Shifting employment figures raise questions about the latest rate
by Don McKee
October 10, 2012 01:19 AM | 1907 views | 4 4 comments | 12 12 recommendations | email to a friend | print
Don McKee
Don McKee
The unemployment rate has finally fallen back to what it was when President Obama took office – 7.8 percent in September, according to the federal Bureau of Labor Statistics. It was down from 8.0 percent in August.

But the Heritage Foundation analyzed the figures and concluded the reported “drop in the unemployment rate is inconsistent with other economic indicators and may represent statistical sampling error.”

There was slow growth in hiring reported by employers, a net 114,000 new jobs, but the household survey had an increase nearly eight times higher, resulting in the jobless rate dropping 0.3 percent to 7.8 percent. Heritage pointed out that the surveys are samples and, like political polls, have margins of error.

Holding back growth, the foundation noted, was a sharp decline in employment by startup companies, now at a record low – and very bad news since this is the major job generator in America. Reasons for the lack of hiring by new businesses: “Impending tax increases make it more risky to hire, and excessive regulations make it more expensive to start up new businesses,” Heritage said. “Congress and the Administration should reduce barriers to starting a business instead of increasing them.”

There are other negative features of the unemployment picture presented by the government agency. Of the 114,000 new jobs reported in September, 10,000 were created by government, and most of the revised 86,000 new jobs for July and August came from the government. Still another troubling part of the report was a drop of 16,000 jobs in contracting in manufacturing for the second month in a row.

And the number of people working part-time jobs and wanting full-time work increased 7.5 percent to 8.6 million, the biggest jump since February 2009. There was little change in the number of long-term unemployed (out of work 27 weeks or more) at 4.8 million, or 40 percent of the unemployed.

Still another gauge of the weakness of the economy, involuntary part-time workers – employed part-time for economic reasons – increased from 8.0 million in August to 8.6 million in September. This group includes individuals working part-time not out of choice but because their hours were reduced or they couldn’t find full-time jobs.

Then add the 2.5 million unemployed designated as “marginally attached to the labor force.” They were not in the labor force, the BLS said, but “wanted and were available for work and had looked for a job sometime in the prior 12 months.” Why weren’t they counted as unemployed? “Because they had not searched for work in the four weeks preceding the survey.” Add another 1.7 million “marginally attached” who didn’t look for jobs in the four weeks prior to the survey “for reasons such as school attendance or family responsibilities.”

Add up all the numbers and the rate nearly doubles 7.8 percent. U.S. News & World Report says the government’s own U-6 measure, including the “unemployed, underemployed, too discouraged to look for work or ‘marginally attached’ to the labor force,” shows a 14.7 percent rate.

Comments-icon Post a Comment
Proof again
October 11, 2012
Proof again that Donnie is simply a fool who will latch onto any of the latest concocted conspiracy theories from the right wing pundi-flackery (which the Heritage Foundation happens to be a founding member of).

Donnie, simply reprinting an analysis from a thoroughly partisan flack operation like the Heritage Foundation is not journalism -- either of the editorial flavor or of the hard reporting flavor. But hey, if you're into re-printing reports from the Heritage Foundation, why not reprint the report wherein they originally constructed the healthcare system which is now derided as "Obamacare"?

Sorry Donnie, no dice here: the unemployment rate is 7.8%...much as that might be an inconvenient narrative for your dim, rightwing mindset to grasp.
B D Lane
October 10, 2012
It's an interesting anomaly, which is certainly worthy of discussion. Jack Welch, a rather serious figure in the world of business, articulately expounded upon his thoughts on this matter today in the Wall Street Journal. (I only mention this as he's reference in this article's "comments.")

That said, Mr. McKee does a very nice job of pointing out why it is completely reasonable for citizens to question how exactly one BLS number--in any quarter under any administration--is derived, as well as how that number might be skewed and what that number is supposed to measure.
Kevin Foley
October 11, 2012
B.D. - When Neutron Jack was asked for evidence, he said he had none. Look it up.

Nothing to see here, move along.
Kevin Foley
October 10, 2012
It figures Heritage would be among the "truthers" like Donald Trump and Jack Welsh claiming the BLC "cooked the books."

File this under "birth certificate."

*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides