Unemployment Rate Calculation
The unemployment rate is calculated by dividing the number of unemployed by the civilian labor force.
Unemployment Rate = 13.550 million / 160.838 million = 8.42%
Note that the reported headline jobs number today (+1.4 million) has nothing to do with anything. That is the establishment report number.
The number of employed (+3.756 million) does play into the calculation, but indirectly, as the labor force denominator.
Labor Force vs Employment
Note that employment rose by 3.756 million but the Labor Force only rose by 968,000. The impact of this discrepancy actually boosts the unemployment rate, but only by a tiny amount.
It’s the numerator that matters. The numerator should match continuing claims. It doesn’t.
Continuing Claims
The BLS reference week is the week that contains the 13th of the month. That is the week of August 9-15.
Major Discrepancy
- Continued claims for the week ending August 15 was 14.492 million as per the BLS.
- Yet, the BLS also says the number of unemployed for that week was 13.550 million.
Minimum Number
14.492 million is the extreme lower bound we should see for the number of unemployed.
Why?
State claims only include those eligible for state unemployment insurance.
Missing From Continued Claims Number
- Gig workers
- Self-employed
- Those who have not worked long enough to qualify for state benefit requirements
- Those who have maxed out the number of weeks the states allow
Primary PUA Claims
Pandemic Assistance
Primary PUA claims for the reference week were 13.57 million, an increase of 2.6 Million.
PUA picks up all 4 categories missing from Continued Claims. But it also picks up some number of part-time workers.
But at least some of those 13.57 million did not work at all.
For the sake of argument, assume a mere 3.0 million of these workers did not work at all.
Unemployment Calculation
Unemployment Rate = (14.942 Million + 3.0 Million) / 160.838 Labor Force = 11.16%
Other Discrepancies
I discussed other discrepancies in my Jobs report earlier today.
Part-Time Jobs
- Involuntary Part-Time Work: -871,000 to 7,572,000
- Voluntary Part-Time Work: +838,000 to 18,630,000
- Total Part-Time Work: +991,000 to 24,973,000
- Total Full-Time Work: +2,837,000 to 122,369,000
Part-Time Reporting Silliness
- The net of voluntary vs involuntary part-time work is -33,000.
- Total part-time work rose by 991,000
Don’t try to make sense of those numbers as they never add up. I list them as reported.
For details please see Jobs Report Much Better Than Expected, But Is It Believable?
Methodology Change
On top of this mess is a BLS methodology change that artificially lowered the number of initial and continued claims starting yesterday.
For discussion, please see Unemployment Claims Improve But It’s a Manipulation Mirage.
I suppose it is possible for the claims revision to be correct, but that still does not account for all the gig etc. workers on Pandemic Assistance that are genuinely unemployed.
Conclusion – Garbage
My conclusion is today’s unemployment rate numbers are total garbage.
Mish
Do you have data on what percentage of PUA recipients are working part time to supper your 3rd million guess? I am writing an article on real unemployment for my finance blog about how deceptive the 8.4 percent number is. I am interested in the total paid work hours lost this year, which includes partial unemployment. I’ve used examples of real people I know with names hidden to show how many would not be called unemployed if called by BLS for an interview. They all think of themselves as unemployed or suffeting from a huge loss of paid hours and income.
Like everything esle, NFP has been politicized and rigged to benefit Agent Orange and his hopeless re-election. These numbers especially don’t make sense when you have 4 million newly unemployed in the same month.
This needs to be picked up more and better dissected.
The computed change in the number of employed workers vs last month is 3,756 thousand. Non-farm payrolls increased by only 1,371 thousand workers last month, according to the BLS, or a shortfall of 2,385 thousand jobs.
So what happened? The agricultural sector employs on farms around 2.2 million workers directly, so they’d have to double employment to double workers. Self-employed (gig economy) workers might be another option; i.e, we’re overrun with Uber drivers. Then, there’s the fact that soldiers and certain government employees are not included in non-farm payrolls. Did Trump just raise 2.4 million soldiers in the “Trump Army” to fudge the unemployment figures? Is this Trump Army going to turn on the US Army should Trump lose? Did Trump just add 2.4 million people to the CIA payroll?
Where are all the missing jobs?
“trump Army” = Suckers and/or Losers
Arizona and Colorado senate seats no longer require money from Democrats in order to flip those seats. Money can now be diverted to North Carolina, Georgia, Maine and Texas races. Trump is in big trouble and had another relatively bad week.
It’s all good… him and PootyPoot have ratf**ked the appropriate departments. How people vote won’t matter in the slightest.
Flip the senate and there is an impeachment trial waiting for him if he steals the presidency.
I woke up and did my morning routine only to realize when I sat down to Mish Talk that it was 3 in the morning. Oh well, when I woke I was thinking something leftover from a dream. Notice in the last four years Putin has never really engaged the US? Never demanded or even asked or negotiated for anything at all. Nothing, it is as though once Trump took over we ceaesed to exist. He deals with China, Europe, Japan even, but it is like we are not even here. Even when he denies things like shooting down jetliners he aims the denials at the EU or others, never addressing the USA in person. The russian ambassador does not even go to the state department to register objections or complaints. Nothing, US/russia relations are a total void except when Trump meets Putin behind closed doors on trips abroad.
Why do you suppose that is?
Probably because Putin does not have to engage with Trump in office, he just has his orders transmitted to Trump and they are carried out. And Trump is also required to defend Putin in the process. Latest example, Trump denies there is ANY proof that Alexie Navalney was poisoned by Putin with Novichok. And it would be on the orders of Putin himself, Novichok only was made by the russian military, it does not exist anywhere else, and only Putin has the authority to use it.
