October 5, 2012 - 8:07 am
It’s always tempting to fall for conspiracy theories, because they explain everything in a nice neat package. So, naturally enough, a lot of people — including Jack Welch, who should know better — are suggesting that today’s unemployment numbers have been manipulated down.
In fact, if you look at the Bureau of Labor Statistics report, it’s unlikely that anything has been manipulated — which would be hard to do without being caught anyway — because you can see exactly how the change happened. Here’s the net-net:
- net 114,000 new full-time jobs
- net 456,000 people who left the unemployed list — discouraged or whatever
- net 600,000 people added to part-time workers.
What distinguishes part-time workers from full-time? In general, part-time workers don’t get benefits — like health insurance.
What these numbers seem to be telling us is that it’s too expensive to pay for benefits.
So under your theory of too much expense for benefits, the temp agencies ought to be busy. I wonder how you could find if that is true or not.
I have a similar theory, a bit larger, that job creators are holding back, like a capital strike, waiting to see if Weakman Obama can be voted out in November.
Just my opinion.
This has everything to do with the jobs outlook. And that’s just the point. Jobs won’t be added if Obama gets re-elected, they’ll be shed.
I wonder how you could find if that is true or not.
Kelly Services is publicly traded, and hasn’t been doing too well lately, for what that’s worth.
Throughout the recovery, part-time professional employment has consistently been one of or the largest job growth category.
Am not an expert, but it appears employers are NOT willing/able to commit to hiring full-time, permanent employees. Instead they’re outsourcing key functions to temp agencies and contractors.
These people/positions can be shed quickly and relatively guilt-free if the economy tanks and/or as other key costs skyrocket (Taxmaggedon, ObamaCare, fuel, electricity, supplies, materials, etc.).
I agree with RobertMN: If Obama is re-elected jobs will be shed.
re: temp agencies– yes, when I was following it closely a couple of years ago ‘staffing agencies’ were the first or second largest segment of all the job categories that were being created. According to BLS figures, if I recall. I assume that it’s still the same now. The mainstream media would spin this at the time as a ‘hopeful’ indicator that the economy was improving and businesses were needing additional staff, NOT that the businesses were laying off their regular employees and replacing them with a lesser number of no-benefit temps.
Temp agencies have always been like this. Most of them, in theory, have a health-benefits plan available (I think as required by law) but they limit you to around 1000 hours of work to stay under the threshold. Basically, you can work full-time for about six months. Then they just don’t give you any more work for the rest of the year. Been there, done that.
Most jobs, especially part-time, are found through personal networking not agencies. Temp agency jobs are likely to be full time with at least some benefits, thus fall out of the part-time numbers anyway.
Actually, the temp agencies will only be extra busy if new part-time employment is booming relative to previous part-time employment. But all we know from today’s numbers is that the new part-time job count exceeds the sickly full-time job count. Relative to historical norms, even part-time employment could be down.
Employers would know the price of a temp worker would include the worker’s benefits from the temp agency. A part time worker, sans benefits, would likely be cheaper than a full-time temp. From a financial standpoint, if a part-time worker would fill the bill, he would be the better choice, all other things being equal. So, I wouldn’t say it necessarily follows that temp employment has to be increasing also.
Perhaps this will help.
Whenever I want to get down to brass tacks on real info, I jump over to Powerline, NRO, HotAir and Commentary to see if they have anything I haven’t seen elsewhere. (I go to Ace as well, but usually when I’m in a rage)
Powerline rarely lets me down.
Paul Mirengoff (linking to Kevin Hassett) give us some key facts. There are two reports. One that the Propaganda and Lies Ministry never gave credence during the Bush era…but, is the one being promoted here.
Sometimes conspiracy isn’t a theory…it’s a crime.
Professional economists and the press usually emphasize the establishment survey because it is considered less volatile. This month, that survey continues to show the usual weakness in the job market. But the household survey purports to show massive improvement.
Hassett says that during the Bush presidency, the MSM discounted the household survey whenever it revealed good news, claiming that the numbers are suspect. I find the latest household survey numbers — coming just before the climax of this election and contradicting more reliable data — to be suspect, indeed.
http://www.powerlineblog.com/archives/2012/10/an-october-surprise.php
Gee Charlie, why couldn’t you figure that one out? A little too quick on the draw?
Many thanks to cfbleachers for the link.
Another interesting detail about the upwardly-adjusted numbers from previous months may have to do with an increase in government jobs — which would really sit well with the private-sector taxpayers and play into Romney’s hands regarding the expansion of government. Something to look into.
And, I went to NRO to find this…
The sickly, stagnant September jobs report
James Pethokoukis | October 5, 2012, 9:30 am
Is this the Obama October Surprise?
Only in an era of depressingly diminished expectations could the September jobs report be called a good one. It really isn’t. Not at all.
