BLS Jobs Statistics at a Glance
Details from the monthly BLS Employment Report.
- Nonfarm Payroll: +638,000 to 141,720,000 – Establishment Survey
- Employment: +2,243,000 to 149,806,000– Household Survey
- Unemployment: -1,519,000 to 11,061,000- Household Survey
- Baseline Unemployment Rate: -1.0 to 6.9% – Household Survey
- U-6 unemployment: -0.7 to 12.1% – Household Survey
- Civilian Non-institutional Population: +183,000 to 260,925,000
- Civilian Labor Force: +724,000 to 160,867,000 – Household Survey
- Not in Labor Force: -541,000 to 100,058,000 – Household Survey
- Participation Rate: +0.3 to 61.7% – Household Survey
Initial Reaction
Wow. That’s a lot of employment. The discrepancy between employment and jobs is 2,243,000 – 638,000 = 1,605,000.
The Bloomberg Econoday unemployment rate consensus was 7.7%.
BLS Error Rate
For March through September, BLS published an estimate of what the unemployment rate would have been had misclassified workers been included among the unemployed. Repeating this same approach, the overall October unemployment rate would have been 0.3 percentage point higher than reported. However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.
According to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify | survey responses.
I strongly question the accuracy of the BLS assertion that 0.3% is the high end of their error rate.
Job Revisions
- The change in total nonfarm payroll employment for August was revised up by 4,000 from +1,489,000
to +1,493,000 - The change for September was revised up by 11,000 from +661,000 to +672,000.
Part-Time Jobs
- Involuntary Part-Time Work: +383,000 to 6,683,000
- Voluntary Part-Time Work: +503,000 to 19,421,000
- Total Part-Time Work: +1,002,000 to 26,163,000
- Total Full-Time Work: +1,170,000 to 123,593,000
Employment Reporting Silliness
- Voluntary plus involuntary part-time work rose by 886,000.
- Total part-time work rose by 1,002,000
- Total full-time work rose by 1,170,000
- Total employment rose by 2,243,000
Don’t try to make sense of those numbers as they never add up. I list them as reported.
Unemployment Rate – Seasonally Adjusted – Long Term
Unemployment Details
- Unemployment: -1,519,000 to 11,061,000
- Survey Baseline Unemployment Rate: -1.0 to 1.9%
Nonfarm Payrolls Month-Over-Month
That chart is from the BLS. The title is inaccurate.
The chart represents jobs, from the Establishment Survey. Employment comes from the Household Survey.
Nonfarm Payrolls
That chart puts a much needed perspective on the recovery.
Hours and Wages
Average weekly hours of all private employees was flat at 34.8 hours. Average weekly hours of all private service-providing employees rose 0.1 hours to 33.8 hours. Average weekly hours of manufacturers rose 0.3 hours to at 40.5 hours.
Average Hourly Earnings of All Nonfarm Workers rose $0.04 to $29.50.
Year-over-year, wages rose from $28.24 to $29.50. That’s a gain of 4.5%.
The month-to-month and especially year-over-year gains are very distorted because more higher-paid workers kept their jobs than lower-paid employees.
Average hourly earnings of Production and Supervisory Workers rose $0.05 to $24.82.
In August, I reported “Average hourly earnings of Production and Supervisory Workers rose $0.18 to $24.81.” We are now a penny ahead of August.
Year-over-year, wages rose from $23.76 to $24.82. That’s a gain of 4.5%.
For a discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report.
For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.
BLS Covid-19 Statement on the Birth-Death Model
The widespread disruption to labor markets due to the COVID-19 pandemic and the potential impact to the birth-death model have prompted BLS to both revisit research conducted in the aftermath of the Great Recession (2008-2009) and incorporate new ideas to account for changes in the number of business openings and closings. Two areas of research have been implemented to improve the accuracy of our birth-death model in the CES estimates. These adjustments will better reflect the net effect of the contribution of business births and deaths to the estimates. These two methodological changes are the following:
1: A portion of both reported zeros and returns from zero in the current month from the sample were used in estimation to better account for the fact that business births and deaths will not offset.
