Friday, February 4, 2011

No new jobs but unemployment is down, say what?

You've probably heard about the "screwy" government numbers on unemployment. The corporate media response is that "people have given up looking for work" and that drove down the unemployment rate. The truth is that both numbers, the disappointing 36,000 jobs created and the drop to 9% unemployment are created by surveys and are not hard numbers.

The jobs created number is determined by sampling employers to see if they are hiring or laying off. The problem with that number is that there is no way to predict which employers are going to create jobs. New employers aren't even polled of course. So when a recovery starts you always see a lag in the numbers as the new jobs are created asymmetrically throughout the workforce until things shake out.

The unemployment percentage is determined by surveying households and in theory shouldn't be affected by sampling bias if is the survey is big enough. The only problem that I see is that they may not be reaching people that have gone off grid like the homeless. This survey also estimates how many jobs were created and they say there were 600,000 new jobs in January. That would be great if true.

I wouldn't be surprised to see "robust" job growth. Jobs are not the real problem, unemployment is only a symptom of the disease. The patient may rally briefly but is still terminal.

1 comments:

Bukko Canukko said...

Prairie 2 -- I finally got through to your blog! I think you had too many Yahoo and Oogle and Kindle ads running or something, because your site was getting hung up from loading for longer than I had the patience to wait. And that includes setting it and forgetting it for the better part of an hour one midnight shift at the hospital when I had to go do some incontinence care (not on myself) and came back to the box to see it still hadn't loaded. Good onya for whatever you did to fix it.