Birth/death adds 184K of the 146K jobs
18,000 jobs lost
BLS: Cooking in Plain Sight- www.urbansurvival.com
Happy Hype Day! Look for the market to go up on reports that go like this one: "Hiring around the country picked up slightly in June with employers adding 146,000 jobs -- helping to push the unemployment rate down to 5 percent, the lowest in nearly four years."
Well, not quite. You know about the Birth-Death Model which the Bureau of Labor Statistics uses to "correct" it's employment figures, right? So this morning I get a summary from a hawk-eyed reader who sees BLS headlines and then goes looking for the statistical chain which has been jerked to get the numbers reported:
"BLS says 146,000 new jobs in June 05, but 184,000 of those jobs came from the CES birth-death model.
The CES model must take into account all those new independent contractors created when employees get canned by GM and so many others."
If you doubt and need the source this statistically hip reader cited, check the following BLS chart:
To our way of reading, that would imply that the economy lost 18-thousand jobs in the period, not the 146,000 gain which the wet nurse media report. And our favorite number, the U-6 table under Alternative measures of Labor Underutilization reflected a jump from 8.6% to 9.3% from May. That said, now you know how to read the official press "happy talk" release about June's job numbers:
THE EMPLOYMENT SITUATION: JUNE 2005
Nonfarm employment increased by 146,000 in June, and the unemployment rate continued to trend down, reaching 5.0 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the month, payroll employment continued to grow in several industries, notably professional and business services and health care.
Unemployment (Household Survey Data)
The jobless rate in June was 5.0 percent, seasonally adjusted. It has trended downward since February 2005 and is now 1.3 percentage points lower than its most recent high in June 2003. The number of unemployed persons was little changed over the month at 7.5 million, but is down by 1.7 million since June 2003.
The jobless rates for most major worker groups--adult men (4.3 percent), adult women (4.6 percent), whites (4.3 percent), blacks (10.3 percent), and Hispanics or Latinos (5.8 percent)--showed little or no change in June. The unemployment rate for teenagers edged down to 16.4 percent over the month. The unemployment rate for Asians was 4.0 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed persons--those unemployed 27 weeks or longer--fell to 1.3 million in June. This group accounted for 17.8 percent of total unemployment, down from 20.1 percent in May. (See table A-9.)
Total Employment and the Labor Force (Household Survey Data)
In June, total employment (141.6 million) and the civilian labor force (149.1 million) were essentially unchanged. The employment-population ra- tio held at 62.7 percent, and the labor force participation rate was little changed over the month at 66.0 percent. (See table A-1.)
Persons Not in the Labor Force (Household Survey Data)
In June, 1.6 million persons were marginally attached to the labor force, compared with 1.5 million a year earlier. These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. There were 476,000 discouraged workers in June, essentially the same as a year earlier. Dicouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. The other 1.1 million marginally attached had not searched for work for reasons such as school attendance or family responsibilities. (See table A-13.)
Industry Payroll Employment (Establishment Survey Data)
Total nonfarm employment rose by 146,000 in June to 133.5 million, season- ally adjusted. This followed job gains of 292,000 in April and 104,000 in May (as revised). Over the month, professional and business services and health care added jobs, and manufacturing employment declined. (See table B-1.)
Professional and business services employment grew by 56,000 in June, fol- lowing little change in May. This industry has gained nearly a half million jobs over the year. Within the industry, architectural and engineering serv- ices employment rose by 9,000 in June. Temporary help services employment was little changed; job growth in the industry has slowed since last October.
Health care employment continued to grow in June, rising by 25,000. Over the year, the health care industry has added 249,000 jobs. In June, job growth was concentrated in hospitals (12,000) and ambulatory health care serv- ices (11,000).
Among other service-providing industries, financial activities employment edged up over the month, as credit intermediation and real estate showed con- tinued strength. Employment in food services edged up in June after showing little change in May. Employment in child day care services rose by 8,000 on a seasonally adjusted basis in June, as layoffs were lighter than usual. Employment in warehousing and storage rose by 6,000. Air transportation continued to lose jobs, declining by 3,000 over the month.
In June, manufacturing employment fell by 24,000. Motor vehicles and parts lost 18,000 jobs over the month. Job losses in nondurable goods manufacturing were small but widespread, totaling 12,000. These declines were partially offset by a gain of 7,000 in computer and electronic products. Elsewhere in the goods-producing sector, both mining and construction employment continued to trend up over the month.
I do have to give credit to the honest people who work at BLS (to differentiate them from the pols in the place). They at least have published the birth-death model so a knowledgeable person can find the truth. Now if we could just wean the financial press from "press release madness" and get them to thinking again and asking real questions, rather than being a rubber stamp operation...
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