View Full Version : 1.2 Million People Fall of Labor Force.
<span style="color: #990000"><span style='font-size: 17pt'>Hows that "Hope & Change" working for you??
Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low
Tyler Durden's picture
Submitted by Tyler Durden on 02/03/2012 08:51 -0500
Bureau of Labor Statistics
A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.
Chart below shows it all - that jump is not a fat finger!
And Labor Force Participation:
This is the largest absolute jump in 'Persons Not In Labor Force' on record...and biggest percentage jump in 30 years.
>>>CLICK HERE FOR THE LEFT'S RESPONSE<<< (http://www.youtube.com/watch?v=eZGWQauQOAQ)
Possibly their greatest song.
02-09-2012, 11:44 AM
Not at all true. It's a statistical artifact.
See here for an explanation (http://www.politicalmathblog.com/?p=1697)
02-09-2012, 02:29 PM
This iz a worry. Thems 1.2 million workers better not fall tumble explode or jump anywhere near the san adreas.
And, again, the regime pees on your shoe and tells you that it's raining ... and you believe it.
02-09-2012, 04:19 PM
Did you read the link?
Several people who consider the ZeroHedge commentary generally correct call this information a misunderstanding of the data.
It's an annual correction, done at one time, from Census updates.
Here's a list of people explaining it. You may wish to ignore Paul Krugman's explanation, but you will find by reading further that also the Wall Street Journal and the conservative American Spectator also say the same thing.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">"1.2 Million" Number Comes From A Misreading Of The Jobs Report
Krugman: "We Have Rush Limbaugh, Fox, Etc., Claiming That A Step Down [In Working-Age Population Estimate] Somehow Implies Fake Calculations. Still Not True." In a February 5 blog post, Nobel Prize-winning economist and New York Times columnist Paul Krugman wrote:
First, about that jobs report: all the usual suspects have jumped on the routine BLS population adjustment to claim that the numbers were cooked. <span style='font-size: 14pt'>The real story here is that the BLS estimates unemployment based on a monthly survey; this tells us what fraction of workers are unemployed. To turn that into a number of unemployed, the BLS estimates total working-age population; but it updates those estimates only once a year. So there's usually a step up or down in the totals each January, signifying nothing.</span>
Back in the Bush years there were a lot of bogus claims of huge job growth reflecting a step up in the population numbers. Now we have Rush Limbaugh, Fox, etc., claiming that a step down somehow implies fake calculations. Still not true. And the thing that makes this so tiring is that they keep trotting out the same old bogosity, no matter how many times it has been refuted. [The New York Times, The Conscience of a Liberal, 2/5/12]
Economic Journalist Barry Ritholtz: "The Fact Is 1 Million People Did Not Drop Out Of The Labor Force In January 2012." In a February 3 post, economic journalist and Washington Post columnist Barry Ritholtz explained that those who are claiming that 1.2 million people dropped out of the labor force in January are misreading the Labor Department's jobs report:
So today following an otherwise pretty darn good jobs report, we get the usual perma-pessimists at Zero Hedge and Rick Santelli over at CNBC proclaiming that the report showed a drop of over 1 million people from the labor force in one month. Of course, as ususal, both Santelli and Zero Hedge have a real reading comprehension problem and completely missed that this million+ people isn't some new January phenomenon, but a result of the BLS using the 2010 census data to have more accurate data. In other words, the changes in the Household Survey to the various measures had taken place over the years prior to 2010, but for simplicity's sake, the BLS incorporates these changes into one month (which they clearly point out).
[T]he fact is 1 million people did not drop out of the labor force in January 2012. [The Big Picture, 2/3/12]
Private Sector Economist Brian Wesbury: Labor Force Participation Rate "Is Not The Negative Silver Bullet That Bearish Analysts Think." In a February 2 report released by First Trust Portfolios, economist Brian Wesbury, a member of the Academic Advisory Council of the Federal Reserve Bank of Chicago, explained that "the [labor force] participation rate is right about where it should be." From First Trust's report:
In his response to the State of the Union Address last week, Indiana Governor Mitch Daniels said that the "percentage of Americans with a job is the lowest in decades." This echoes the focus of many bearish analysts on the labor force participation rate, which is the share of the population that is either working or looking for work. Participation was only 64.1% in 2011, the lowest since 1983.
