500,000 American Workers Go Missing in January


According to figures released by the Bureau of Labor Statistics (BLS) this morning (link to the report provided above), it seems that over 500,000 American workers went missing in January.  This is on top of the nearly 1.3 million that had previously vanished since May of 2009.  Nevertheless, the BLS managed to find a silver lining in this story, noting that fewer people seeking work translates into lower unemployment, which fell from 9.4% in December to 9.0% in January. 

But local authorities have grown concerned.  Sniffer dogs have been sighted behind unemployment offices and one can only speculate that they are searching for rumored mass graves of people who have vanished from the unemployment lines.  Layed off workers would be well-advised to avoid the unemployment office until the plight of the missing workers has been determined.

Seriously, folks, does the BLS really expect anyone to believe this morning’s report?  A half million people gave up looking for work?  Have they found some magical way to live without a source of income?  The last I heard, there were only two people who shared in the big mega-millions jackpot in January.  What happened to the other 499,998 people? 

No one will be fooled by this morning’s report.  The jobs data was horrendous.  Instead of the expected 140,000 new jobs, non-farm payrolls added only 36,000.  This is almost 100,000 below the number needed just to keep pace with the growth in the labor force.  So, once again, the government had to come up with some gimmick to gloss over the ugliness of this report, and once again it resorted to the “mysteriously vanishing labor force” trick. 

To be fair, there is a glimmer of good news in the report.  The employment level rose by 117,000 – almost enough to match the growth in the labor force.  For that reason, real unemployment – not the BS number conjured up by the BLS – remained virtually unchanged at 11.8%.  And the more inclusive measure of unemployment – U6a – (which factors in the 1.8 million workers buried in mass graves behind the unemployment offices) – remains unchanged at 21.0%.  And the number of unemployed Americans remains just below its recession peak of 18.9 million workers.  And per capita employment remains near its very lowest level of the recession. 

Here’s the calculation, followed by charts of the data:

Unemployment Calculation

Unemployment Chart  (Notice how U3 and U6, the government’s measures of unemployment, have turned down sharply in the last two months while U3a and U6a, the “un-fudged” versions of the same calculations, have unemployment virtually unchanged in that period.)

Labor Force & Employment Level  (Notice how the red line – the government’s estimation of the labor force – has been trending downward while the real labor force, as a function of the growth in the population (represented by the yellow line) has been rising steadily.)

Unemployed Americans     Per Capita Employment

The reported gain of 36,000 jobs (a figure arrived at from the BLS’s establishment survey) breaks down as follows:

  • Manufacturing:  + 49,000
  • Retail:  + 28,000
  • Health care:  + 11,000
  • Transportation & warehousing:  – 38,000
  • Construction:  – 22,000
  • Professional & business services (temp help):  -11,000

The jump in manufacturing jobs is indeed good news, since this is precisely the sector of the economy where job losses have been the worst for decades.  But I have my doubts that it’s sustainable.  Time will tell. 

Contraction in the last category – “temp help” – is bad news, since analysts have been pointing to growth in that figure over the last few months as a predictor of growth in permanent employment in the future. 

In the meantime, if you’ve recently been laid off, watch your back!

7 Responses to 500,000 American Workers Go Missing in January

  1. ClydeB says:

    This article,

    http://news.yahoo.com/s/ap/20110204/ap_on_bi_go_ec_fi/us_economy ,
    would indicate the AP found your missing workers.

    What a snow job.

    • Pete Murphy says:

      That AP writer claims that unemployment fell because so many people claim they found work. That’s just a blatant lie. It’s not at all how unemployment is calculated. Unemployment fell in January because 500,000 vanished from the work force. If they had found work, they’d have been added to the labor force, not subtracted. That writer is an idiot.

  2. ClydeB says:

    Your explanation fits with my opinion of AP EXACTLY.
    Ignorant idiots.

  3. Mark Hall says:

    I believe that there might be a logical explanation.

    To simplify results and reduce federal spending, effective January 1, 2011, all government agencies involved with data collection and analysis were instructed to round numerical results to the nearest “whole” number.

    As a result, the BLS has been able to eliminate (2) jobs and achieve the administration’s goal of reducing unemployment.

    A WIN!, WIN! for both.

  4. ClydeB says:

    According to a survey by the AARP, approximately seven thousand (7000) baby boomers are reaching 65 every day, and The Alliance for Aging Research organization puts the figure at 11,000.
    At least some are retiring, and I’m confident that at least some of those retiring have meaningful jobs that must be filled. Assuming the jobs are filled by trickle-up from below, sooner or later an entry job should open up.
    A quarter million or more retirees per month is a bunch and should start to show up in the stats. maybe they are and the overall jobs situation is even worse than it looks.

    • Pete Murphy says:

      But I’ve also heard that the percentage of baby boomers who need to keep working is higher than the previous generation. While 250,000 retirees per month is a lot, let’s not forget that new workers are entering the work force at an even greater rate. Approximately 8 million new high school and college graduates and approximately 600,000 new immigrants enter the work force each year. The result is growth in the labor force of about 125-150,000 per month.

  5. Noch tausend Worte…

    […]500,000 American Workers Go Missing in January « "Five Short Blasts" Forum[…]…

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