Unemployment numbers and statistics

Every American would be helped by reading Darrell Huff’s 1954 classic, How to Lie with Statistics. While mainstream media spins numbers, how many people look deeper and understand the number games? The latest employment numbers is an easy example.

The Media: Math Is Obviously Not “Job One”

Do j-school students even have to take ONE math class anymore? The “reporting” on today’s new jobs numbers is just plain embarrassing.

  • U.S. Adds 146,000 Jobs; Jobless Rate Falls to 7.7% – NY Times
  • JOBLESS RATE HITS 4-YEAR LOW – MSNBC
  • Economy adds 146K jobs in Nov., jobless rate drops – CBS

Yes, it is true that 146,000 jobs were created in November, using the Bureau of Labor Statistics numbers… but—there are other numbers that were released today, too. You tell me if the headlines above tell the “Natural Truth:”

The percentage of working-age Americans in the workforce DROPPED in November to 63.6%. The number of adults [counted] in the labor force dropped by 540,000 in November. If the same number of workers were out looking for jobs today as when President Obama took office, the unemployment rate would be 10.7 percent, not 7.7 percent….

Since June, there have been just 847,000 new jobs created overall (at this point in the Reagan recovery, we were creating 800,000 each month). But 621,000 of those jobs—73 percent—were government jobs. [According to BLS figures, also reported here, which appear to differ from the BLS news release.]

While the media put a positive spin on the official November estimated job growth figure of 146,000 jobs, without putting that number into context, it might sound like a lot to a credulous public.

  • These prediction figures are always later corrected, usually downward, as more complete numbers come in. Remember how the September reports of falling jobless claims hadn’t included California, the most populous and economically depressed state?  So, this past Friday, the Bureau of Labor Statistics (BLS) also issued revised numbers for the payroll gains that had been reported for October and September —  down from 171,000 to 138,000 in October and 148,000 to 132,000 for September. November figures will be corrected in January, but probably won’t make headlines, either.
  • Remember, a certain number of jobs are needed every month simply to keep up with the population growth and the number of people in the workforce. (So this figure can also be manipulated lower by not counting everyone in the labor force.) To put those 132,000 to 138,000 new jobs into perspective, the Economist Populist estimated that the number of jobs realistically needed each month, just to maintain, at about 127,000 to 186,000. Official job growth numbers aren’t even keeping up with the population.
  • Most of the civilian job growth came from low-paying jobs in retail (53,000 jobs), and temporary jobs rose by 18,000.

Since December of 2007, the Economist Populist documented that the number of jobs officially lost in the United States is now “down” to 4.13 million jobs. Job growth has remained relatively flat for the last two years, and is not nearly fast enough to employ the tens of millions who are unemployed and need a good job.

How many people are unemployed?  The news reported that the unemployment rate has dropped to 7.7%, but definitions are everything. This figure is the BLS “U-3 Total,” the percentage of the officially recognized labor force that is unemployed. These numbers don’t count people who have been looking for work in the past year (those “marginally attached to the labor force”) or have become discouraged.  Those are reflected in the “U-5 Totals” report — which was 9.2% for November.

Nor does that 7.7% include those people in the U-5 totals, plus the underemployed who took part-time jobs for economic reasons. According to the BLS, 8.2 million Americans remain “involuntary part-time workers,” working part-time because their hours had been cut back or because they were unable to find a full-time job. The official figures for those who are unemployed or involuntarily underemployed in part-time work, are in the “U-6 Totals” report — which was 14.4% for November.

Even the U-6 report, though, leaves out people wanting a job and not considered part of the labor force, according to the Economist Populist. The CPS survey of people not counted in official unemployment statistics and official unemployment rate who want a job, for example, increased 230,000 from last month and currently stands at more than 6.8 million people. More disturbingly, the average length of time people have been unemployed is 40 weeks.

Long-term employment figures most reflect the current job crisis. This past June, CBS News reported that according to Congressional Research Service data, long-term unemployment rates were the highest since the Great Depression. A stunning 45.1 percent of all unemployed workers in this country had been jobless for more than six months, compared to about 31% at the end of the Great Depression in 1937.