4. The shrunken workforce remains shrunken. If the labor force participation rate was the same as when President Obama took office, the unemployment rate would be 10.7%. If the participation rate had just stayed steady since the start of the year, the unemployment rate would be 8.4% vs. 8.3%. Where’s the progress? Here is RDQ Economics:
Such a rapid decline in the unemployment rate would be consistent with 4%–5% real economic growth historically but much of the decline is accounted for by people dropping out of the labor force (over the last year the employment-population ratio has risen to only 58.7% from 58.4%). We believe part of the drop in the unemployment rate over the last two months is a statistical quirk (the household data show an increase in employment of 873,000 in September, which is completely implausible and likely a result of sampling volatility). Moreover, declining labor force participation over the last year (resulting in 1.1 million people disappearing from the labor force) accounts for much of the rest of the decline.
http://www.aei-ideas.org/2012/10/the-sickly-stagnant-september-jobs-report/
A fair accounting doesn’t count a part-time job as the same thing as a full time job. You need to count the hours per week worked.
A lot of the problems we’re having now is that their methods have been deceptive for decades. That’s not egregious in “normal” times, when these numbers are to be used as indices that indicate the true state of the employment situation, but when we get into this grossly distorted job market that we have now, they don’t mean what we think they mean.
In any event, they aren’t to be taken literally. A part-time job is a half of a full-time job. Give or take a job.
I think it’s a “that depends”. A lot of people want part-time jobs, e.g. students.
The Bureau of Labor Statistics has 6 measures of unemployment; U-3 is the topic of this posting. Look at U-6, which tries to capture various sorts of discouraged workers plus those who are employed part-time but would like more; needless to say it’s high, at 14.7%, and unchanged from last month.
The Key Number in all of this;
•net 456,000 people who left the unemployed list — discouraged or whatever
If Obama could convince the other 7.6 percent to quit looking for work Unemployment would be Zero!
Yeah and there are a lot of (computer, etc) temp jobs that officially offer insurance and stuff through the temp agency, so I’m guessing they count as perm jobs, but it’s all fake and expensive, and you should really discount the purported salary as well since it comes with zero security, in fact scheduled termination usually well under a year.
I’m pretty sure that in over twenty years of working I have seldom counted as either employed or unemployed, and probably in the wrong category more often than not when I’m counted at all.
I wondered about that when I was consulting too, and no, when you’re consulting, you’re “employed” whether you get benefits or not.
It’s not too expensive, just uneconomic. The employee costs more than he’s worth to the employer, so the hire doesn’t happen.
Every tax, regulation or requirement narrows the disagreement gap between seller and buyer, the good being worth more to the buyer than to the seller so long as the disagreement is positive. The trade then happens and the standard of living of the nation rises by the amount of the disagreement. The disagreement is new wealth.
If the disagreement is negative, no trade happens and that job disappears.
Obama is the master of closing disagreement gaps, and is the disappearer of jobs.
It’s not too expensive, just uneconomic.
What?
Here’s an interesting take on the jobs report:
Conn Carroll, a senior writer at the conservative Washington Examiner suggested a slightly less nefarious form of manipulation of the data.
“I don’t think BLS cooked numbers. I think a bunch of Dems lied about getting jobs. That would have same effect,” he tweeted. “Would love to see the partisan breakdown of the 873,000 Americans who say they got new jobs.”
from http://money.cnn.com/2012/10/05/news/economy/welch-unemployment-rate/
and how many of the new jobs are working, directly or indirectly (hired demonstrators, etc) for campaigns? Thus to be gone in a month…
Did they actually call millions of people to discover 873,000 American that “said they got a job”. How in one month do you make that many calls????
Is this another statistical model with hair all over it?
what a shock.
who could have possibly imagined that unemployment would get under 8% by the election. I know I feel awfully lucky to have predicted it two years ago.
Of course, I also predicted gasoline under $3 by election day. At this point, it would take a miracle, and we know those never happen. Unless, of course, Romney destroys the Boy King in another debate.
Here’s another one to watch. The SS cola adjustment for 2013 is alway published in mid-October. The amount is determind by a formula fixed by law. It’s a virtual certainty to be below 2%, which for most retirees will be something under $30 per month, and is likely to be less that their payments for medicare premiums and Plan-D. I wonder how many people realize that the number is published in October. Probably not many. In any event, the Boy King wouldn’t unilaterally do something when that number is published, would he? I mean, that would be illegal and we know how much respect for the law the king has.
I think benefits play a huge role in the move to part time work.
My employer reduced a large section of full time workers to part time-in order to cut health insurance and paid holidays. They also reduced the sick time earned from 10 days per year to 3.
They saw a huge savings from this move. I can’t help but think other employers don’t see the same methods as a way to balance the books and either save money or make a profit.
