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Fri Sep 7, 2012, 08:33 AM

August payroll employment rises (+96,000); unemployment rate edges down (8.1%)

Last edited Fri Sep 7, 2012, 09:05 AM - Edit history (1)

Source: U.S. Bureau of Labor Statistics

THE EMPLOYMENT SITUATION -- AUGUST 2012


Total nonfarm payroll employment rose by 96,000 in August, and the unemployment
rate edged down to 8.1 percent, the U.S. Bureau of Labor Statistics reported today.
Employment increased in food services and drinking places, in professional and
technical services, and in health care.

Household Survey Data

The unemployment rate edged down in August to 8.1 percent. Since the beginning of
this year, the rate has held in a narrow range of 8.1 to 8.3 percent. The number of
unemployed persons, at 12.5 million, was little changed in August. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men (7.6 percent),
adult women (7.3 percent), teenagers (24.6 percent), whites (7.2 percent), blacks
(14.1 percent), and Hispanics (10.2 percent) showed little or no change in August.
The jobless rate for Asians was 5.9 percent (not seasonally adjusted), little
changed from a year earlier. (See tables A-1, A-2, and A-3.)
....

The change in total nonfarm payroll employment for June was revised from +64,000 to
+45,000, and the change for July was revised from +163,000 to +141,000.

Read more: http://www.bls.gov/news.release/empsit.nr0.htm



An increase of 96,000 is really lackluster. It's not just lackluster, but, as the first response says, "disappointing." It's half the ADP estimate. Here is a quote from yesterday's ADP news release:

August 2012 Report

Employment in the U.S. nonfarm private business sector increased by 201,000 from July to August, on a seasonally adjusted basis. The estimated gain from June to July was revised up from the initial estimate of 163,000 to 173,000. Employment in the private, service-providing sector expanded 185,000 in August, up from 156,000 in July. Employment in the private, goods-producing sector added 16,000 jobs in August. Manufacturing employment rose 3,000, following an increase of 6,000 in July.


Not only that, but BLS's estimates for increases in employment for June and July were lowered too. (Hat tip to Reuters and Hissyspit.)

At any rate, good morning, Freepers and DUers alike. I especially welcome viewers from across the aisle. You're paying for this information too, so you ought to see this as much as anyone. Please, everyone, put aside your differences long enough to digest the information. After that, you can engage in your usual donnybrook.

What is important about these statistics is not so much this month’s number, but the trend. So let’s look at some earlier numbers. We’ll start with the ADP estimate.

ADP, for employment in August:

http://www.democraticunderground.com/1014220380
The ADP National Employment Report August 2012

BLS, for employment in July:

http://www.democraticunderground.com/1014184289
July payroll employment rises (+163,000); jobless rate essentially unchanged (8.3%)

ADP, for employment in July:

http://www.democraticunderground.com/1014182590
The ADP National Employment Report July 2012

BLS, for employment in June:

http://www.democraticunderground.com/1014160067
Payroll employment continues to edge up in June (+80,000); jobless rate unchanged (8.2%)

Of particular importance for the BLS estimate for June was this article from that day’s Wall Street Journal.

Unemployment Line Longer Than It Looks‎

AHEAD OF THE TAPE
Updated July 5, 2012, 7:26 p.m. ET

By SPENCER JAKAB Here is a statistic for the politically inclined: No incumbent president has won re-election with an unemployment rate above 7.2% since the Great Depression.

Economists expect Friday's release of June employment data will show 95,000 new jobs added. Meantime, the unemployment rate is seen unchanged at 8.2%. That may be bittersweet or just plain bitter depending on one's political slant, but it is difficult to reconcile today's rate with past periods.

The headline unemployment rate has been flattered by the number of people no longer counted in the denominator used to calculate it. For example, a comparison of jobs data between the start and end of 2011 shows the ranks of the unemployed fell by 822,000 while the number of people not in the labor force grew by a larger 1.24 million. The unemployment rate fell by 0.6 percentage points over that time to 8.5%.