2: Current sample growth rates were included in the net birth-death forecasting model to better account for the changing relationships between business openings and closings.
BLS will determine on a monthly basis if the adjusted birth-death model described here continues to be necessary. We will disclose these changes each month in the Employment Situation news release. All months in the tables of net birth-death forecasts on this page include footnotes for any month in which a regressor was used to supplement the forecasts.
The Birth-Death model is essentially garbage but we likely will not find how distorted this is until the annual revisions next year.
Table 15 BLS Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
The official unemployment rate is 6.9%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 12.1%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.
Strength is Relative
It’s important to put the jobs numbers into proper perspective.
In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.
Household Survey vs. Payroll Survey
The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.
The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
Recovery Will Take Years
The improvements are welcome but huge headwinds remain.
The economy has added 12.1 million jobs since the April lows.
However, jobs remain 10.1 million jobs below the February 2020 peak. Millions of those jobs will not return.
Those that do return will take many months.
Meanwhile, as deficits balloon along with Fed stimulus, so do the stock market bubbles.
Payback time of some sort for these distortions is on deck.
Mish
Oh how soon we forget the hourly vitriol brought down on the Thump and repugs for not giving trillions from our grandchildren to officially unemployed, keeping their incomes according to University of Chicago Study way above their previous incomes and the payoff to Sanctuary cities and states who can’t get enough taxes because people like Mish left Illinois and others because of high taxes.
Now, that Biden wins, feds go back and increase employment numbers for past two reports and report way above Wall Street the past month.
It sure helps to be a drunken sailor without a memory.
Spain unemployment is at 16%, and 40 % for under 25s …. plus they are shutting down the economy again now… plus including government subsidised furloughs would push the unemployment rate to somewhere over 40 % I think
Courtesy Matthew Bennett
Have to look up some Beatles for you…
Irony… the original is only available online from Russia…
My company supplies parts and subsystems for Boeing and Airbus planes, and sent out an email this week that “furloughs” and salary cuts would continue into 2021. The company added that executives would be offered buyout packages. This year the furloughs were one day every two weeks for 6 months. That way the company wouldn’t have to pay for unemployment claims that employees could make for a continuous 2+ week furlough.
So, I would expect the unemployment rate to bottom well above that of the last cycle.
I wonder if Mike Bloomberg will be as influential in selecting Biden’s cabinet as Charlie Koch was in picking Trump’s……I actually hope so.
I think Bloomberg’s aim was to get Trump out at all costs, no matter how much it cost or however he could accomplish that. And I admire him for doing everything he could….even if he sucked in the debate and his own campaign was weak..
He gave so much more than anybody else to fund Biden. I expect his voice will matter.
I spent some time today looking at the Biden donors list…..seeing who runs and funds the big PAC’s….it’s what you’d expect. The Clinton/Obama machine was at the core, of course.
But Bloomberg is not Biden’s only billionaire backer.
James Simons, big Wall Street hedgie.
Dustin Moskovitz, Facebook founder.
They both gave a ton of money.
Lots of trial lawyers. Lots…..
God I love being ruled by New York billionaires. They are sooooooo cool!
Yep. They will be making all the decisions for Joe. You do not give that type of money without expecting something in return.
They’ve been shamelessly manipulated for what seems like forever now…..at least since 2008-2009. At least it seemed to get much worse after the bank bailout.
Always the happy headline….but with a certain stench detectable to anyone with a nose.
It’s economic management by Happy Talk. If enough people read the good news and believe, it….then consumers will spend money again and everybody can make a buck. Fake it till you make it.
Sometimes it works, more or less. Unless you personally are someone who drops out of the workforce and becomes one of the forgotten ones.