Tell that to Angela Merkel who said in no uncertain terms that Nevalney has traces of Novichok in his system. Trump’s defense of Putin, his baseless claim that there is no proof, it means that he just called Merkel a liar. In order to defend with no evidence the Tsar.
I will tell you once again that Trump is a russian agent. Coopted long ago with compromising intel he was recruited with the KGBs carrot and the stick methods, you work for us you get rewarded, you refuse you get exposed. By working for them he only gave them even more leverage over him, and his psychological profile told them he will never EVER risk exposure by disappointing them. And part of that threat is if you FAIL we will expose you as well. That is their way to assure that he has his whole heart into doing the job as they want it done.
When he loses the election he knows the democrats will have him defending himself from one indictment after another the rest of his miserable life, but that is not what REALLY scares him, he knows he will be exposed by Tsar Vladimir.
It will be a calculation on Putin’s part and the one side says no, do not expose him since that would reveal how deep the Kremlin’s tenticles got into America, and would make russia an enemy for generations, as well as tell us what we must do to repair our security. Sort of like how we hear things but are not told how they know because it could compromise our intel assets.
The only real argument against this is if they have other assets they are positioning to later be Manchurian Candidates, in case they want to do this again. I am starting to think that Epstein was a russian agent, probably not to start, but the russians managed to get enough on him to get him to work with them, the man had no morality so would not have had any moral objection once in a position where he could not say no. Everyone that knew him is now a russian asset. How else do we explain his mysterious murder inside a secure detention facility supposedly under 24/7 camera surveillance?
On the other side once Trump is finished as a useful tool to him Putin will have one last opportunity to inflict severe damage on this nation, by revealing all the dirt on Trump and making it known he has been leading the US down the garden path via his own agent – the US would be devastated. It would make the office of president untrustworthy and elections doubted for a lifetime.
What does he have to lose? He got what he wanted from Trump, most of it anyway, probably far more than he actually thought he would. Though it is his greatest hope to get revenge for the fall of the USSR which he loved by breaking up America the same way, ending forever the unipolar ability of the US to pretty much manipulate the world.
How did we defeat the old Soviet Union? Basically we caused it’s implosion by bankrupting it. Now look at our financial position since Trump took over. He, and Moscow Mitch especially, are on record saying the states and localities just need to go bankrupt, and who would be hurt by that? Mostly pensioners. Certainly blue states and cities.
So I predict that on or very near January 20 of next year we will see a flood of evidence that will be leaked that proves Trump is a russian agent. Those on the right with Trump worship issues will simply refuse to believe it even though the proof is presented, they will go insane, I mean a lot of them will literally go clinically insane. And they will act out, pointing their weapons at whatever is convenient. They will impute some liberal plot out of it all. It will be proof of some amorphous whispy deep state headed by Soros and Clinton, like everything else.
The bottom line will be the same, Putin seeks the destruction of the US and he is NOT playing a game, he is dead serious and we ignore it at our nation’s risk.
Yep. Putin has been planning this for 2 decades. He keeps trying asymmetric warfare tactics. I wouldnt be surprised if Trump announces he is surrendering the US to Putin and tell us that Russia has subs at all of coasts and he has no choice. Nothing would shock me at this point and it should not shock anyone. We are in the worst kind of war – the kind the enemy is fighting and has convinced most people there is no war.
Garbage in, garbage out. What else is new.
Donald Trump himself said the employment numbers were fake before he occupied the Oval Office. Why should we believe his numbers now?
Because he says ‘believe me’ and spreads his hands.
I wish more people could remember things that happened four years ago. It’s like we’ve decided to emulate the main character from Memento as a nation.
America is getting Greater again, in fabricating good-looking numbets!
One Nation under the pagan god of progressivism!
From Treasury Department
unemployed benefits paid
July … $109.418 billion (when $600 week extra paid)
August … $53.780 billion
Why only add 3 million from 13.57 PUA claims to get an adjusted unemployment rate? Can you work some hours and receive PUA? Thanks
yes, you can work 30 hours
If you cheat, 60
I agree the unemployment rate numbers are total garbage, but will they be used to reject or severely limit any further stimulus package? With unemployment dropping this fast can Congress justify spending trillions more without admitting the numbers are garbage? If there is no further stimulus, the “financial cliff” Mish discussed a few days ago may come into play in a big way well before the election.
BLS manipulates the numbers? Well…at least one American tradition continues without abatement.
It seems to work, as far as supporting bubble markets that would otherwise have to be re-priced to reflect reality…….and we can’t have that happen. It’s been effective since 2008. Why change something that works.
In a month or two these numbers will be revised……but nobody will be paying any attention….other than a few wonks.
Less than 5% of unemployed are actually counted as unemployed,95% of unemployed are classified as “out of the labor force”,they use that scam to keep the numbers down and not payout UE benefits. Just like the inflation “rate’ scam,they xclude virtually everything that’s goes up in price LOLto keep the rate down so SSA COLA never rises same with the GDP “rate” scam! Obama perfected this scam,and Trump has now embraced it!
The real number is 18+%. Wolf has already done the math…
It’s all in the service of the market and election campaign–changes included with rose’ glasses.
Bottoms up!
Funding resolution deal in the works to prevent a shutdown (Congress fails again to do their duty)!
Hints of a a new round of stimulus (Congress fails to do its duty)!
Trump salutes general (whoops, that was the NK general)!
“Trump salutes general “
Well, Fat Donnie from Queens is not going to salute the losers and suckers in the US military.