In fact, the participation rate—the share of the working-age population either working or looking for work—has fallen by 2.3 percentage points over the four years through May to 63.8%, a three-decade low. Nearly 88 million people—about seven times the ranks of the officially unemployed—aren't part of the headline rate's calculation.


Hmmm. Give that some thought. Also, when May'’s figures were released, Judson Phillips of Tea Party Nation was on Tom Hartmann that Friday night. He kept referring to the "U-6 Number." That can be found in Table A15. It is "Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force." It appears in two forms, seasonally adjusted and non-seasonally adjusted. Either way, it is the least optimistic of all the estimates.

Thanks to DUer alp227, you can watch Judson Phillips’s appearance on Tom Hartmannn here: http://www.democraticunderground.com/1014184289#post12

ADP, for employment in June:

ADP jobs up 176,000 (for June)

BLS, for employment in May:

http://www.democraticunderground.com/1014133487
May payroll employment changes little (+69,000); jobless rate essentially unchanged (8.2%)

ADP, for employment in May:

http://www.democraticunderground.com/1014132307
May change in employment +133,000

BLS, for employment in April:

http://www.democraticunderground.com/1014113023
Payroll employment rises 115,000 in April; unemployment rate changes little (8.1%)

ADP and Gallup, for employment in April:

There were four related threads about the April jobs estimate at DU already. Three are in General Discussion, and they are based on the figures from ADP. The fourth, in LBN, paints a contrasting picture. It relies on the figures from Gallup.

http://www.democraticunderground.com/1002635553
Per CNBC - ADP Numbers bad, posted by Laura PourMeADrink

http://www.democraticunderground.com/1002635507
BAD: ADP JOBS REPORT MISSES EXPECTATIONS BY A MILE, posted by xchrom

http://www.democraticunderground.com/1002635837
ADP & TrimTabs Showing Much Weaker Payrolls Ahead of Unemployment Report, posted by marmar

http://www.democraticunderground.com/1014111465
U.S. Job Creation Nears Four-Year High, posted by brooklynite

There's a joke about economists in there somewhere.

March, BLS:

Payroll employment rises 120,000 in March; unemployment rate changes little (8.2%)
March, ADP:

Businesses Adding 209,000 New Jobs Last Month Fail To Ignite Market Rally

February, ADP:

ADP Estimates U.S. Companies Added 216,000 Jobs in February, posted by Gruntled Old Man

One more thing:

So how many jobs must be created every month to have an effect on the unemployment rate? There's an app for that.

http://www.frbatlanta.org/chcs/calculator/index.cfm
Federal Reserve Bank of Atlanta Jobs Calculator™

Well, enough of that. On with the show.

Monthly Employment Reports

The large print giveth, and the fine print taketh away.

A DU'er pointed out several months ago that, if I'm going to post the link to the press release, I should include the link to all the tables that provide additional ways of examining the data. Specifically, I should post a link to "Table A-15. Alternative measures of labor underutilization." Table A-15 includes those who are not considered unemployed, on the grounds that they have become discouraged about the prospects of finding a job and have given up looking. Here are those links.

Employment Situation

Table A-15. Alternative measures of labor underutilization

From the February 10, 2011, "DOL Newsletter":

Take Three

Secretary Solis answers three questions about how the Bureau of Labor Statistics calculates unemployment rates.

How does BLS determine the unemployment rate and the number of jobs that were added each month?

BLS uses two different surveys to get these numbers. The "household survey," or Current Population Survey (CPS), involves asking people, from about 60,000 households, a series of questions to assess each person in the household's activities including work and searching for work. Their responses give us the unemployment rate. The "establishment survey," or Current Employment Statistics (CES), surveys 140,000 employers about how many people they have on their payrolls. These results determine the number of jobs being added or lost.

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Reply August payroll employment rises (+96,000); unemployment rate edges down (8.1%) (Original post)
mahatmakanejeeves Sep 2012 OP
davidpdx Sep 2012 #1
docgee Sep 2012 #2
Igel Sep 2012 #6
docgee Sep 2012 #8
rtracey Sep 2012 #3
Purveyor Sep 2012 #4
mahatmakanejeeves Sep 2012 #5
Igel Sep 2012 #7

Response to mahatmakanejeeves (Original post)

Fri Sep 7, 2012, 08:37 AM

1. That's disappointing

I was hoping for more.

