The Bureau of Labor Statistics released its monthly employment situation report for the month of October this morning. The headline is that the economy added 151,000 jobs, while unemployment held steady at 9.6%.
It all depends on which survey you believe. The BLS bases its “jobs” number on the establishment survey. The unemployment rate comes from its household survey. For October, the two surveys couldn’t disagree more. While the establishment survey says the economy added 151,000 jobs, the household survey says that the economy shed 330,000 jobs.
Here’s some highlights from the household survey:
The number of unemployed persons, at 14.8 million, was little changed
in October. The unemployment rate remained at 9.6 percent and has
been essentially unchanged since May.
The number of long-term unemployed (those jobless for 27 weeks and
over) was about unchanged over the month at 6.2 million.
Both the civilian labor force participation rate, at 64.5 percent, and
the employment-population ratio, at 58.3 percent, edged down over the
About 2.6 million persons were marginally attached to the labor force
in October, up from 2.4 million a year earlier.
Among the marginally attached, there were 1.2 million discouraged
workers in October, an increase of 411,000 from a year earlier.
Actually, the news from the houehold survey is worse than indicated. If the unemployment rate held steady because discouraged workers re-entered the work force at the same rate that jobs were added, that would be one thing. But the opposite happened. The employment level actually fell, and the unemployment rate held steady only by virtue of the fact that the labor force contracted too. (The government’s trusty, oft-used gimmick for holding down the unemployment rate.)
Here’s my spreadsheet with the government calculation of unemployment and my more realistic calculation, which holds the labor force at a fixed percentage of the population:
And here are the charts of that data:
As you can see, using the more realistic methods of calculating unemployment (U3a and U6a), U3a unemployment has risen to 11.8% in October from 11.5% in September – very close to its recession high of 12% in December of ’09. U6a unemployment rose to 21.0%.
The employment level fell to its lowest level since February. Per capita employment (employment level divided by the population) fell to its lowest level since December of ’09, when it reached its lowest level of the recession.
The addition of 151,000 jobs reported in the establishment survey breaks down as follows:
- Professional & business services temporary help: + 35,000
- Retail: + 28,000
- Food services & drinking place employment: + 24,000
- Health care: + 24,000
- Computer systems design & related services: + 8,000
- Mining: + 8,000
- U.S. census workers: – 5,000
- Manufacturing: – 7,000
- Local government: – 14,000
- Arts, entertainment & recreation: – 26,000
This is the 3rd consecutive month that manufacturing has failed to add jobs – a very bad sign that the president’s plan to boost the economy by doubling exports is failing.
This doesn’t even come close to totaling 151,000 jobs. There’s no explanation of the discrepancy in the report.
Though the headline numbers looked rosy this morning, the picture is grim and getting worse when you delve into the details.