The most recent employment report by the U.S. Dept. of Labor looks good on the surface. But let’s dig into the numbers of the latest jobs report
With so much uncertainty about the direction of the economy in 2012, everybody jumps at the slightest possibility of good news. Investors, employers, politicians, business owners and job seekers all want good news.
The most recent Employment Situation report by the Bureau of Labor Statistics indicated that we added 243,000 jobs during the month of January and the official unemployment rate dropped to 8.3 percent.
This report, issued by the United States Department of Labor on Feb. 3, contained several anomalies and important details along with the headline numbers. Let’s decipher these before confirming if it is good news for job seekers.
How it works
The Employment Situation report uses two surveys to obtain its results. The household survey helps calculate the unemployment rate. The establishment survey is used to calculate job creation.
BLS forecasting models use the data from these surveys to produce the report. The model is transparent. It’s not a black box and anyone with the desire and Excel expertise (with some add-ins) could recreate the reports.
What the household survey tells us
The unemployment rate declined 0.2 percent during January. This means that as of the end of the month, 12.8 million people were classified as unemployed. But this number doesn’t tell the full story. Nearly 43 percent or 5.5 million of those have been unemployed for at least 27 weeks.
In addition to these 12.8 million people, another 8.2 million were working part-time, and not by choice. They either can’t find full time work or had their hours reduced.
During the past year, 2.8 million people have looked for work at some point but have given up hope of finding a job and stopped looking. Or, they temporarily stopped looking for work for a personal reason. They aren’t counted as unemployed because the definition of “unemployed” means that you are available and actively looking for work.