As of October, official numbers said 4.9 million Americans had been unemployed for more than six months and 3.6 million had been out of work for more than a year. “Long term unemployment remains at levels not seen since the Great Depression,” Paul Krugman wrote last week in the New York Times.

The Pew Charitable Trust analysis of long-term unemployment, based on Basic Monthly CPS public data from the BLS and the U.S. Census Bureau, reported that the percentage of jobless workers unemployed for a year or more during the first quarter of 2012 was 29.5% — more than triple the 9.5% rate during the first quarter of the 2008 recession. Long-term unemployment for older workers continues to worsen, and once a worker becomes unemployed, long-term joblessness is fairly evenly distributed across all education levels, every industry and occupation.

The figures least apt to be manipulated and to most accurately reflect the full employment picture is the total number of adults participating in the labor force as a percentage of the working age population. According to the BLS reports, there are 244 million Americans of working age (and not in prisons, mental hospitals or nursing  homes). Of that total, 143 million have jobs. That means, about 59% of Americans have some type of job and another 41% don’t. The Phoenix Business Journal dug deeper, bringing in a historical perspective:

Record 89 million Americans not in the job market; even more unemployed or not Looking

A record 89.2 million Americans are not in the labor force or job market, according to November employment data released by the federal government. That figure combined with the 12 million workers counted in the official U.S. unemployment tally translates into 41 percent of the U.S. civilian population over the age of 16 being without a job. That 89.2 million figure is the highest on record…

As Darrell Huff’s book cautions, statistics are rife with opportunities for misuse, from “gee-whiz graphs” that add nonexistent drama to trends, to results that do not mean what people think they do, to statistics implying false cause-and-effect reasoning. “Even if you can’t find a source of demonstrable bias, allow yourself some degree of skepticism about the results as long as there is a possibility of bias somewhere,” he wrote. “There always is.”

Numbers can also never tell the human side of the story. “Behind every data point on this line is a real live person, with ability, skills, promise, knowledge and capability who desperately needs someone to hire them,” wrote Robert Oak in the Economist Populist. If you’re among those of us wasting away looking for a job — normal, hard working people, with years of experience, skills, education and currently unemployed for years — understand that you are not alone and no amount of positive spin can change facts.

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15 responses to “Unemployment numbers and statistics

  1. If you believe that there were 613,000 government jobs created since June of this year, there is absolutely no helping you. Where do you find these kind of numbers? They are completely false.

    • did you even bother going to the link or the BLS ? nope ? moron … even if you are right you haven’t even tried to prove it …

      • While Chris may have commented a bit more collegially, he helped to point out that apparently faulty sentence in the linked news story. Anyone can occasionally miss things no matter how hard they work to be accurate and go to original sources. But this shouldn’t distract us from the real issues….

        • What is faulty about the sentance?
          “Since June, there have been just 847,000 new jobs created overall ”

          Lets see, we have been doing about 140K per month – June, July August, Sept, Oct, Nov is 6 months My Napkin math gets me 840K – I don’t know seems reasonable.

          • Even I made a mistake – the 860K people is from the last 6 months – 3/4 of those have been public sector jobs. The 860K is reasonable for 6 months (about 140K per month, ) and the public sector jobs also seems reasonable @ 3/4 of the total.

            I still don’t understand the complaint.

  2. You may follow the link noted at the end of that opening article that are probably the source the reporter used, and another from a BLS press release, which shows BLS figures that appear contradictory. There is no debate, however, that there is significant employment in the government sector, approximately 22 million workers, and that the lowest unemployment rates (5.7%) are found among government workers (BLS Table A-14). The overall point of the article, however, is not to debate the number of government employees but to show the overall job picture. Hope that helps.

