Jobless rate reaches 9.8 percent in September

[WriteDown]

Source: AP

WASHINGTON (AP) -- The unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected. The report is evidence that the worst recession since the 1930s is still inflicting widespread pain.

Persistently high unemployment could weaken the recovery as consumers, concerned about their jobs and incomes, restrain spending. Consumer spending accounts for about 70 percent of the nation's economy.

The Labor Department said Friday that the economy lost a net total of 263,000 jobs last month, from a downwardly revised 201,000 in August. That's worse than Wall Street economists' expectations of 180,000 job losses, according to a survey by Thomson Reuters.

The unemployment rate rose from 9.7 percent in August, matching expectations.

If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.

More than a half-million unemployed people gave up looking for work last month. Had they continued searching, the official jobless rate would have been higher.

All told, 15.1 million Americans are now out of work, the department said. And more than 7.2 million jobs have been eliminated since the recession began in December 2007.

Read more: http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=TXDAM&TEMPLATE=BUSINESS.html&SECTION=HOME

---

Ugh.

[robcon]

1. Spending up: employment down

Sounds like a lot of extra credit card purchases in this recession.

[rfranklin]

2. Still addicted to debt....

Geez, America is like a crack whore for debt.

[robcon]

3. And the banks have a lot of credit that isn't being paid back...

Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt
By James Sterngold, Linda Shen and Dakin Campbell

Oct. 2 (Bloomberg) -- The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses could slow an economic recovery.

Units of Frontier Financial Corp.,Towne Bancorp Inc. and Steel Partners Holdings LP are among 26 firms with more than one-fifth of their loans 90 days overdue or not accruing interest as of June 30 -- a level of distress almost five times the national average -- according to Federal Deposit Insurance Corp. data compiled for Bloomberg News by SNL Financial, a bank research firm. Three reported almost half of their loans weren’t being paid.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXZinRhF5tlA

[Psephos]

23. Consumer debt is down, and trending down as well. It's govt. that's behaving like a crack whore. nt

[Old Hob]

4. Kids went back to school in August which could account for a fair amount of the increased spending

I suspect folks are dipping into savings too. I know I have.

[robcon]

7. The data are seasonally adjusted: i.e. 'normal' seasonal patterns are excluded.

The back-to-school spending is adjusted for in the data for both spending and unemployment.

In September the actual unemployment rate is 9.5%, but it is seasonally adjusted to 9.8%
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet

edit:spell

[Jakes Progress]

10. 15 million out of work

and you only get the part about spending? Spending figures are based on hundreds of factors including pent-up demand as in the clunkers program and fat cats spending the loot the government has given them. As far as credit card purchases, that would be because over 15,000,000 people don't have the income to use cash to buy food, clothes, and gas.

I read the article and I see millions of kids not having a Christmas or millions of families breaking up or millions of men and women spending their lives in desperation and depression.

We don't need BOA or AIG. We need Americans at work. The spending priorities to worry about are where the administration chooses to put our tax money - corporations over people.

[Stumbler]

5. Why, oh why isn't the 17% figure in the headline?

Why do we continue to fool ourselves into thinking 20 hours at minimum wage constitutes "employment." Add the underemployed to the number seeking "jobless benefits" and people might begin to understand how severe this recession is.

[robcon]

8. The unemployment rate is correctly released by the BLS

That 17% number is not the unemployment rate... it is a special analysis of the numbers.

[MannyGoldstein]

6. But The Paulson/Summers/Geithner Banker Bailout Was A Raging Success!

Paying themselves astonishing bonuses with our tax dollars.

And all is well in the kingdom.

[twitomy]

9. Dont worry, we are going to get the Olympics....

Imagine all the jobs it will create; well for hookers anyway...

[bhikkhu]

17. Or not...

congrats to Rio of course, I'd love to go!

[Freddie Stubbs]

11. If that number is not down significantly in 13 months, the GOP will make big gains in Congress

[robcon]

12. Do you mean if that number is up????

n/t

[Freddie Stubbs]

14. Whoops! I left out the word 'not.'

[recoveringrepublican]

13. Well I know since Aug we have been spending like mad people, all for school related things. nt

[area51]

15. Jobless rate is a lot higher than that

Paul Craig Roberts said that if unemployment was measured the same way as when he was in govt., we'd hvae 20% unemployment.

[pinqy]

16. Mr. Roberts is lying

The only change in the definitions since he was under Reagan is that since 2994 the military is no longer counted as part of the population (and excluding them raises the Unemployment rate) and those who have been hired but haven't started working yet are now required to have looked for work in the previous four weeks to be unemployed. Other than that, the definitions of Employed and Unemployed haven't changed since 1967.

[RUMMYisFROSTED]

19. The fact remains that unemployment numbers are under-reported.

[pinqy]

20. No, that's not a fact.

The numbers are reported pretty accurately (subject to margins of error of course). I'll assume that when you say under-reported that you mean the definition you would prefer to be used would give higher numbers. But that's not under-reporting unless you can show that your definition is the generally accepted one and/or a better definition for what is trying to be measured. And you can't do either. There's no absolute, handed down by God, definition of Unemployment so that any other definition is wrong. And the US definitions conform to the international standard...all developed nations use essentially the same definition, and most developing nations able to implement a statistical system tend to use the same definitions as well.

