talking about and I am outraged at how congress is treating us. I am a college graduate and have worked hard all my life. Congress is sticking their middle finger up at us. I just paid my rent with the last money in my account. I am going to be 2 months behind on utilities. I have my last $20 to eat for the rest of the week….my bank account will then say $0. I am holding my breath for July 12th.
THIRD WORLD COUNTRY?
My cousin is a college educated Lan Administrator and certified computer person and his has been pounding the pavement like an animal for a job. His unemployment benefits got cut at the worst time and he is now losing his apartment so he has to move in with my aunt, uncle and her daughter and 3 kids…I feel like I am having a bad dream.
My brother… a hard working AMERICAN…is losing his business of many years…his marriage has fallen apart and he will now have to move into the basement of a fellow college mate until he can back on his feet.

My Father, who worked harder than any person I know his whole life…just lost his house and had to move in with my sister and her husband and 4 kids…along with my other 2 sisters. They are living on top of each other. This is UNPRECEDENTED for anyone in my family!
EVERYONE I KNOW who is out of work is desperately trying to get work! AMERICANS ARE NOT LAZY!!!!
I am livid!!!!!!

67. geoff - July 8, 2010

Sorry to hear that, MD. You might want to check out the current posting on unemployment – this one is almost a year old.

68. geoff - July 8, 2010

Oh – and we’d prefer it if you’d only write original comments here. Don’t spam our threads with cut-and-pastes from other threads, please.

69. daveintexas - July 8, 2010

Livid you say?

Goodness gracious.

70. Cathy - July 8, 2010

My heart aches for unemployed in America and their families.

Moving in with family and friends is not that unusual anymore. Working jobs high school kids used to do seems to be the way lots of folks are keeping food on the table. Taking handouts from friends and family, shopping at thrift shops, and getting groceries from food pantries is no longer beneath many folks. WE all know someone who has had to move or make great sacrifices to find a job.

It’s sad to hear this… but it’s happening more and more… and it appears that this is the grand scheme of the current regime. The alternatives that would start to pull us out are simply not in their game plan. It’s sick.

71. Marc - October 7, 2010

Unemployment has truly peaked and now welcome to the world of UNDERemployed. The job market is not making a real comeback, and now jobs can hire two for the price of one with NO benefits and little or no vacation.

72. appetizer dips - September 3, 2014

I’m not sure exactly why but this web site is loading very slow for
me. Is anyone else having this issue or is it a issue on my end?
I’ll check back later on and see if the problem still exists.

73. Retired Geezer - September 3, 2014

I understand that the above comment is spam but to what benefit?

#missing something

74. geoff - September 3, 2014

Spam used to be fawning and sycophantic (Very informative! You explain the issue very well! I want to marry you and have your babies!!), but over the past six months some of them have gotten abusive (Not up to your usual standards! You suck!!).

Hmmmm. Maybe the spam actually reads the blog after all…


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