Joblessness Far Higher Than 8.9% BLS Rate
– Tue Mar 22, 4:17 pm ETSince November 2010, the unemployment rate has tumbled from 9.8% to 8.9% in February. That seems to signal a return to healthy job growth. But is it real?
While unemployment has fallen nearly a full percentage point, just 407,000 payroll jobs have been created — a mere 0.3% rise.
How can that be? Maybe it's because the real jobless rate — which includes those unemployed Americans so discouraged they've stopped looking — is higher than 8.9%. Much higher.
"Though the official unemployment rate is improving, according to our poll, we still have at least 20% of able Americans looking for full-time employment," said Raghavan Mayur, president of TechnoMetrica Market Intelligence, IBD's polling partner. "Jobs will be the No. 1 issue in the next presidential election."
Americans assume the Bureau of Labor Statistics' unemployment rate is an indicator of the job market's health. But as with other government data, it's notable as much for what it doesn't reveal as for what it does.
At one time, the jobless rate included all people without jobs.
But during the first Clinton administration, the BLS changed its definition to exclude long-term discouraged workers. As a result, the unemployment rate has looked far lower than it really is.
The labor-force participation rate, now 62.2%, is at a 27-year low. If you're not in the work force, you can't be "unemployed."
Several private-sector measures also paint a bleak picture of what the Washington Post recently referred to as America's "hidden work force."
• Gallup's "broader unemployment" measure combines the unemployed with part-time workers seeking full-time work. It rose to an alarming 19.9% in March, from 17.2% in December.
• The IBD/TIPP poll also suggests far-higher joblessness. Since May 2010, it's asked people about their own situation, but also "how many members of your household are currently unemployed or looking for employment?"
In March, 19.4% were looking for a job — equal to 30 million Americans. That's actually an improvement from November, when 35.2 million sought work.
• Economist John Williams at his Shadow Government Statistics website says that using old U.S. government data definitions — including both long- and short-term discouraged workers, plus the regular unemployed — 22% of Americans don't have meaningful work.
A big reason may be the dearth of startups. New firms account for just 3% of employment but make up 20% of new jobs, according to a new study by John Haltiwanger, Ron Jarmin and Javier Miranda for the National Bureau of Economics Research.
"The fastest-growing continuing firms are young firms under the age of five," they wrote.
Today, startups are struggling with the uncertainty caused by the $862 billion stimulus, TARP, the Federal Reserve's quantitative easing policy and ObamaCare's looming costly regulations.
Job openings are off 37% from when the recession began in December 2007, according to BLS' JOLTS survey. Gross private hiring — before layoffs and other job exits — is down by 1.15 million.
At the current hiring pace, jobs won't hit their old peak until December 2016.
While unemployment has fallen nearly a full percentage point, just 407,000 payroll jobs have been created — a mere 0.3% rise.
How can that be? Maybe it's because the real jobless rate — which includes those unemployed Americans so discouraged they've stopped looking — is higher than 8.9%. Much higher.
"Though the official unemployment rate is improving, according to our poll, we still have at least 20% of able Americans looking for full-time employment," said Raghavan Mayur, president of TechnoMetrica Market Intelligence, IBD's polling partner. "Jobs will be the No. 1 issue in the next presidential election."
Americans assume the Bureau of Labor Statistics' unemployment rate is an indicator of the job market's health. But as with other government data, it's notable as much for what it doesn't reveal as for what it does.
At one time, the jobless rate included all people without jobs.
But during the first Clinton administration, the BLS changed its definition to exclude long-term discouraged workers. As a result, the unemployment rate has looked far lower than it really is.
The labor-force participation rate, now 62.2%, is at a 27-year low. If you're not in the work force, you can't be "unemployed."
Several private-sector measures also paint a bleak picture of what the Washington Post recently referred to as America's "hidden work force."
• Gallup's "broader unemployment" measure combines the unemployed with part-time workers seeking full-time work. It rose to an alarming 19.9% in March, from 17.2% in December.
• The IBD/TIPP poll also suggests far-higher joblessness. Since May 2010, it's asked people about their own situation, but also "how many members of your household are currently unemployed or looking for employment?"
In March, 19.4% were looking for a job — equal to 30 million Americans. That's actually an improvement from November, when 35.2 million sought work.
• Economist John Williams at his Shadow Government Statistics website says that using old U.S. government data definitions — including both long- and short-term discouraged workers, plus the regular unemployed — 22% of Americans don't have meaningful work.
A big reason may be the dearth of startups. New firms account for just 3% of employment but make up 20% of new jobs, according to a new study by John Haltiwanger, Ron Jarmin and Javier Miranda for the National Bureau of Economics Research.
"The fastest-growing continuing firms are young firms under the age of five," they wrote.
Today, startups are struggling with the uncertainty caused by the $862 billion stimulus, TARP, the Federal Reserve's quantitative easing policy and ObamaCare's looming costly regulations.
Job openings are off 37% from when the recession began in December 2007, according to BLS' JOLTS survey. Gross private hiring — before layoffs and other job exits — is down by 1.15 million.
At the current hiring pace, jobs won't hit their old peak until December 2016.
No comments:
Post a Comment