The bears don't care that in 2011 private payrolls increased 160,000 per month and the unemployment rate fell almost a full percentage point. They don't even care that the labor force actually grew. They argue that the labor force isn't growing fast enough and if it had grown as fast as population growth, the unemployment rate would be significantly higher. But, even though the labor force participation rate is the lowest in a generation, it is not the negative silver bullet that bearish analysts think. Data from 1995 and 2005 suggest the participation rate is right about where it should be. [First Trust Portfolios, 2/2/12]
WSJ: Population Growth Didn't Affect Unemployment Rate. In a post analyzing the jobs report numbers, The Wall Street Journal's Real Time Economics blog explained:
Today's jobs report carries good news on both fronts. The unemployment rate fell, and the employment-population ratio rose. That means the improvement in the labor market is real -- people actually found jobs.
The employment gain wasn't immediately obvious to some observers because of a quirk in this month's report. Every January, the Labor Department readjusts its data to account for changes in the population. The tweaks are especially significant in years like this one that take into account a new decennial census.
This year, the population adjustment makes it look like the employment-population ratio didn't change from December to January. In reality, the ratio improved by 0.3 percentage points. The gains were just masked by the population adjustments.
Here's what happened: According to the Census Bureau, the civilian population grew by 1.5 million people in 2011. But the growth wasn't distributed evenly. Most of the growth came among people 55 and older and, to a lesser degree, by people 16-24 years old. Both groups are less likely to work than people in their mid-20s to early 50s. So the share of the population that's working is actually lower than previously believed. Taking that into account, the employment-population ratio went up. The unemployment rate wasn't affected.
"There was not a big increase in discouraged workers," economist Betsey Stevenson commented on Twitter. "What happened was Census found a bunch of old people we had assumed died." [The Wall Street Journal, 2/3/12]
Time: "The Labor Force Numbers Stayed Essentially The Same." Time reporter Massimo Calabresi wrote:
Some Obama opponents are struggling to find a cloud in the silver lining of January's jobs numbers, which estimated that there was a 243,000-job boost and a big drop in the unemployment rate, from 8.5% to 8.3%, last month. Their biggest gripe focuses on the size of the labor force: As the unemployment rate has trended down over the last few months, anti-Obama commentators have argued that the official percentage for those without jobs is deceptive because the Bureau of Labor Statistics doesn't count those who have stopped looking for work. In Friday's report, they found a sharp increase in that group: More than 1.2 million people joined the non-job seeking pool of working-age Americans last month.
The demographic adjustments had no effect on the unemployment rate, says Mary Bowler, the resident expert in these matters at the BLS. And when it comes to labor force estimates, the steep jump in the number of those not seeking work came entirely from the census adjustment, which added 1.25 million people to that group. If you take out the census adjustment, the labor force numbers stayed essentially the same, as reflected by the labor force participation rate of 63.7%. In other words, the spike in the number of people no longer looking for work is entirely the result of some people at the Labor Department adding numbers to their spread sheets rather than an actual observed shift anywhere in the real economy. [Time, 2/3/12]
Even Conservative American Spectator Admits Claim That "Labor Force Dropped More Than 1.2 Million" Is "Simply Wrong"
American Spectator Blog: "The Claims Of A Big One-Month Drop In Labor Force And Participation Rate Are Simply Wrong." In a February 3 post on the blog of The American Spectator, a conservative publication, Ross Kaminsky wrote that it's "simply not true" that "the participation rate dropped .03 percent and the labor force dropped more than 1.2 million in the past month." From Kaminsky's post:
[ZeroHedge.com analyst and writer Tyler] Durden says that the civilian non-institutional population rose by 1.7 million month-over-month but doesn't mention that almost all of that increase was due to an adjustment by Bureau of Labor Statistics based on the results of the 2010 census, plus smaller annual adjustments.
From the BLS report:
The adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000. Although the total unemployment rate was unaffected, the labor force participation rate and the employment-population ratio were each reduced by 0.3 percentage point. This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force participation than the general population.
In other words, the participation rate (employment-population ratio) was reported to have dropped by 0.3%, exactly the amount of participation rate "drop" created by changing the population number used in the calculation (due to updated census data.) Without this once-a-decade adjustment, the change in participation rate would have been reported as...wait for it...zero.
I don't want to overstate the significance of Durden's oversight, which conservative voices around the media and the web are also making, namely the idea that the participation rate dropped 0.3 percent and the labor force dropped more than 1.2 million in the past month. Those things are simply not true no matter how loudly people scream "conspiracy" and "propaganda." (Having been trading financial markets for about 25 years, I've heard these same accusations about economic data being manipulated to help the incumbent president -- whether Democrat or Republican -- so many times, they just bore me now.)
And while the actual participation rate might in fact be this new lower number, that would also mean that prior numbers were lower. In other words, the top-line change -- caused almost entirely by using new census population numbers -- is an artifact of the new census data, but few people have read to the end of the BLS report to get that important piece of information.