[RUMMYisFROSTED]

21. People fall off the rolls without having gained employment.

That fact alone, there are others, proves under-reporting.

[pinqy]

22. There are no rolls

The Unemployment rate comes from a survey, not a static list of people, and certainly not from a UI benefits list. Every month 60,000 households are surveyed on a rotating basis (every month some drop out and new households come in). If someone is no longer looking for work,for whatever reason, then they are not unemployed because they are no longer participating in the labor market. I really don't get the concept that someone who isn't trying to get a job should be considered unemployed.

Look at it this way...Three people, A, B, and C did not work and are not looking for work. Their impact on the economy and their chances of getting a job are identical...0. Yet you would call A Unemployed, B not-in-the-labor-force, and C Unemployed based on what they would prefer to be doing. Doesn't that strike you as arbitrary? Take 2 women who both quit thir jobs to have children and are staying at home looking after them. Would you really say one is not-in-the-labor force and one Unemployed because the second one states that she would really like to have a job? Can't you see the difficulties in constructing any kind of meaningful statistcs out of that (let alone the large margins of error that creep in as we would have to try to extrapolate from the sample how many similar women would say they want a job versus those that wouldn't).

[Psephos]

24. The statistic you want is total jobs in the US economy.

No muss, no fuss. More jobs good, less jobs bad.

We lost 785,000 jobs last month...that's the fourth worst showing this year. The current loss trend is accelerating, not decelerating.



The graph is directly based on BLS statistics.

[pinqy]

25. What's your source?

"We lost 785,000 jobs last month" The preliminary change for Aug-Sep was -263,000. Now that's probably not that accurate as not all reports are in and the birth/death model hasn't worked well in the recession, but it's the best we have. Where'd you get the 785,000 number?

Oh, and the graph isn't total jobs...it's non-farm payroll jobs.

[Psephos]

26. BLS (Bureau of Labor Statistics)

It's the official government site for labor statistics.

http://www.bls.gov/cps/

Look over on the right side of the homepage for "Latest Numbers."

You were referring to a different number, the Seasonally-Adjusted Unemployment figure. It's a synthetic statistic often seen in media sources. The more useful stat is called U6, which includes a lot of people left out of the SAU stat - people who have left the labor force, stopped looking for work, etc. U6 is brushing up against 17% currently. Search for it on BLS.

Here's the dataset for the job loss graph from my OP:

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS12000000&output_view=net_1mth

I like this stat much better as a snapshot. No B.S., no synthetics, no guesses about who's looking for work and who's not. Just shows how many jobs there are. This month there are 785,000 fewer jobs than there were last month.

[pinqy]

27. You're using the wrong numbers

You said "jobs" and then cited the CPS (Current Population Survey)...that's not a measure of jobs, but of Employment and Unemployment. Different concepts. "Jobs" usually refers to the Current Employment Statistics, which is a measure of non-farm payroll...it's what the chart shows. You were referring to the Employment numbers, which is not a measure of jobs, but of people. The main difference between the two surveys, and why they can't match up, is that the reference period for the CPS is the week containing the 12th, while the CES uses the pay period containing the 12th. And while the CES is more limited (to non farm payroll) it also tends to be more accurate because of the larger sample size.

I'm pretty sure your chart is from the CES, not CPS...I've never heard anyone besides you refer to CPS employment data as a measure of job loss. Oh, and doing the math, the formula for which can be found at BLS in the current edition of Employment and Earnings, the actual seasonally adjusted change was between -1,218,655 and -351,345 That's fairly large.

[Psephos]

28. Actually, you're using the wrong numbers

The CPS is used to determine total jobs being worked. For reasons previously stated, that's a more certain way of determining how many people are actually working in a paying job.

The CES is used to determine "unemployment," which has different meanings depending upon context and interpretation. There are several standard measures of employment. As noted in my previous post, the truly meaningful one is called U6. Did you read about it?

If you're not familiar with different statistical measures, spend some time browsing the BLS site, it's a gold mine. There are good introductory guides for those unfamiliar with the jargon and methods of labor statistics.

Unfortunately, the figure almost universally cited in popular media (the one you're familiar with) is quite misleading unless you understand how the statistic is constructed. It's synthesized from raw data, with multiple adjustments for potential workers who for a variety of reasons are not active in the labor market. Those "inactive" workers do not count in the statistic - it's as if they disappear. U6 is a much better guide, because it doesn't try to guess who actually is inactive, but for my money, there's no better quick appraisal of whether the job market is improving or worsening than the total number of jobs actually being worked.

Do you see the difference? Unemployment figures attempt to model the population who are "active" in the labor market. It's based on a lot of educated assumptions.

Job figures do not require model-based "normalizing." They are not massaged.

