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Monday, August 6, 2012

More BS from the BLS on Unemployment ?

Apparently, yes, in terms of the BLS' Payroll Report.

To be more polite, Michael Shedlock argues that the latest 'Jobs Report Looks Awful Below the Surface', in FINANCIAL SENSE, emphasizing the gloomy data in the Bureau's Household Survey versus those in the Payroll Survey Establishment Report.  Excerpts from Shedlock post follow.

For a somewhat contrasting view, check out John Cassidy's NEW YORKER post, 'The Jobs Mirage and the Election'.
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On the surface, this was the third consecutive solid jobs report, not as measured by the typical recovery, but the best back-to-back reports we have seen for years. The Payroll Survey Establishment Data showed employment up by 244,000.

At that pace of hiring, the unemployment number would ordinarily drop, but not fast.

Instead, the unemployment rate ticked up. The reason is beneath the surface, employment fell by 190,000 according to the Household Survey.

According to the Household Survey, the number of unemployed rose by 205,000. Another 131,000 dropped out of the labor force or the unemployment rate would have been even higher.

In January alone, a whopping 319,000 people dropped out of the workforce. In February another 87,000 people dropped out of the labor force. In March 11,000 people dropped out of the labor force. In April, 131,000 dropped out of the labor force. The 4-month total for 2011 is 548,000 people dropped out of the labor force.

Many of those millions who dropped out of the workforce would start looking if they thought jobs were available. Indeed, in a 2-year old recovery, the labor force should be rising sharply as those who stopped looking for jobs, once again started looking. Instead, an additional 548,000 people dropped out of the labor force in the first four months of the year.

Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

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