Thursday, October 13, 2011

Mike Gimbel: First time unemployment figures - some thoughts

Hi All,
As most of you are aware, I keep close tabs on the weekly first time unemployment claims.  I mainly look at the actual, not the seasonally adjusted figures, reported by DOL.  I compare the weekly figures, on a line graph, to the weekly reports from the same weeks in previous years.
As most of you also know, I also keep close tabs on the monthly employment statistics, as reported by the Bureau of Labor Statistics (BLS).
One minor complaint about the Dept. of Labor (DOL) press releases on the weekly unemployment claims. They scew the press release to be as positive as possible, in this manner:  Last week they reported 401,000 first time unemployment claims.  This week they reported 404,000 first time unemployment claims.  That's a rise of 3,000 claims, but the DOL stated that there was a DROP of 1,000 first time unemployment claims from last week.
What is going on here?  Has math been revised?  No.  What the DOL does every week is revise the previous week's numbers, usually upwards.  They revised last week's numbers from 401,000 to 405,000 in this week's report and announced that there was a 1,000 drop from last week to this week's 404,000 total.  This is a lie! They will likely revise this week's 404,000 upwards as well and then, even if there is another rise in claims, they may be able to announce a week-to-week decline, or at least a bigger decline than really occurred! If they were honest, rather than spin doctors, they'd report the difference between last week's announced numbers and this week's announced numbers. My complaint about this minor spinning of the truth isn't all that hugely important, as compared to the truly huge doctoring of the unemployment rate done by the BLS, whereby they report a 9.1% unemployment rate, when it is actually double that figure. I just hate to turn on the propaganda networks, inappropriately called "CNN" or "MSNBC" or whatever, and have them announce the 1,000 drop, when the actual number is a 3,000 increase!
Now for the MEAT of the reason for this message:
The BLS doesn't care whether the worker is full-time or part-time when reporting the overall employed vs. unemployed, that is used to announce the 9.1% unemployment rate. They put the fulll time vs. part time data in a separate set of lines in their monthly report.
My question:    If you have already fired ten's of millions of workers, then where do these new unemployed first-time claims come from?
I've been looking at my line graph, watching week-after-week, the line staying stuck in virtually the same spot. This is puzzling to me. How so? With ten's of millions already laid off, shouldn't there be fewer and fewer layoffs just to stay steady in terms of the overall unemployment rate? But the unemployed first-time claims figures have levelled off, rather than dropping, as they should have. This indicates huge numbers still being continuously laid-off, in addition to those already laid-off.  This economic depression has resulted in a stasis whereby a paralysis has set in and the horribly high unemployment rate is virtually steady.  Hires are balanced by the fired. For such a high level of first time unemployment claims to continue, in every week of every month, there must be a huge number of hires to match those fired, for unemployment to remain somewhat steady at September's horrendous 18.04% (23.46% when including the underemployed).
There does not appear to be any boom in full-time employment hires. So what is going on here? I am suspicious! Could this be a case where much of the first-time unemployment claims are coming from part-timers, who are hired on a temporary basis? Perhaps, but I don't think so.  I believe that the majority of first-time claims come from full-time workers, although my being wrong about this still wouldn't answer the question.  Could the majority of those hired, that are balancing those fired in the BLS data, be just for part-time jobs - or - temporary full-time jobs, after being fired from their full-time jobs?  There is some indication of this in the BLS report data, as I indicated in my previous email, but I am uneasy because this may be too simplistic an answer. I just don't see enough hiring going on, to match the firings, so as to keep the unemployment rate somewhat steady. Logically, these continuously high weekly first time claims ought to indicate a continuous spiking upwards of unemployment, yet the unemployment rate remains virtually the same from month to month. Let me repeat:  There has to be HUGE HIRING totals each and every week in order to match the firing totals in those same weeks! Where are these new jobs?
What is going on here?  The data doesn't make sense to me. Could the real story be even worse than what I have gleaned from the monthly BLS unemployment data? Where are all these new jobs that are balancing out the laid-off, in the BLS and DOL data? Something SMELLS!
--Mike Gimbel
The stupidities and absurdities by which mathematicians have rather excused than explained their mode of procedure, which remarkably enough always lead to correct results, exceed the worst and real fantasies of the Hegelian philosophy of nature.
                                                                  --Frederick Engels

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