So, the administration says that ‘official unemployment’ falls to 9.7% from 10.0% but that the economy still shed 20,000 jobs.
The real story here is that a class of worker that the administration mostly ignores but which Leo Hindery has been pointing a screaming headlight at — unemployed, plus underemployed and discouraged workers — are working a bit more, at least some of them.
Hindery actually has a more interesting story to tell in what is happening with “real unemployment” which has dropped from 19.1% last month to 18.4% for January 2010.
Those people working cut back hours are apparently working more than they were, but as of yet, an overall number of new jobs is not being created.
I am going to post Leo Hindery’s Monthly Jobs Report here and follow it with Council of Economic Advisers Chair Christina Romer’s report distributed by the White House.
First, Leo Hindery’s January 2010 “Real Unemployment” Report:
Using its Current Population Survey of non-farm jobs, the Labor Department’s Bureau of Labor Statistics just announced this morning that in January 2010 “U.S. employers decreased [non-farm] payrolls by 20,000 jobs and the unemployment rate fell to 9.7%.”
It noted that there are now 14.8 million unemployed workers, and that since the recession began [in December 2007] employment has decreased by 7.8 million. (I should note that in its report the BLS also revised down sharply its December 2009 job loss figure to 150,000, from an originally reported 85,000 drop.)
As we have been noting, the monthly BLS announcement regarding unemployment:
· uses only a survey of households rather than much more accurate payroll data;
· excludes changes in employment among the nation’s 11.1 million farm and self-employed workers, even though these two categories represent more than 7% of the civilian labor force; and
· most important, does not take into account the 14.4 million workers who are part-time-of-necessity [8.3 mm], marginally attached [2.5 mm], or out of the labor force because they are “discouraged” [3.6 mm].
Our “Summary of U.S. Real Unemployment” makes these three adjustments; it also identifies average weeks unemployed, job openings, and the real jobs ‘shortfall’. With the three adjustments made:
· The number of employed workers in all three categories of employment – non-farm, farm and self-employed – increased by 541,000 in January.
· The real unemployment rate is 18.4%.
· The number of real unemployed workers in all four categories of unemployment – BLS, part-time-of-necessity, marginally attached, and discouraged – totals 29.3 million.
· The number of real unemployed workers has increased by 12.5 million since the start of the recession. (In contrast, we should have been creating a net 2.7 million new jobs in the past 25 months just to keep up with the natural growth of the labor force of around 108,000 workers per month.)
· The economy is short 21.3 million jobs in order to have a real unemployment rate of 5%, which would generally be considered ‘real full employment’.
(Much of the national press now uses our real unemployment numbers, except some still leave out discouraged workers despite the fact that this huge category is arguably the most effectively unemployed of the four unemployment categories – this omission leads to a rate of 16.5% instead of our overall real unemployment rate of 18.4%.)
The current average number of weeks unemployed is at least 30.2 and the number of workers unemployed at least a half year is at least 9.9 million [i.e., BLS’s figure of 6.3 mm plus the 3.6 mm discouraged workers]. (Note: These two numbers are much better measures of real employment health than is the more publicized rolling four-week average of initial unemployment claims, which at around 450,000-500,000 workers is at best a very limited snapshot of the true state of the economy.)
Now from the White House:
Statement by Chair of the Council of Economic Advisers Christina Romer on the Employment Situation in January
On the Employment Situation in January
While unemployment remains a severe problem, today’s employment report contains encouraging signs of gradual labor market healing. The unemployment rate fell three-tenths of a percentage point and employment rose in a number of industries, though overall employment fell slightly.
The unemployment rate declined from 10.0 percent to 9.7 percent. This decline occurred despite a modest rise in the labor force. The broadest measure of the unemployment rate, which includes all persons marginally attached to the labor force and workers working part time for economic reasons, fell almost a full percentage point. Obviously, the unemployment rate remains unacceptably high, and is even worse for certain demographic groups such as teenagers and black or African American workers.
Overall payroll employment declined 20,000 in December. This total reflects substantial variation across industries. Employment in manufacturing rose for the first time since January 2007, led by an increase in employment in motor vehicles and parts. Employment also rose in retail trade and in temporary help employment. Employment fell, however, in construction and state and local government.
Even as today’s numbers contain signs of the beginning of recovery, they are also a reminder of how far we still have to go to return the economy to robust health and full employment. Indeed, with the benchmark revision announced today, we now know that the total job loss over the recession was more than 1 million larger than previously estimated.
That is why at the same time that he released a plan for reining in the budget deficit over the medium and long run, the President has called on Congress to enact responsible, targeted actions to jump-start job creation. His proposals for a small business jobs and wages tax cut and a new program to encourage small business lending are important steps to help the businesses that are essential to robust job creation. Today’s numbers showing continued decline in construction and state and local government employment emphasize the importance of two other of the President’s priorities–continued infrastructure investment and additional aid for strapped state and local governments.
There will likely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.
Bottom line: American workers are not out of the woods yet by a long shot. And when one looks at a looming $200 billion in shortfall in state budget revenues ahead in 2010, which will have significant destimulative effects, there are another 3 million jobs slated to be cut rather than created.
— Steve Clemons