As reported by the Bureau of Labor Statistics (BLS) on Friday in its monthly “Employment Situation” report, another 315,000 workers mysteriously vanished from the labor force in November or, as the BLS chooses to explain, they simply gave up looking for work. The result of the supposed big decrease in the labor force was an even larger decline in unemployment, which fell in November t0 8.6% from 9.0% in October. (See the above link to the report.) Within the report, the BLS concedes that:
The civilian labor force participation rate declined by 0.2 percentage point to 64.0 percent. The employment-population ratio, at 58.5 percent, changed little.
Actually, thanks to a nice gain in the employment level in the household survey, per capita employment grew in November for the fourth month in a row and for the 15th time in the last 24 months. Even so, per capita employment remains stuck at the same level as at the start of that 24-month stretch. Here’s the chart:
The number of unemployed also fell for the fourth straight month, but remains near the worst level of the recession:
And, as you can see, the employment level has risen nicely, by nearly 2.8 million, since the worst level reached in December, 2009:
Unfortunately, during the same time frame, the population grew by six million. So the net result is, as the BLS noted, “… the employment/population ratio changed little,” in spite of the supposed big drop in unemployment from 10% in December, 2009 to 8.6% today. So the gap between the government’s U3 calculation and my own U3a calculation of unemployment is near the worst level of the recession:
If President Obama has been smart enough to restrain the growth in the population through cuts in immigration, he’d now be talking about a real, significant drop in unemployment – one that actually feels like an improved economy – instead of one that’s been trumped up by proclaiming that millions have simply given up looking for work. What a crock.
Here’s my spreadsheet with the raw data and unemployment calculations:
When all is said and done, Friday’s unemployment report is nothing more than further confirmation of the “New Normal” economy of high unemployment.
* * * * *
The gain of 120,000 jobs reported by the BLS from its establishment survey breaks down as follows:
Retail: + 50,000
Professional & business services: + 33,000
Leisure and hospitality: + 22,000 (a gain of 33,000 in food services and drinking establishments and a loss of 12,000 in motels/hotels)
health care: + 17,000
Manufacturing: no change
Construction: no change
Government: – 5,000 (postal workers)
The bubble in health care spending and employment continues to grow, a bubble sure to burst when future cuts in Medicare and Medicaid begin to bite.
Also, for a president committed to growing the economy through an export-driven growth in manufacturing, the continued flat employment in manufacturing isn’t good news.
Note that, at the bottom of the report, revisions are expected next month that will make it impossible to compare new reports of unemployment to the old ones. I expect that this will mean an unusual drop in unemployment next month too.