"400,000" is, somewhat, a magic number. Of the past 170 weeks since the recession began, new claims for unemployment benefits have been at 400,000 or higher for a total of 157 of those weeks. That's thirteen weeks of somewhat good news. The trend has been "downward" since March of 2009, but, needs to be consistently reported at 380,000 or less before "job growth" occurs. At least, that is what the experts tell us.
In November of this year, three of those "good news" weeks, were recorded. Week #1 of November was 398.000 but was later adjusted up to an even 400,000. Week #2 was 396,000 (adjusted); week # 3 was 393,000 (adjusted). Most of us expected week #4 (ending with November 26) to be under 390,000. I personally thought it would be closer to 380,000. It wasn't. It came in at 402,000 and will be adjusted up to 404,000 or higher by next Thursday. The weekly reports are always [initially] on the low side.
Understand that "400,000" is the number of new applications for unemployment benefits. . . . . new applications . . . . . . . folks just laid off work . . . . . . . . . 400,000 (or so) in one week . . . . . . more than 1.6 million per month.
By contrast, we have been told over and over again, that the economy is adding somewhere around 340,000 per week - offsetting much of that negative 400,000 number. As mentioned above, if and when the weekly "new claims" report comes down to 380,000 on average, the jobs report will show growth.
OK, fine. But there is a problem.
At no time during this recession, have we seen new [weekly] claims at 380,000 or less, yet we have a startling .4% decrease in the monthly unemployment numbers . . . . . . . . . 8.6% down from last months 9.0%.
How can this be?
Here is the "rest of the story" . . . . . . . and we are still going to have a problem.
Lets begin with this fact: a .4% drop in the unemployment percentage pencils out to 612,000 people no longer on the unemployment roles. Did the economy create 612,000 new jobs last month (November) ? I don't think so.
So, here is what we have:
Fact #1 : the Labor department [also] tells us that 315,000 folks dropped out of the labor force and are no longer looking for work. You have to be officially "looking" to be counted. This "315,000" figure is part of that 612,000 total.
Fact #2: 1% of the labor force is 153,000 people (obviously, the work force is 153 million strong).
Fact #3: as mentioned above, if unemployment dropped by .4%, we are looking for 612,000 new work related positions, (4 x 153,000), but the D of Labor tells us that a net of only 120,000 jobs were created.
Fact#4: 315,000 people have dropped off the roles. Another 120,000 found jobs. That leaves us with 177,000 people to account for with this 8.6% number.
177,000 people are missing from the current report !!
Maybe that is why no one is making "a big deal" about this morning's news. Usually, Obama would have scheduled a press conference by this time of day. Nothing. The folks at CNN mentioned the new numbers, this morning, and it is a good report, but no one is over excited.
Anyway, there is something wrong with this 8.6% report. Understand that if we do not count the 315,000 who have given up, the monthly employment number might be 8.9% but no lower.
Know that "unemployment" is one of the repeated themes of this blog. Look for more information on this matter. An "update" is just hours away !!
Here's hoping you are part of the "8.6%", but, someone is playing games.
Important note: you will hear much about the positive growth numbers in the private sector. Obama has bragged about private sector growth for well over a year, now, as if he has something to do with that growth. Understand that you do not have an accurate picture of the jobs report by simply looking at "jobs created," whether in the private sector or not. Obama and his Democrat henchmen, today, will talk about "260,000 private sector jobs created" but will never get around to the Department of Labor's report of 120,000 jobs. You see, the jobs report is kind of like looking at a nickle; there is a head and a tail on that coin. "Jobs created" IS ALWAYS offset by "jobs lost." Like the heads and tails of a nickle, the two cannot be separated. Obama is all about smoke and mirrors. I stand on the fact that there is something seriously out of whack with this current Labor report. In time, we will see that issue work itself out. Remember: reality always trumps fantasy.
End notes:
Related stories:
Nov. labor participation rate: 64%...
Understand that with the "headline" percentage, a total of 36% of the labor force is not working and may or may not be counted into any employment numbers. Understand that 1% of the force equals 153,000 people. You do the math. It will scare the blazes out you.
315,000 Americans leave work force...
YESTERDAY: Jobless claims top 400K...
Labor Department stats (we show the .4% equal to 612,000 which is different from the 594,000 total in the Labor report. Just more confusion.)
Update (12:47 pm 12/2/11)
The Atlantic sees the same problems I do.
"This was a very confusing report. The unemployment rate fell dramatically in November. But we're only adding 120,000 jobs a month. How can both things be true at the same time?"
No comments:
Post a Comment