  3. Obama Says No to Oil Leases, But Yes to Windmills, Off the Atlantic Coast

    December 3, 2012

    (CNSNews.com) – President Obama’s plan for the Outer Continental Shelf does not include any new oil and gas leases in the Atlantic Ocean over the next five years, but it does include windmills.

    http://cnsnews.com/news/article/obama-says-no-oil-leases-yes-windmills-atlantic-coast

  4. “There are three kinds of lies: lies, damned lies, and statistics.” Disraeli.

    “He used statistics as a drunken man uses lampposts; for support rather than illumination.” Andrew Lang.

  5. For the long-term unemployed in this “market,”(45% of those considered unemployed and not the much larger number already dropped out of the market) not only are they less likely to be considered for employment in any circumstance, they are losing those skills and abilities at a rapid pace. And those that do get employment are back to undermeployment taking entry level jobs from the young.

    That 7.7% number is horrendous. Yet the media would be pushing a Nobel Prize in Economics on Obama if he could just come within a percentage point of Bush’s jobless recovery they campaigned against in 2004.

  6. I’ve had a few stats classes but I’m a low-level statistician. That puts me miles ahead of most people. I am always appalled when I see the data tortured until it confesses (don’t remember who said that first).
    It is likely that US job participation would be declining somewhat because of a demographic shift. We have fewer young people as a percentage of our population, considerably fewer, and more people are aging out of the working population. The job market is still poor and “progressive” policies make it worse, but the participation rate is only one significant measure of several and the participation rate responds to several factors, including demographic changes.

    • By all government reports, the total US population (as well as those of working age) has been steadily increasing (9.78% to 13.37% per decade) and is expected to for decades to come. Immigration appears to be playing a significant role.For example, see:

      http://www.censusscope.org/us/chart_popl.html

      The latest Pew population projections study found that while, as a percentage, older people in the population have been increasing, the total numbers of working-age people in the country have steadily increased and is expected to continue to grow considerably higher. “The working-age population—adults ages 18 to 64—will reach 255 million in 2050, up from 186 million in 2005.”
      Link:

      http://www.pewhispanic.org/files/reports/85.pdf

      • Howdy Sandy
        Gosh knows I’m not defending the current Administration’s economic acumen. The point that the percentage of people who are out of the work force due to age and, perhaps, changing perceptions of age and retirement, remains valid. When you define working age as 18 to 65, for example, but others define retirement at 60 or 62, you’re going to get some odd results in the numbers.
        The current participation rate is too low for economic health, certainly.

        • If you look closely at the BLS figures, they carefully and consistently define the working age as people 16 to 65 years of age. That dropping figure is based on the PERCENTAGE of the working age population that is not working — not the actual numbers. The percentage of Americans in this age group who are not working has never been higher.

          Interestingly, the Economist Populist carefully examined the claim that dropping unemployment had something to due with an aging workforce and people retiring and found it to be untrue. In fact, people are working well past age 65 as never before. His documentation, based on BLS figures, can be read here: http://www.economicpopulist.org/content/word-labor-participation-rates

          But I agree with you, the economic health of the country is very worrisome.

          • Howdy sandyjfs
            I think we’re saying roughly the same thing. I think some (only a little) of the reduced participation in the 16-65 cohort is that many companies are retiring people at younger ages — 60, 62, even as young as 55. I seem to recall that the UAW has or did have a retirement age of around 55 a few years ago. Some people may have retired according to their company policies or their own resources before turning 65. They would show up as a reduction in participation, and they may be a greater share in recent years because very few 25-year-olds are retired.
            Workforce participation is at a worrisomely low rate — that would be the key point — and a lot of the reduction in participation is among those who would normally be most productive.

  7. None of these unemployment statistics matter. The country is going through a massive expansion of debt! The debt is what is going to destroy, annihilate, the US economy. When you spend more than you can possibly take in, your are criminal. The US debt problem is worse than the banking crisis. The media blamed bankers for spending more than they have, for making bad loans. Yet the media supported Obama doing the same thing at a greater level. What is the root cause of this mess? The US media is now less of a watchdog of government, less honest than China’s media! Statistics are good and can be used to analyze complex processes. But when they are reported to the people with bias, incompetence, and corruption, everyone loses.

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