Thursday, February 3, 2011

January Jobs Report(s) Part II

The official Department of Labor Bureau of Labor Statistics employment numbers for January 2011 are out and guess what? Same shit, different day.

According to the report (via Reuters) the jobs increase for January 2011 is 36K. This is compared to Wednesday's report from ADP (from my post on Wednesday), that the private sector created 187K jobs in January. Since the BLS number includes public sector as well as private sector, it looks like governments at all levels shed approximately 150K jobs. The same thing as happened last month, where the number of private sector jobs was initially reported as 297K (later downgraded to 247K) while the overall number from BLS was 103K.

Of course, what will be reported heavily is that the "unemployment rate" has "dropped" to 9% from 9.4%:

There was some good news in the employment report as the jobless rate fell to 9 percent from 9.4 percent in December. The household survey from which the unemployment rate is derived showed the number of unemployed dropped by about 600,000 last month.

The unemployment rate had previously declined largely as a result of people giving up the search for work, but in January the labor force was unchanged, even after adjustments for updated population controls.
The reality appears to me to be that all the numbers are probably fudged and no one in any position to do anything or comment on it has a clue. As I said, same shit, different day.

Yesterday's Initial Unemployment Claims report, while showing a drop, was still reporting 415K new claims. the spin here is that it was basically back to the status quo since the report last week had spiked so high:
A Labor Department report showed new claims for state jobless benefits fell 42,000 to a seasonally adjusted 415,000, unwinding most of the previous week's weather-induced spike.

Economists had forecast claims dropping to 420,000.

The claims data falls outside the survey period for the closely watched payrolls report for January, due on Friday.

Of course, this information was buried under reports of how fast the services sector of the economy was growing. Somehow, I don't see an increase to the Services Sector as something to cheer about and sustainable for the long haul, but that's just me.

The economics reporters are trying desperately to find good news in all these numbers but when they are providing all the numbers and analyzing them, it becomes a little more difficult to be all positive all the time. (via Yahoo) points out one of the world wide problems, which is youth employment, or the lack thereof.
In Tunisia, the young people who helped bring down a dictator are called hittistes -- French-Arabic slang for those who lean against the wall. Their counterparts in Egypt, who on Feb. 1 forced President Hosni Mubarak to say he won't seek reelection, are the shabab atileen, unemployed youths. The hittistes and shabab have brothers and sisters across the globe. In Britain, they are NEETs -- "not in education, employment, or training." In Japan, they are freeters: an amalgam of the English word freelance and the German word Arbeiter, or worker. Spaniards call them mileuristas, meaning they earn no more than 1,000 euros a month. In the U.S., they're "boomerang" kids who move back home after college because they can't find work. Even fast-growing China, where labor shortages are more common than surpluses, has its "ant tribe" -- recent college graduates who crowd together in cheap flats on the fringes of big cities because they can't find well-paying work.

It is not just young people needing to be absorbed into the work force; it is all the people who have lost their jobs at all ages who want (and need) to be re-absorbed back into the work place. People in their 40s and 50s who are un and underemployed, wish to work but unable to find anything more than minimum wage (if they are lucky).

Floyd Norris of the NY Times keeps trying to paint the numbers as a positive. Yesterday he tried to compare the current jobs picture with 1983:
The unemployment rate declined four-tenths of a percentage point in one month. There had not been a monthly decline that large in many years, but economists were unimpressed. After all, the decline was caused in no small part by a surprising reduction in the labor force, which could be an indication that more workers were discouraged and no longer looking. That would hardly be an encouraging development.


The above describes what happened a month ago, when the unemployment rate for December came in at 9.4 percent. It was the first time in more than 11 years that the rate had declined that much in a single month, but the headline in The Chicago Tribune read, “U.S. jobs picture gets darker; Unemployment rate dips, but only because workers apparently are giving up.”

As it happened, those paragraphs also describe the situation 28 years ago. In January 1983, with President Ronald Reagan reeling from his large setback in the midterm elections the previous November, the unemployment rate fell to 10.4 percent from 10.8 percent. It was the first such decline in five years, but few thought it significant.

Today, Norris is walking things back a bit here (in a discussion with fellow reporter Dave Leonhardt) The discussion is a continuation of one started yesterday but the bottom line is neither of them really have a clue but I think Leonhardt probably is a little closer to reality than Norris is.

The Washington Post offered their pre-report analysis here (with the obligatory positive spin):
There has been plenty of economic data lately pointing to better times ahead. Just this week, a key survey of manufacturers showed the strongest pace of expansion since 2004, and the number of people filing claims for jobless benefits fell sharply.

And the WaPo0 continues their spin efforts by concentrating on the drop in the official Unemployment Rate rather than in the small number of jobs increase as their lede and headline but then admits the reality about half way through their report:
The lower jobless rate requires some statistical parsing. The Bureau of Labor Statistics, as it does every January, updated its estimate of the U.S. population. This year, the bureau estimated that the population fell by 347,000, which caused the proportion of people working to accelerate more than it would have if the population estimate had remained steady.

In theory, a job should not disappear from payrolls because a snowed-in employee can't make it to work for a few days. But employers don't always fill out surveys correctly, and steep declines in employment are frequently reported in months with severe weather. Some 886,000 Americans were unable to work the week of the survey, much more than the 417,000 kept from work by bad weather during a typical January.

Then there is Ben Bernanke admitting the obvious in this article from yesterday (AP via Yahoo) that yes, we need more jobs. He offers no solutions other than to keep doing whatever the Fed is doing but I guess it is a positive just to have him admit the obvious.

So what are we left with? Same shit, different day. Roughly 15 Million unemployed. Roughly 25 to 30 Million un/underemployed/discouraged workers/"independent contractors" and so on. Nearly ten percent of the entire population of the United States being left behind. While bankers such as Jamie Dimon continue to whine that nobody loves them.

And because I can:

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