Let’s assume that the numbers presented are completely valid. What Charlie has noted is:
1) Full-time employment is weak.
2) Part time employment is stronger than expected.
Charlie’s suggesting that this has to do with health care. Let me propose an alternate explanation:
A lot of part-time workers tells me that businesses are still facing a highly uncertain outlook, and don’t want to imply a commitment of full-time employment, at least until after the election. Part-time workers are a way to get the bodies in and the work done without making any kind of implied or legal commitment.
As long as there’s so much uncertainty in the business outlook, we can expect this to remain the new normal.
You are making an error regarding the 456,000. That is the number of people who left unemployment, not the number that left the labor force. The actual labor force increased by 418,000 (after declining 356,000 last month).
Also, you appear to be mixing the payroll and household survey data, but I could be wrong.
The household survey is signalling a very strong economy. The payroll survey is suggesting a weak economy. At least one of them is wrong.
Generally, I do not go in much for conspiracy, but this is an interesting quirk. The number of part time jobs in the household survey is EXACTLY double the number of full time jobs. http://www.zerohedge.com/news/2012-10-05/odd-arima-x-12-statistical-aberration That is one heck of a coincidence.
Isnt this the seasonal push for hiring anyway?
Didn’t Obama just issue an executive edict that collecting welfare now counts as a “job”?
In my area of flyover country, the temp services are going gangbusters. Time limited jobs and part time jobs. I know this since my wife goes through the services since Teh One took office.
Let’s get back to halucinating about a competent media. Some one this morning, asked the Secretary of Labor if these unemployment numbers were fudged. In a classic move, she got righteously indignant but NEVER responded to the question. With a decent media, she could huff and puff all she wanted but then would have to respond to the question!
Still not buying it Chaco.
When Rahm installed the new Head of the Census Bureau into the White House back in Feb. ’09, many were concerned with manipulation of the Census figures for redistricting as a result. Why bring up the Census Bureau? Simple, the BLS doesn’t have the capabilities nor the personnel to handle the 60,000 phone calls made during the reporting period. These are the calls that go into the Household Survey, which, coincidentally, is the basis for the Unemployment rate. They can’t do it, so they ask the Census Bureau to make the calls.
That’s one “Hmmmm.”
Here’s the next one.
The wily group at ZH picked off a RBS research piece that found the first ever outlier in the data. 20-24 yr olds went heavily back to work, instead of school.
And the loan data released this afternoon makes that a big one to swallow.
Check out the CV of the Head of the Census Bureau and see if he’s got the chops to hide a needle in a haystack.
The fact that the public discussion is over whether the published monthly BLS employment statistics should be 7.8% or 8.3% shows that the liberals have already won the debate. Who cares how many Americans have “jobs”? Think about this: If 100% of Americans had full time jobs that paid minimum wage (ie. a 0% unemployment rate) the total amount of federal income taxes paid each year would be ZERO.
The only thing that matters is the percentage of Americans that produce a net positive financial contribution to federal revenues. The only politician that I have heard clearly articulate this fundamental problem is Marco Rubio. He said, “The problem is not that we don’t have enough taxes, it’s that we don’t have enough taxpayers”.
BLS’ September 2012 unemployment figure of 7.8% (household incomes) defies all logic.
April 2012
1)Number of jobs created = 115,000
2)U-3 = 8.1%
3)U-6 = 14.5%
September 2012
1)Number of jobs created = 114,000 (net decline)
2)U-3 = 7.8% (net decline)
3)U-6 = 14.7% (net increase)
Conclusion:
In April 2012 more jobs were created (115,000) than in September 2012 (114,000)
In April 2012 U-3 was 8.1% yet in September 2012 U-3 was 7.8% (with a decline in job creation).
In April 2012 U-6 was 14.5% yet in September 2012 U-6 INCREASED to 14.7% (this data correlates to a decline in job creation).
What possibly can explain BLS’ ,September 2012, 7.8% data point?
BLS must be asking all Americans to believe in the tooth fairy, Santa Claus AND Peter Pan all in the same breath. September 2012 true figure will be revised to 8.2% (estimated) in December 2012 (after November 2012 election).
Truly shameful display of government AFSCME union complicit chicanery with a Chicago-style thuggery currently on full display for all Americans to witness. Pray. Amen.
In the first Summer Recovery the BLS juiced the household survey by saying that people were starting businesses or consulting. This is what happened this report. All of a sudden those that were unemployed became small business people. With no income, no taxes paid, nothing. So technically BLS didn’t straight up lie, they just put alot of unemployed people into business and off the unemployed rolls.
Charlie-
My apologies. I fully retract the clap trap I wrote earlier and will now accept any harsh words as fully earned. The shift was entirely a quarter end adjustment to payrolls before the 30 hour work week rule fines kicked in under Obamacare.
Sorry for the distraction.