Friday, February 5, 2010

Breaking Down the Unemploymnet Numbers

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs.

The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January at +203.000, reaching 6.3 million. Since the start of the recession in December 2007, the number of long-term unemployed has risen by 5.0 million.

The nonfarm payroll number for December was revised downward from -85,000 to -150,000

The continued growth in temporary help is indicative of how worried employers are about the current recovery , that is, they continue to use temporary help rather than bringing on new permanent help.

Most bizarre about the January number is that the notorious and mysterious fudge factor, the birth/death index. The January Birth/Death adjustment was -427,000 from +25,000 in December. Got that? Without the Birth/Death downward index adjustment (which is generally positive every other month) employment would have been up by an incredible 407,000. This no doubt is really an adjustment for those who lost seasonal Christmas related jobs, rather than a sudden January collapse in new business hires, with a good dose of direct hands on BLS adjusting to get a near flat unemployment number for January. The fudge factor man at the BLS is obviously one man who will never have to fear ending up on the unemploymnet line.


  1. Of what use are these numbers? and why does Wenzel waste time reviewing them?

  2. Maybe Wenzel is aiming at a larger audience than the enlightened group that you and I belong to.