Economists are abuzz over the numbers behind the big number of the day. While non-farm labor employment fell by a staggering 533,000 jobs, ticking the national unemployment rate to 6.7% from 6.5%, the Times' Economix blog offers a much darker perspective.
According to the Labor Department, the number of unemployed workers rose by 251,000 in November. But the number of people who were outside of the labor force -- that is, neither working nor looking for work -- rose by much more: 637,000. These people aren't counted as unemployed in the government's statistics, because they are not looking for work. Many of them, presumably, have stopped looking for work because they didn't think they could find a good job.
That's roughly the equivalent of every man, woman and child in the cities of Minneapolis and St. Paul throwing up their hands and saying, "I give up."
The report from the Bureau of Labor Statistics has a few more interesting nuggets. The place to be appears to be in health care. It looks to be the only major sector to add a significant number of jobs over the last year.
Health care employment grew by 34,000 in November. Over the past 12 months, health care has added 369,000 jobs.
When the numbers show that 1 in 5 teenagers can't find work, it adds to sense that college is becoming unaffordable.
If you have a job, you're likely to be spending less time physically at work.
In November, the average workweek for production and nonsupervisory workers on private nonfarm payrolls fell by 0.1 hour to 33.5 hours, seasonally adjusted--the lowest in the history of the series, which began in 1964.
In other words, welcome to The Recession!
Update: Of course, Wall Street takes these numbers and runs up 3 to 4 percent.
The Economix blog stats may be darker, but I am ALWAYS in favor of accurate information, whether it's dark or not.
It is incompetent for the government to produce -- and for the media to parrot -- labor and employment stats that are not accurate, which is exactly what happens when the people who have given up or aren't looking for employment for whatever reason aren't included.
The same goes for inflation stats that always back out the primary expenses of energy and food.
Surely a significant number of people "not looking for work" have started their own businesses or have become self-employed consultants, freelancers, or homemakers. There's no reason to assume they've all given up on working.
@Jack - I imagine that's a possibility.
Here's another reference to those folks in the report.
Among the marginally attached, there were 608,000 discouraged workers in November, up by 259,000 from a year earlier. Discouraged workers are persons not currently looking for work specifically because they believe no jobs are available for them.
It's always interesting to see the methodology of the surveys as well. If you open up the report it starts on page 8.
Here's a pertinent section:
For example, the confidence interval for the monthly change in total employment from the household survey is on the order of plus or minus 430,000. Suppose the estimate of total employment increases by 100,000 from one month to the next. The 90-percent confidence interval on the monthly change would range from -330,000 to 530,000 (100,000 +/- 430,000). These figures do not mean that the sample results are off by these magnitudes, but rather that there is about a 90-percent chance that the “true” over-the-month change lies within
So, I guess we can be 90 percent sure the economy is underperforming.
There may be some who have started their own "business", but in tough times that is even tougher than normal.
It also depends on where they are in the cycle. Do you work in a low pay or temp and lose your unemployment benefits. As long as people get the benefits they won't take a short term job.
When they run out of options is when they start their own business or start working temp. We really need programs that work hard to get these people back to productive work, because that is what will get the economy going again.
If the government is going to provide incentives, may be they should go to businesses that hire the longer term unemployed.
significant numbers of unemployed starting their own businesses, being consultants, independent, during a recession? Your planet just called, it wants you back.
For one thing, a very small percentage of Americans are entrepreneurs, and 50% of new businesses fail within three years so I wouldn't expect any significant results on that front. Especially when new business loans are frozen because of the credit crunch. Most new businesses operate at a loss for the first 2-4 years. And don't forget, the self employed, and I speak as one of them, don't get health insurance unless you have a spouse who works somewhere that provides it.
Another statistic that frequently gets short shrift is the job vacancy rate. Just so people don't conclude that discouraged workers are just being lazy, the vacancy rate tells you how many jobs there are for those who are looking. Right now in MN it's a 3-1 margin, in other words there is one job for every three people looking for work. These folks are unemployed, and they're going to stay that way. That's bad.