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Response to mahatmakanejeeves (Original post)

Fri Sep 7, 2012, 08:44 AM

2. Only 0.3 more and Obama will not have a net job loss...

Hope next month is better.

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Response to docgee (Reply #2)

Sat Sep 8, 2012, 12:59 PM

6. Is that just private or overall numbers?

Does it take into account population growth?

And is that really the right kind of number, the right place to counting?

That means we say something like this: "From 1/21/2009 to the present, we have 0 job loss in just the private sector. Yes, unemployment is at 8.1%, and those marginally attached to the workforce who are unemployed total 16%, and if you include population growth and those who have never been in the workforce or who have long given up on the workforce, unemployment is over 20%. But what's really important isn't how many people are unemployed, how many people are underemployed, but that our guy has no net job loss, and it's only taken $4 trillion in debt and 3.8 years to do it in. The real recovery isn't from the recession and what's important isn't how the country is doing; the real recovery is just what shows up on our guy's gain and loss sheet and what's good for him and Party!"

Party should never be a substitute for country, and "leader" should never be a substitute for "populace."




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Response to Igel (Reply #6)

Sun Sep 9, 2012, 05:46 PM

8. A good party is a good substitute for just about anything, dude!

I, perhaps shallow minded, was just thinking It would be good to shut down one argument from tea bagger types as in "above 8% unemployment for weeks" that you hear so much. So yes, it seems to matter.

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Response to mahatmakanejeeves (Original post)

Fri Sep 7, 2012, 08:56 AM

3. BS

And you're telling me ADP was off by more the 100,000 jobs. It sounds like a crook of shit to me. I think it was a rigged quotation.

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Response to mahatmakanejeeves (Original post)

Fri Sep 7, 2012, 09:04 AM

4. Damn. Just damn... eom

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Response to mahatmakanejeeves (Original post)

Fri Sep 7, 2012, 01:17 PM

5. Why August’s jobs number is likely wrong

Why August’s jobs number is likely wrong

http://www.washingtonpost.com/business/economy/august-jobs-number-is-likely-wrong-and-a-puzzle-for-politics/2012/09/07/f7f3c31c-f85d-11e1-8398-0327ab83ab91_story.html

By Zachary A. Goldfarb, Updated: Friday, September 7, 12:22 PM
The Washington Post

The news that the economy added just 96,000 jobs in August will be hotly debated by both sides in remaining weeks of the presidential campaign, but one thing is almost certain: The number is wrong.

Only once in the past three decades has the government not revised its estimate of how many jobs were created in a given month. It usually takes many weeks, and sometimes years, before economists settle on the most accurate figure.

Over the past three years, the employment report has understated how many jobs were created by as much as 99,000 and overstated it by as much as 86,000. The nation dwells on the number when it comes out, but nobody pays attention when the number is updated.

Although the figure released Friday morning is highly unlikely to be correct, it does confirm a trend of tepid job growth and suggests that the economy is neither collapsing nor growing vigorously. But history may reassess how much of a setback the disappointing figure was for President Obama.

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Response to mahatmakanejeeves (Reply #5)

Sat Sep 8, 2012, 01:09 PM

7. There's "wrong" and there's wrong.

Saying that the numbers could be -99k to +86k says little. What are the frequencies of each? How likely is this to be wrong by more than 5-10k?

It's incorrect if the number reported was 96,000 and the "true" number turns out to be 95,400. It's a trivial correction though, making it's inaccuracy trivial.

And people do look at the corrections, although that depends on who's doing the punditing. If the number's low and the commentator wants it higher, he'll certainly add, "But last week's numbers were revised upward". If it's not a trivial amount, he'll add the figure, "But last week's numbers were revised upwards by 12k jobs." Mut. mut. for those who would, for political reasons, want the numbers lower. (Mut. mut. is for "mutatis mutandis," making the necessary changes to what's been said to make the new utterance true.)

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