About the January Jobs Report – Mildly Good News, but Bought at Great Cost

Summary:  Most people focus on the month-to-month changes in the jobs report, which contain a lot of noise.  The 12-month changes are more revealing.  We are in a slow recovery, somewhat faster than in 2010.  We should enjoy it, as it was bought at great cost.

Here we examine the January employment report from the Bureau of Labor Statistics.  They conduct two surveys: one of households, one of businesses.  They are not directly comparable, each giving different perspectives on the US economy.  Today we look at the year-over-year changes in data (not seasonally adjusted).  The picture painted is consistent with the many other streams of information about the economy — effective rebuttal to the cultists who insist all the government data is faked to re-elect Obama or benefit the Trilateral Commission.

The important detail to know about the recovery:  during this period the government’s public debt increased one trillion dollars — almost 7% of GDP (source here), one of the higher fiscal deficits in the world.  Our shiny recovery results from massive borrowing and spending.  Without that we’d be in a deep recession, like Greece.

(1)  Household survey

It shows that we had an OK year, with the number employed growing faster than the civilian non-institutionalized population, but the number not in the labor force grew even faster.

Category January 2011 January 2012 Change Change
Civilian non-inst pop 238,704 242,269 3,565 1.5%
– Civilian labor force 152,536 153,485 949 0.6%
—- Employed 137,599 139,944 2,345 1.7%
—- Unemployed 14,937 13,541 – 1,396 -9.3%
– Not in labor force 86,168 88,784 2,616 3.0%
Full-time 110,373 111,879 1,506 1.4%
Part-time 27,226 28,065 839 3.1%

 

Effective with data for January 2012, updated population estimates which reflect the results of Census 2010 have been used in the household survey; earlier months were not adjusted.  They provide the adjustments so they can be backed out to make the January numbers more comparible with earlier months.  Doing so gives us these results, with employment growth slower — but much slower growth in those not in the labor force:

Category 2011 Adjustment New 2011 2012 Change Change
Civilian non-inst pop 238,704 1,510 240,214 242,269 2,055 0.9%
– Civilian labor force 152,536 258 152,794 153,485 691 0.5%
— Employed 137,599 216 137,815 139,944 2,129 1.5%
— Unemployed 14,937 42 14,979 13,541 – 1,438 -9.6%
– Not in labor force 86,168 1,252 87,420 88,784 1,364 1.6%

(2)  The establishment survey

The second survey asks employers to report jobs.  Note it shows the same growth as the household survey, giving us more confidence in the result.

Category 2011 2012 Change Change
Total non-farm 128,327 130,263 1,936 1.5%
Total private 106,199 108,403 2,204 2.1%
Total government 22,128 21,860 – 268 -1.2%

(3)  Unemployment

The analysts at BLS calculate six measures of unemployment, from narrow to broad definitions.  None is more real than the others; most people consider U-3, or U-4, or U-5 as the most useful measure.  U-6 includes people with part-time jobs who prefer full-time work, and so includes underemployment.

Any way you count it, unemployment has decreased during the past year.  Slowly.

Metric Jan-11 Jan-12
U-1 5.6% 4.9%
U-2 6.2% 5.4%
U-3 9.8% 8.8%
U-4 10.4% 9.4%
U-5 11.4% 10.5%
U-6 17.3% 16.2%

(4)  For more information about US government finances

  1. A certain casualty of the recession: the US Government’s solvency, 25 November 2008
  2. We have been warned. Death of the post-WWII geopolitical regime, 28 November 2008
  3. Beginning of the end of the Republic’s solvency. Soon come the first steps to a reformed regime – or a new regime., 14 August 2009
  4. Update on our government’s deteriorating solvency, 1 October 2009
  5. Another crack in Republic’s foundations: not the size of the debt, but when it’s due, 30 October 2009
  6. A look at our government’s debt – rising because we like to spend, 29 December 2009
  7. See the very essence of the US government’s financial problems (clue:  it’s us), 2 April 2010
  8. Our government’s finances are broken. How do we compare with our peers?, 8 April 2010
  9. Today’s conservative doomster warning (ludicrous but fun), 1 August 2010

This post originally appeared at Fabius Maximus and is posted with permission.

One Response to "About the January Jobs Report – Mildly Good News, but Bought at Great Cost"

  1. sierra7   February 7, 2012 at 2:11 pm

    BLS Statistics should be renamed: "BS" Statistics.