Well in this case the models developed by the BLS did not take into account what would happen in a pandemic. Strangely if they had and a pandemic did not occur it would have been a “waste of money”
Employment UNemployment stats are now just about as trustworthy as CPI data, as in I have no faith in it at all.
Economy? Jobs?
I read this comment from a doctor yesterday…
….I don’t think people are grasping what it means that yesterday there were 100,000 new cases of something that GROWS EXPONENTIALLY….
I wish it had all been a hoax that disappeared after election day.
What do you think will happen with the economy and jobs in the next few months?
Much of Europe is heading into, or is in shut-down.
When in danger, when in doubt. Run in circles. Scream and shout.
Private Payrolls Rose By 906,000, But Are Still Down 9 Million Since February
– November 6, 2020
Illusion of a Horse Race
I know Florida counts their absentee ballots first. They put it in to specifically avoid fuck ups like we see in some states which I won’t name.
Without another stimulus, with the current one ending at the end of the year, Im sure the unemployment numbers will improve as a result of so many people dropping out of the workforce. Correcting this mess will take years, but, one positive to this, volatility in interest rates should be minimal and easier for investors to account for that component of risk
I think if government gridlock preventing a massive 2-3 trillion stimulus is not sent out by Thanksgiving the fed will take matters in their own hands and tell banks to start forging portions of revolving and mortgage balances. They have demanded government act for months now and we are headed back into a third wave (already there really) and that will mean more economic damage, not to mention the damage Trump will do when he vandalizes the economy to create a major mess for dems. I mean in excess of the damage he has already done.
“tell banks to start forging portions of revolving and mortgage balances” – This is not a practical solution. The explanation involves servicers and a whole entire set of massive issues, the lender and debt capital markets, particularly the MBS market. This, in my opinion, would freeze the market and create an entirely different set of very large problems. They could dictate this, but the fed would then need to expand its balance sheet to commit to purchasing MBS securities to backstop losses. This is impractical. A stimulus passing is the best alternative. If it doesn’t pass, then other options could be explored, like states issuing muni debt with the Fed as the buyer (if your expanding balance sheets, in theory this would work as the Fed should be agnostic to what it buys). Im not sure this would pass the muster though.
Amazing how so many people find work just when their unemployment benefits are about to expire.
Well, we had massive weeks of layoffs and firings of huge blocks of the population 6 months ago, and so you could look at the calendar middle May and see that middle November would have massive blocks of population falling off unemployment rolls. That does not mean they now have jobs, just that they no longer get a weekly UI check. If you trust that survey to have any accuracy at all as to those that did go back to work then I need to ask why we had to have the election when we could have just had a survey or went by polling data. Hey, I doubt anyone here seriously believes government data when it comes to prices/CPI, why should UI be any different. They used to adjust policy to the data, now they adjust data to the policy.
kudos to Trump? the fed? Or is it just nice weather out? Or something else?
Drove up the freeway to my workplace for the first time in months, to pick some stuff up, and it was full as ever. Everything seems fairly normal. Working in the office is actually really nice now that it’s quiet.
So the freeway was full but the office was quiet? So where were all the people on the freeway going?
I drove a 45 mile round trip on 101 freeway in San Mateo county, CA yesterday and traffic was extremely light coming and going. I also stopped by Costco and it wasn’t very crowded (and they are bringing back snack handouts!).OTOH, Home Depot was quite full as was Smart & Final.
I have no idea where they went. My little office park is almost completely deserted.
Yesterday I had to go to Reston VA to visit the bank branch around 9am. Normally the toll roads are are a nightmare, but there was no one on the road. Saw all the construction cranes and wondered who would be filling those offices.
Can’t believe that the BLS is still using phone surveys to derive this mess of a number.
I say that because I myself am unsurveyable. With my nifty smart phone, if you aren’t in my contact list, you automatically get bumped to voicemail. If you happen to get though, I hang up once someone starts speaking and I realize its a marketing/survey call.
