The numbers provided by government
The government reported that the economy added 236,000 jobs in February, 2013. At the same time, they revised down the numbers for the last 2 months—Jan ’13 and Dec ’12.
Let let us look in the numbers released by the Bureau of Labor Statistics (BLS) to see the real state of employment (click here to access data prepared by the BLS).
(Numbers in thousand—all figures are seasonally adjusted)
Dec Jan Feb
Civilian labor force: 155,511 155,654 155,524
Employed: 143,305 143,322 143,492
Unemployed: 12,206 12,332 12,032
Unemployment rate: 7.8% 7.9% 7.7%
Not in Labor Force: 88,839 89,008 89,304
Not in Labor Force—
But want a job: 6,750 6,631 6,821
—while the number of employed persons increased by 170,000 (143,492 – 143,322), the number of unemployed people decreased by 300,000 (12,332 – 12,032). The reason for this is that the government counted 296,000 more people not in the labor force (89,304 – 89,008). Hence, the number of people not counted in labor force but wanted a job—and could not find one—increased by 190,000 (6,821 – 6,631)
—true number of unemployed persons: 18,853,000 (12,032 + 6,821) in February as compared to 18,963,000 (12,332 + 6,631), a decrease of 110,000.
—while the civilian work force increased by 143,000 (155,654 – 155,511) in January, this number decreased by 130,000 (155,654 – 155,524) in February. This number—together with counting 296,000 not in labor force—helped the government “improving” the unemployment rate down to 7.7%
The good, bad and ugly news in the employment market
The good news is the true number of unemployed decreased by 110,000 in February.
The bad news is the number of part-time workers increased by 444,000 (18,908,000 – 18,464,000)—an indication that most of the added jobs were part-time jobs.
The ugly news is the number of the people that the government count as not in labor force. In Feb 2013, the administration tried to convince Americans that there were 89.3 million not in the labor force—as compared to 87.6 million in Feb 2012. In a year, 700,000 were dropped off the labor force. However, the number of people not in the work force but wanted a job increased from 6.4 to 6.8 million—an increase of 400,000.
Watch for March and April
By counting a high number of people not in the work force this month, the government delivered a very improved unemployment rate. In the next 2 months, it will be interesting to watch these numbers as the government may add back the people from not-in-the-work-force…and then blame the jump in unemployment rate on sequestration.