Jack Dunn - Reclaiming Common Sense

A reduction in participation is masking the true unemployment rate. This column has proposed a new unemployment measure called the U-7 unemployment rate. The U-3 rate is the "headline" unemployment rate. The U-6 unemployment, or under-utilization rate, has received some attention since 2012. There are U-1, U-2, U4, and U-5 rates as well. We had a 4.62% U-3vunemployment rate during August 2007 with a workforce participation rate of 66.10%. This August we had a 4.53% unemployment rate. This should be good news. Unfortunately the non-seasonally adjusted participation rate was only 63%. A decline of 3.% in the participation rate is not the same as a 3% drop in the unemployment rate.  The effective unemployment for the entire population for 2017 was 9.39% compared to the 4.62% for 2007. The participation rate has dropped for virtually everyone under the age of 54. WE have more "missing participants" than unemployed workers for those under the age of 29 and for those 40-54 years of age. If we calculate the missing workers based on the changing participation rate between 2007 and 2017 then, because older workers are participating more now than during August of 2007, there are some age groups that have a negative U-7 unemployment rate.


The data is the data. This column relies upon the non-seasonally adjusted because the seasonal factors used to convert the non-seasonally adjusted data to the seasonally adjusted data change from month to month, season to season, and year to year. The unemployment level for "seniors" is pulling down the u-3 for the entire workforce. The 30-34 year olds are doing well, too. Those under the age of 29 are struggling. This is not really being reported elsewhere.  There are differences between sectors of employment as well. The article "Houston Jobs Pre-Harvey (Part 1)" and "Florida Employment, Unemployment Pre-Irma (Part 1)" examined the Super Sector data and the unemployment levels pre-hurricane. The local data for these two hurricanes will not be released for one and two more months, respectively. Friday's state and regional data was collected pre-Hurriccane Harvey. The September data is being finalized just today, so that data will not be released for 2 more months.because the Regional and State data lags the Employment Situation Report data.  The next article here will address the sector data a whole for August.


It's the economy.

The Number of Unemployed Workers has been falling - except not for each age group. We are not at record low unemployment levels for every age group. This column writes weekly articles on the weekly unemployment claims levels, first-time and continuing. We have been a forty to fifty year lows for these claims during the past few months. We have over 80 million more workers who qualify for unemployment benefits. We have more people unemployed between the ages of 30-34, 45-49, and 50 and up than we had during August of 2005. One month does not make a trend. Unfortunately, two hurricanes may cause an increase in unemployment across all age groups during future jobs report cycles.

A reduction in participation is masking the true unemployment rate. This column has proposed a new unemployment measure called the U-7 unemployment rate. The U-3 rate is the "headline" unemployment rate. The U-6 unemployment, or under-utilization rate, has received some attention since 2012. There are U-1, U-2, U4, and U-5 rates as well. We had a 4.62% U-3vunemployment rate during August 2007 with a workforce participation rate of 66.10%. This August we had a 4.53% unemployment rate. This should be good news. Unfortunately the non-seasonally adjusted participation rate was only 63%. A decline of 3.% in the participation rate is not the same as a 3% drop in the unemployment rate.  The effective unemployment for the entire population for 2017 was 9.39% compared to the 4.62% for 2007.

The August jobs report was released last on Friday September 1 at 8:30 A.M. EDT. The mainstream media was done analyzing the data by 9 AM. The report was not as strong as the ADP Jobs Report indicated it would be, end of story. This column analyzed the data for the next week.

  • "August Jobs Report Better than 2015, 2016" detailed how the Current Employment Statistic (CES) worker growth was better than August 2015 or August 2016. It also detailed how we lost non-seasonally adjusted (NSA) Current Population Survey (CPS) full-time jobs and NSA CPS Part-time Jobs. Unemployment dropped and participation dropped. This is called "the End of Summer."
  • "Five Presidents after Month Seven" detailed how President Trump has added more jobs during his first seven months than Presidents Bush 43 and Obama. While he has not added as many jobs as President Reagan, he has cut the number of unemployed workers more than Reagan. While he did not add as many Jobs as President Clinton, it appears that he has converted more part-time jobs to full-time jobs than President Clinton did.
  • "Multiple Job Workers Near Ten Year High" Details how we set a record for people working two part-time jobs last August, and that the decline in both the Dual PT job worker number and the overall total multiple jobholder number may be due to a conversion from multiple jobs to a single full-time job. It may also be that there was a surge in part-time hiring last Fall in preparation for the November 2016 election.
  • Men and women have recovered from the recession at different paces. Men lost over 10 million full-time jobs at the depths of the recession, January 2010. It took until July of 2016 for all of those full-time jobs to be recovered before they were lost again. "Women at Peak Full-time Employment" goes into further detail and calculates the U-7 unemployment rate for both men and women.

Another way to examine the data is by age group. There has been a ton of rubbish regarding how the decline in the participation rate during President Obama's two terms in office was due to Baby Boomers retiring and still being counted as part of the workforce population, This is wrong. We have more people over the age of 55 working now than has been recorded for the month of August. We saw a slight August to August drop in those over the age of 75. We continue to see a drop in the number of workers 50-54 years of age. The number of people 30-34 years old dropped slightly from August 2016 to August 2017. (This data is the CPS data which measures jobs - it does not differentiate between full-time and part-time jobs by age except for the teen population.)