I have to believe that it is much more difficult to accomplish surveys days, and I wonder if they aren’t just calling the same tried and true people who happen to have answered previous survey calls. Who knows, but there needs to be a much better approach.
And one more thing, please don’t call me and ask me how much I could rent my house for, because I have no fr#@*king clue!
Phone polls are the cheapest wave to poll especially if it’s a robot that asks the questions. Serious polls are very labor intensive and very expensive. The absolute cheapest is the internet poll. You get what you pay for and often it’s still garbage.
Just want to say near the top, if anyone else runs an adblocker, like I do, then whitelist Mish’s site. He deserves it.
Thanks for the suggestion, I do and after all this time forgot to WL him.
What’s “Really” Behind Gross Inequalities In Income Distribution?
The solution is sound money, elimination of the Fed, the end of public unions, and minimal government interference in the free markets, not income rules, not misguided regulation of banks, and not more debates about how to measure something that cannot be measured.
Here we are 12 years down the road from 2008 (when I started reading you, more or less)…..and the Fed is still here. the banks and Wall Street still get unlimited cheap credit, and unions have bankrupted cities and states, but they’re getting bailed out, and probably will continue to keep the union retirement Ponzi going for a while.
You say people who took big gambles and won are the explanation for wealth inequality. My response would be that it isn’t that big a gamble if you in advance how the game is going to play out. And failure to gamble, to date, has not been a great strategy.
Gold, to now, has only been insurance…it will only ever be insurance….and like life insurance, you only collect it when something really bad happens.
We can surely see that the game of fiat money and fractional reserve banking has to end in tears……but in the mean time old people have to be able to live on some kind investment. So forgive me for taking some small gambles…..it seemed like the best alternative at the time.
Forgive my typos….edit not seeming to work again today.
Moral hazard is some kind of punchline to a bad joke these days.
Say, for instance, if you’re Boeing. Do you squirrel away $43 billion dollars for a rainy day in case something?
Why would you, that’s absurd! The government will bail us out if we really got into trouble. Instead let’s spend it on stock buybacks.
It’s not free market capitalism is nobody is allowed to fail, and if nobody is allowed to fail it will only encourage more bad actors. We’re papering over huge sinkholes of bad debt and praying it goes away. In the process we backstop inflated prices of assets like homes making it so that the younger generations, already saddled with student debt, can’t reasonably afford them.
It has gotten so bad that people like me, who would otherwise be a staunch fiscal conservative, is wondering what is the point? The Republicans don’t seem to care about deficit reduction, only tax cuts. The Democrats want to tax and spend, but at least they want to try to pay for the spending, which in a sick way is more fiscally conservative than the tax-cut and spend plan of the GOP.
One of the major crises of the Roman Republic, was land reform. High centralization of land ownership into a few hands made it hard to maintain the military, since at the time one had to be a landowner to serve in the legions. Large plantations owned by optimates and staffed by slaves displaced the smaller farms, and the lower classes were forced to migrate to the cities.
I wonder if we’re repeating a similar crisis here with capital inequality. I don’t think wealth redistribution is the answer, but at least we can put an end to the unequal corporate welfare system where we give billions in free money to corporations that don’t need it, or wouldn’t need it if only they had saved for a rainy day.
Looking good, Lewis. I think the problem with saving for a rainy day is that a capitalist piracy firm (e.g., Bain, etc) will come buy you with your own money. They will get some pirate bankers behind them, do a proxy fight to gain control of the company, declare giant special dividends for themselves ( more than the takeover target’s original cash fund was), then spin the gutted company off with tons of debt. Companies have learned to not keep any cash laying around.
Sorry, I can’t edit the Lewis to Louis! Mea culpa!
great work Mish … get some sleep !
Super nice of the a-hole to leave Biden a roaring economy!
32% of unemployed have been unemployed for 26 weeks or longer.
I will have charts on that shortly
Still catching up – very delayed today
Very understandable