The evidence is simple and clear, according to the BLS. The United States has 785,000 fewer paying jobs this month than it did last month. The economy will not be perceived by working people to be improving until the slope of the graph I linked in my original post turns positive.

[pinqy]

29. You have them completely reversed.

The CPS is the Current Population Survey, and is a household survey conducted by the Census for the BLS. It measures Employment, Unemployment, some wage/salary information and a lot of demographics. It's the source for the Alternative Measures of Labor Underutilization U1 - U6

The CES is the Current Employment Statistics Survey, an Establishment survey of non-farm payroll employment. It does not measure Unemployment and is not used in the Unemployment calculations.

By the way I worked for BLS for many years....I know all the programs pretty well. I assure you I know far more about the methodology than you do.

"It's synthesized from raw data, with multiple adjustments for potential workers who for a variety of reasons are not active in the labor market. Those "inactive" workers do not count in the statistic - it's as if they disappear." No, there are no "adjustments" like that. The survey asks if the individual worked for at least one hour for pay during the reference week or 15 or more hours unpaid in a family business/farm. If the answer is yes, the person is Employed. If the answer is no, they are asked if they made any specific efforts to find work in the 4 week period ending in the reference week. If yes, they are Unemployed, if no, they are not in the Labor Force. They don't "disappear," they're just in a different category. Those not in the labor force are asked more questions about their job search activity in the previous year, and may be classified as "marginally attached" or "discuraged." There's no guessing...classification is based on what the respondent says.

And again, the Employment part of the CPS gives the number of people employed...not the number of jobs. Some people hold multiple jobs.

The CES is a bigger sample (and shorter questionaire) that asks employers (non farm industries) how many employees they have, what the average wages are for production workers and average hours. Because many business are created and many fold between the annual benchmarking of the number of businesses, a birth/death model is used to estimate the number of business and jobs created and gone away. When BLS announces numbers of jobs lost, it is the CES they are referring to.

[Psephos]

30. The civilian labor force dropped by 570,000 last month...

...instead of rising by the typical amount of 125,000 or 150,000.

From the BLS ESS:

"The civilian labor force participation rate declined by 0.3 percentage point
in September to 65.2 percent. The employment-population ratio, at 58.8 per-
cent, also declined over the month and has decreased by 3.9 percentage points
since the recession began in December 2007. (See table A-1.)"

On my calculator, if the labor force had neither shrunk nor risen, unemployment under commonly reported U4 figures would have been around 10.2%

That's a good illustration of why I prefer to look at the total number of jobs as a thumbnail indicator of whether job availability and employment prospects are trending up or down.

You are focused on unemployment. Most people are, especially in popular media, and for good reasons.

I am focused on number of jobs. Both are valid discussions, but only the jobs number is in my purview.

As I said before, I'm personally uninterested in U4 or other unemployment figures, and uninterested in debating the methodology or conclusions associated with them, due to structural issues about the reliability and inclusiveness of such figures. I do believe those figures are valid for making historical comparisons - to themselves. I'm interested in seeing something different, though.

The jobs figure I cited does not take note of whether a person is working one or four jobs, or other various tweaks. It simply measures the volume of paying jobs the US economy is currently providing. It's not as sophisticated as other measures, but it is also not subject to obfuscation or interpretation.

In a realm as politicized as labor statistics, that's a deal-closer for me.

[pinqy]

31. The labor force has been dropping for a while now...

...not unusual in a recession.
"On my calculator, if the labor force had neither shrunk nor risen, unemployment under commonly reported U4 figures would have been around 10.2%" I'm baffled as go how you could come to that conclusion. You'd have to know how many of those exiting the LF had been employed, how many unemployed, and how many would have been discouraged rather than some other category. I'm not sure how you would go about estimating that.
"I am focused on number of jobs. Both are valid discussions, but only the jobs number is in my purview." Which is okay, I guess..I prefer to look at all aspects. But in any case you weren't citing jobs, you were citing Employment from the household survey, which is not a measure of jobs and not what anybody else would be talking about when they talk about jobs.


"The jobs figure I cited does not take note of whether a person is working one or four jobs, or other various tweaks. It simply measures the volume of paying jobs the US economy is currently providing." No, that would be the CES, which you did not quote. The CES is the figure that measures the level of jobs (irrespective of multiple jobholders). It's not total jobs, though...there is no such measurement in the US.

If your interest truly is jobs, then you should also be looking at the Job Openings and Labor Turnover Survey (job openings, hirings, layoffs, retirements, quits), Business Employment Dynamics (gross job gains and losses) and also the Occupational Employment Statistics Survey(self explanatory) These give a fuller piture of the dynamic labor market.

[bhikkhu]

18. And the idiot in charge the last time it was this bad was -----

Ronald Reagan!

I got two teabaggers today with that one, while they were complaining about the "idiot in charge". Of course, to be fair, Reagan inherited a mess the same as Obama did. Bring it up with a RW'er and they may just admit that its not always the president's fault and economic issues take a long time to work out.

If I remember right, Reagan's shit didn't work and just made things worse until he had to buckle to the Dem's suggestions.