Monday, July 08, 2013

"Encouraging" Jobs Report

As usual, the media reports employment by cherry picking the best numbers from each of two different employment reports, “June adds 195,000 new jobs, unemployment 7.6%.” The latter number is from the Household Survey and it’s more modest report of 155,000 new jobs is not reported. The former number is from the Establishment Survey, which does not report an unemployment percentage.

The Establishment Survey always reports more jobs because when someone is working two part time jobs the Establishment Survey will report two jobs, while the Household Survey will report only one person working. Likewise, if a person who is already working a part time job takes on another part time job at a different company the Establishment Survey will report a new job, while the Household Survey will not report a newly employed person.

By reporting the unemployment percentage from one report and the job number from a different report, we get an overly optimistic picture of what is happening. Even worse, by not reporting on the types of jobs the picture is distorted even more badly. In June, while the number of employed persons increased by 155,000, the number of persons working part time not by choice increased by 332,000, so we actually lost 177,000 full time jobs during the month of June.

To point out just how dismal our economy is for the working class, between 2007 and this year the working age population has increased by 14 million people, but the total number of employed people has decreased by 2 million. That’s a net loss of jobs of 16 million, against a work force of 155 million, and represents a true unemployment of 10.3% in the real world.

Even worse, while total employment has decreased by 2 million during those six years, the number of persons employed in full time jobs has decreased by 5 million. So the percentage of people who are unemployed or underemployed is actually 12.3% in unmanipulated numbers.

Since employment reports today are containing unreported decreases in full time jobs and increases in part time jobs, it is going to be a very, very long time before we get employment reports that actually are as “encouraging” as the media claims this one to be.

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