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The Employment Numbers

The New York Times reports that unemployment has dropped, from 9.6% to 9.4%. That sounds hopeful, but there are also 247,000 fewer jobs than there were in the first quarter of the year.

That’s because to be “unemployed” takes more than simply lacking a job. You must have actively looked for work in the four weeks before the survey. So these numbers really mean: while a whole lot of jobs were lost, even more people stopped looking.

That’s the thing about the government’s economic statistics—they’re often calculated in strange ways that make them sound a lot better than they should. It’s worth taking the occasional look at shadowstats.com to see how other calculations look. But shadowstats, rightly, relies on the government’s original data—that is, while the government’s calculations can be iffy, the data those calculations are based on are collected remarkably well.

So let’s take a look at the full data. Some interesting points come out:

  • 5 million people have been out of work for 27 months or more, up from 4.4 million from June.
  • 8.8 million people (~6% of the employed workforce) are doing part-time work because that’s all they can get. The number of these “involuntary part-time workers” has stayed steady for the past four months, which means that their proportion of the workforce has increased as the overall number of jobs has shrunk. They’re not counted as unemployed because they have at least some work.
  • 796,000 workers want work, and looked for work within the last year, but were too discouraged to look for work in the previous four weeks. That’s up from 631,000 in July of last year. Which, honestly, seems low to me considering the great difference in the economy between then and now. These workers aren’t counted as unemployed (because they’re not currently looking for work).
  • Around 1.5 million people want work, and looked for work within the last year, but weren’t counted as unemployed because of things like family or school responsibilities. That’s up from 1.1 million people a year ago. This increase is no doubt in part due to people taking the opportunity to go back to school or spend more time with their kids, but is also no doubt because family responsibilities can take up more of your time and energy when you’re living in a tent city. Also, it may be that many people who are just too discouraged report themselves as being too busy with other things; that would explain the low “discouragement” number.
  • People who want a job but can’t look for one because they can’t arrange transportation or child care also aren’t counted as unemployed. That number wasn’t reported but it’s a fair bet that it increased.

The sad thing is that these numbers are hopeful. 247,000 jobs is a lot to lose, but it’s nothing compared to the 645,000 lost every month between November and April. As Bonddad and others predicted months ago, we do seem to be coming to the end of the freefall; in my grouchy way I’m still not convinced that this is the beginning of a recovery–it could be the beginning of a long period of underperformance, or even just a pause before a further drop–but Bonddad is saying it’s a turnaround, and he’s been right so far.

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