July Unemployment August 7, 2009
Posted by geoff in News.trackback
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:*
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?
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.
Comments
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Innocent Bystanders 
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].
expect hosannas from the MSM
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?
alien abduction
Where did the rest of the workers go?
Back to Mexico?
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?
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.
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.
422,000 ‘workers’ stayed home last month to eat skittles and play with their unicorns.
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.
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?
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.
I haz kookt teh books.
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.
You could overlay what the actual number is, taking into consideration those who “left the workforce”. Triangles would be great for that.
Where did the rest of the workers go?
Easy. They are being paid under the table by insurance companies to disrupt town hall meetings.
How many government sector jobs were increased this month?
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.
How many government sector jobs were increased this month?
See Comment #10.
I think they were put on The List and sent to the camps.
If that were true, you would be in a camp.
I can’t wait to see official White House response to this. What will be the magical “jobs saved” number this time around?
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.
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.
>>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.
The Won has already claimed victory for saving the economy!
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.
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.
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.
Fuck me then. Sheeit.
hahahahahaha
Fuck me then. Sheeit.
Weenie. I didn’t even get to part about the Storms of Oppressive Regulation.
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%
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.
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.
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.
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.
[…] for the result, so without further ado I present you with the Infamous Obama Unemployment Graph for the month of July Wow, do you guys see that? Unemployment went down a whole 0.1% from last month! Happy days are […]
Glad to hear things got better for your kid Michael.
Thanks Dave. It’s been a worry for us.
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.
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.
That’s good. Glad she found a spot. It’s ugly out there.
Thanks, Peel.
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.
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.
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
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.
Brewster, my congrats to the graduate.
Wipe your eyes now.
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.
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.
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.
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.
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
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?
Calculated Risk. Probably the best graphic/numbers site of the econ blogs. Sorry for lingo.
Steve
[…] accuse the President of conducting class warfare on the economy, but they have stayed on strictly technocratic and moral grounds. The fact that everyone but the President’s most ardent supporters, and even […]
[…] here – The post and comments discuss what happened to the missing workers – for whatever […]
[…] my head, there’s this one, the infamous guesstimate that the stimulus would keep unemployment under eight percent, and the Cash for Clunkers funding that was supposed to last three months and ran out in a week. In […]
[…] of my head, there’s this one, the infamous guesstimate that the stimulus would keep unemployment under eight percent, and the Cash for Clunkers funding that was supposed to last three months and ran out in a week. In […]
[…] of my head, there’s this one, the infamous guesstimate that the stimulus would keep unemployment under eight percent, and the Cash for Clunkers funding that was supposed to last three months and ran out in a week. In […]
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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!!!!!!
Sorry to hear that, MD. You might want to check out the current posting on unemployment – this one is almost a year old.
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.
Livid you say?
Goodness gracious.
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.
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.
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.
I understand that the above comment is spam but to what benefit?
#missing something
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…