# Good news on employment? Or Juggling Statistics?

C

#### Charmed

Dear Covers:

There is some good news here if you have been sending out resumes.

Hiring picked up a bit in August.
U.S. payrolls rose by 144,000, jobless rate slips

http://www.msnbc.msn.com/id/5905328/

In August, factories added 22,000 jobs, up from 6,000 the previous month — an encouraging sign for a sector that was hardest hit by the 2001 recession and has struggled mightily to get back on firm footing.

But.....there were 8 million people unemployed in August, with the average duration of 19 weeks.

I look at the "absolute" number of 8 million unemployed, not the "rate" or the percentage. Just imagine what that would happend if even 5 out 8 of these get employed! Need help here....

Charmed

J

#### Jim Howe

I always have problems with unemployed stats. For example, the US census estimates that as of 9/7/04 the US population is 295,210,295. Now the rate for August was 5.4% which = 15.8 million not 8 million. So clearly there using some other figure then total Pop! What is that figure and how do they arrive at it?

C

#### Craig H.

" An individual is counted as unemployed if the individual is over the age of 16 and is actively looking for a job, but cannot find one. Students, those individuals who choose to not work, and retirees are not in the labor force, and therefore not counted in the unemployment rate. "

So, if someone is not looking, they are not counted.

#### Al Rosen

Super Moderator
Jim Howe said:
I always have problems with unemployed stats. For example, the US census estimates that as of 9/7/04 the US population is 295,210,295. Now the rate for August was 5.4% which = 15.8 million not 8 million. So clearly there using some other figure then total Pop! What is that figure and how do they arrive at it?
You may find the answer here:
http://www.bls.gov/cps/home.htm

#### Tim Folkerts

Trusted Information Resource
Jim,

A couple of points on unemployment figures. The main idea is that unemployment counts people who are looking for work but can't find something. So first of all, the total US population counts al lot of people who are too old or too youung to consider employment. Even among 18-65 year olds, there are a lot of people who choose not to enter the work force.

The challenge with the figures (at least as I understand it) is that unemployment is counted by looking at people claiming unemployement benefits. After a while, the unemployment benefits stop and I believe at that point you are dropped from the lists of unemployed. You are no longer considered part of the workforce - you are neither employed nor unemployed so you don't matter in the unemployment rate. Sometimes this makes sense (e.g. a mom who decides to leave the workforce to be at home with the kids) and sometimes it makes less sense (e.g. a factory worker who is laid off in an area that has in increasing competition for a decreasing number of openings.)

Tim F

A

#### AllanJ

During the 1980s and 1990s when Britain was reshaping its economy, under Margaret Thatcher and, later, under John Major, the manner by which unemployment figures were calculated was "adjusted" several times. One device to reduce the figures was to consider all thsoe people being trained under government schemes as not unemployed, even though they were collecting benefits. The country became skeptical of the figures. I would suggest a healthy dose of the same in the USA.

In any case, counting someone as employed is very nice. But, those who have been downsized may well be finding jobs paying substantially less than at their previous employer. So, what matters also is the overall earnings of all those employed. That begins to show a clearer picture of the economy. IMO it does not look as strong as we are supposed to believe.

C

#### Charmed

BLS data on employment statistics

The following link gives the official Bureau of Labor Statistics numbers for each state. Click on Most Requested Statistics and then look under each state for the info.

http://www.bls.gov/lau/home.htm#data

The tables give the labor force, the number who are employed, the number unemployed and the unemployment rate. The data covers the period from Jan 1994 to July 2004.

Charmed

#### Marc

##### Fully vaccinated are you?
As was mentioned above, the more important aspect is the question of how these 'statistics' are derived. The latest number I have seen is that 'unadjusted', the real unemployment rate in the US nation wide (all people who are looking for work including categories such as those whose unemployment has run out) is over 9.5%.

#### Jen Kirley

##### Quality and Auditing Expert
Marc said:
As was mentioned above, the more important aspect is the question of how these 'statistics' are derived. The latest number I have seen is that 'unadjusted', the real unemployment rate in the US nation wide (all people who are looking for work including categories such as those whose unemployment has run out) is over 9.5%.
That is a figure I feel I can believe, since so many unemployed run out their benefits and hang out shingles as consultants. Then they are, poof! small business startups. My SBDC counselor agreed the landscape is thick with such people.

#### Marc

##### Fully vaccinated are you?
Another factor: The difference between job numbers based on overall payroll statistics, and those based on private sector payroll statistics.

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