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The BLS Jobs Report Covering September 2011: 30 Million Disemployed

The Bureau of Labor Statistics jobs report for September is out. On the surface, it is a mixed report. 103,000 jobs (Establishment survey) were created in September. The private sector created 137,000 jobs with 45,000 of these coming from telecommunication workers returning from strike. Government lost 34,000 jobs in all with local government losing 35,000. Additionally, totals for the two previous months were increased by 99,000. Yet despite this, the U-3 unemployment rate (Household survey) remained unchanged at 9.1%. Beneath the surface, things are, however, getting steadily worse.

To see what is really going on, as usual, we need to look more deeply into the numbers.

In September the potential labor force, the non-institutional population over 16 (NIP), increased 200,000 from 239.871 million to 240.071 million. The employment-population ratio was 58.3, up a tenth from the previous month. So the number of jobs needed to keep up with population growth, the product of these two numbers, was 117,000. The simplest explanation for why the U-3 didn't budge can be found here. Enough jobs (103,000) were created to just about offset population growth. Neutral.

The number of unemployed remained virtually unchanged, increasing by 25,000, to 13.992 million. The number of employed, on the other hand, increased markedly up 398,000 to 140.025 million. All other things being equal this would be an excellent number. Unfortunately, all things are not equal. The number of part time workers increased 444,000 from 8.826 million to 9.270 million. In other words, the number of full time workers actually decreased slightly in September. Over the last two months, the number of part time workers has grown by 874,000. Negative.

The broader U-6 measure of un- and under employment increased from 16.2% to 16.5%. The marginally attached edged down from 2.6 million to 2.5 million. Converting these rates into numbers, the U-6 increased 524,000 in September to 25.827 million. Negative.

The BLS showed a drop of 252,000 to 6.241 million in its category, Not in Labor Force Want a Job Now, which I take to be its measure of its undercount. Subtracting out the overlap of the marginally attached which are counted both in this and the U-6 gives 29.557 million disemployed, an increase of 784,000 from August. This is a disemployment rate of 18.7% up from 18.3% in August. Negative.

For my alternate calculation of the BLS undercount, I first calculate what the labor force should be if we were in a reasonably robust expansion: .67(NIP) and then subtract the current labor force from it. The difference is the undercount. My calculation for the undercount in September is 6.831 million. This gives a disemployment number of 30.147 million and a disemployment rate also of 18.7%. I have not back calculated to the beginning of the December 2007 recession (using this calculation) but I believe this is the first time disemployment has broken 30 million. This is significant. You see while the official 9.1% unemployment rate is bad. It hasn't changed much from the 9.0% it was at the beginning of the year. This leaves the impression that while things have not been getting better, they haven't been getting worse. But this isn't true. When we look at the bigger picture, disemployment has been getting worse, much worse. Negative.

In other news, the percent of long term unemployed (more than 27 weeks) which had declined in August to 42.9% jumped back up to 44.6%. Average weekly hours increased a tenth of an hour to 34.3 hours. Average hourly earnings increased 4 cents to $23.12 returning to where they were in July. Wages look like they are continuing to run behind inflation. Unemployment among whites was at 8%. Unemployment among African Americans was twice that at 16% but this was down from 16.7% in August. The unemployment rate among African American teenagers was 44.2% down from 46.5% the previous month, compared to 21.3% for white teenagers.

In conclusion, 30 million is the number this month and it doesn't appear in the jobs report. 30 million Americans is a lot of Americans. It is a lot of families, a lot of hopes and dreams. The Republicans don't care at all. Neither do Obama and the Democrats. Even by Obama's own best case scenario, his jobs plan would create 1.9 million jobs (lasting about a year). The truth is the way his package is structured he would be lucky to create one million, but most of the plan is just an election campaign gesture. It is not meant to be enacted but to provide campaign talkingpoints. But even if it were, 1.9 million temporary jobs would, after taking into account population growth, improve the U-3 unemployment rate by maybe 0.4%. Take my estimate of one million jobs and it would not cover population growth and have no positive effect on the U-3 rate at all. And this is the response of our political Establishment to a problem whose size they say is 14 million. Only it is more than twice that big, 30 million. To be blunt, we are so screwed. Not only do we have a huge jobs crisis that is getting worse but our political duopoly is committed to doing nothing about it beyond some short term exploitation of it to score a few political points.

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Cujo359's picture
Submitted by Cujo359 on

And this is the response of our political Establishment to a problem whose size they say is 14 million. Only it is more than twice that big, 30 million. To be blunt, we are so screwed.

When I wrote this about the jobs bill a couple of weeks ago, I used the Krugman method of figuring out how big it should be - it needed to be a significant portion of the output gap in the economy. By that criterion, it was an order of magnitude too small.

And here we are now talking about a jobs bill that won't create a tenth of the jobs we need to create.

Go figure.

ite magna aut ite domum - it's definitely not the Obama Administration motto.

Submitted by libbyliberal on

.00002 + .00002 = .00004 in the world of incremental Dems

I asserted in a comment recently that Obama couldn't smoke and mirrors the jobs situation as easily as he did the faux-health care issue. But you have just proven me wrong. So he will slather on the "those mean old Republicans" rhetoric while super screwing the people once again as Mr. Lesser of Two Evils, with many citizens still fighting to believe he is earnestly doing his best and will do the right thing by the country if only the Repubs weren't block him so strongly.

The nation can't get to the proverbial step 1 of recovery until it acknowledges REALITY, how unmanageable and profoundly critical things actually are and how wronged we have been by ALL our oath-taking government reps especially the fraudster at the helm.

Submitted by jawbone on
Government lost 34,000 jobs in all with local government losing 35,000.

Does this mean some governmental entities added substantial numbers of jobs? Or am I not understanding what you're saying?


Submitted by Hugh on

Federal lost 1,000 jobs, states added 2,000 jobs, local governments lost 35,000 jobs: total net was a loss of 34,000 government jobs.