Furthermore, there are cyclical reasons that the participation rate shouldn't be as high now as it was a few years ago in a different part of the economic cycle, as economist Brian Wesbury (no liberal, he) explains.
<span style='font-size: 14pt'> Look, I don't like writing anything that is likely to benefit Barack Obama or his supporters. But the facts are the facts, and the claims of a big one-month drop in labor force and participation rate are simply wrong. If our side is going to call certain data "propaganda," the least we can do is make sure we understand the data.</span> [The American Spectator, 2/3/12, emphasis added]
Yes, I read the lame regime excuse.
At the very best it claims that the workforce shrunk by 1.2M over a little longer time.
The fact that the workforce shrank by 1.2M is unquestioned.
02-11-2012, 06:21 PM
Dude, wake up!
The boomers who are now in the process of retiring are set to double the retired cohort of the country, from 40 million to 80 million persons.
What does that mean in sheer numbers?
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every single day for the next 19 years.</div></div>
So, assuming ALL were previously in the workforce, and ALL who have reached retirement leave the workforce, what is the figure we'd assume would leave the workforce from 1/1/2011 until 1/1/2012?
365 x > 10,000 = > 3,650,000. Just last year.
Now, not all of them were in the workforce last year (2), and similarly, not all of them have left the workforce upon achieving 'retirement age,' (1) AND the working age cohort increases from the bottom up by about 95,000 a month (not all of whom enter the workforce).
But doing this math anyway, 95,000 new potential workers a month, minus 300,000 a month leaving it as of retirement age, is a 205,000 a month figure net out of the workforce, x 12 is 2.46 million out of the workforce annually, approximately.
Because of this and another demographic shift, the rise in the number of persons in their teens representing far more of those than before as a percentage of the population, you have the far larger percentage of the 'workforce population' in the two extremes of age most likely to be out of the workforce, the teenagers (with a 40% or so STATED UE rate (U-3, higher if you use the broader measures)).
The only amazing thing is a) it is not a much higher figure annually (not in one month, that is a most retarded take!), and b) despite the general knowledge of the vast retirement age hoard doing just that, you have no idea that the figure is only about 1/3rd what we might expect solely from those retirements alone.
I now pronounce this my most devastatingly effective argument in recent memory, LOL! (Although I will consider other nominees from the board.)
*citations relating to (2) and (1) above:
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> 2 According to another recent survey, 24% of U.S. workers admit that they have postponed their planned retirement age at least once during the past year.
1 Approximately 3 out of 4 Americans start claiming Social Security benefits the moment they are eligible at age 62. Most are doing this out of necessity. However, by claiming Social Security early they get locked in at a much lower amount than if they would have waited.</div></div>
From 'The End of the American Dream' (http://endoftheamericandream.com/archives/in-2011-the-baby-boomers-start-to-turn-65-16-statistics-about-the-coming-retirement-crisis-that-will-drop-your-jaw)
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">Dude, wake up!
The boomers who are now in the process of retiring are set to double the retired cohort of the country, from 40 million to 80 million persons.
What does that mean in sheer numbers?</div></div>
That the Social Security Ponzi scheme is exploding ... as you have denied in the past, until it is needed to protect your beloved regime.
Dance some more for us.
02-12-2012, 10:53 AM
Completely cheap deflection, and wrong.
The number of retired has always been growing from the beginning of the program 70 years ago. That doesn't make it a Ponzi scheme, or make it exploding. Anybody paying attention has known for a long time that the boomers would end up doubling the number of the retired population. The 40 million now has about 65 million to be added, and evidently, by the time that happens, actuaries indicate most of the first 40 million will have passed (25 million).
These facts haven't been in question, I have never denied them, and they still don't make it a Ponzi scheme, which is a question related to financing.
But in any case, it goes a long way to explain what is happening in the labor numbers.
To be most clear, that the number in the labor force dropped by this number is not the artifact. That is actually true.
The artifact is that this happened suddenly in one month. That is due to the vagaries of the technical way this is changed-- they do an annual catchup adjustment in one month.
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body"><span style='font-size: 26pt'>I MUST DEFEND THE REGIME!</span></div></div>
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">TRANSLATED:
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body"><span style='font-size: 26pt'>I MUST DEFEND THE REGIME!</span></div></div> </div></div>
One of your best posts. LMFAO.
Keep it up Snoopy.
Q..deranged is the word that comes to mind........
I wouldn't call sofa deranged ... merely brainwashed.
Powered by vBulletin® Version 4.2.0 Copyright © 2013 vBulletin Solutions, Inc. All rights reserved.