Reclaiming Common Sense

There were 1.1 Million Full-time Jobs Lost during September

This week the September Forecast column projected non-seasonally adjusted full-time job losses, part-time job gains, a drop in the unemployment rate and a drop in the participation rate. It happened. This column also published an article saying that the government would set a record high level seasonal factor to skew the data higher. It happened.

Why should you read this column? The data was skewed to make everything sound good while it was really quite bad.

We Lost 1.164 Million Full-time Jobs and Gained 1.338 Million Part-time Jobs. A net gain, Right? No. Not Really. The data used to create the unemployment rate and the participation rate is the Current Population Survey (CPS)  Data. This same CPS data set counts the number of full-time jobs added or lost and the number of part-time jobs gained or lost. If we lose full-time jobs and replace them with part-time jobs then those workers are losing earning power.

We lost a comparable number of Jobs as we did during September of 2007. We lost 1.164 million full-time jobs this month and we lost 1.142 million jobs during 2007. The good news is that we did not lose as many full-time jobs as we lost during September of 2008 when we lost 1.343 million full-time jobs.

The Highest Level of Seasonally Adjusted Part-time Job Gains since September 2003. "All of Our Gains were Part-time Jobs." Whether you examined the NSA CPS data or the Seasonally Adjusted (SA) CPS numbers, we gained part-time jobs. The Loss of 1.164 million full-time jobs was seasonally adjusted to a loss of only 7,000 jobs. That is some adjustment. We do lose full-time jobs every September. We lost slightly more full-tome jobs this year than we did last year. We gained more part-time jobs than last year. We almost set a record for non-seasonally adjusted full-time job growth.

Unemployment recorded a Drop and Reported and Increase from August. We saw a similar decrease in the NSA unemployment number recorded and increase in SA unemployment reported during 2007, 2008, and 2009. This is not good. We have seen sizable drops in the continuing claims data and the first-time unemployment claims numbers during the past few months. The weekly data is different from the CPS data. We need to pay attention to both.

Workforce Participation and the Unemployment Rate both Fell. The good news is that the participation rate for September 2015 was higher than it was during September of 2015. We are not back to the level of participation that we saw during the pre-recession years. This trend of improving participation, same month, year over year, has been missed by many people because they are basing their reporting on the seasonally adjusted data. Live by the seasonally adjusted data, die by the seasonally adjusted data.

We gain jobs and Lost Workers. The second half of the data is the Current Employment Statistics (CES) data. The CES data measures workers. There are private sector workers and there are non-farm payroll workers. This column focuses on the private sector jobs number because the White House focuses on the private sector data.

They are Misrepresenting Reality. This is a polite way of saying that the statistics are False. Readers of this column know that it was forecasted that we would see a drop in workers this month recorded and that we could see a drop in workers reported. We had the same percentage drop in NSA CES workers that we had last September, and comparable to the drops seen during September 2005, 2006, and 2007.

Skewed Seasonal Factors. We are doing better with the Seasonally Adjusted Data that 2005, 2006, and 2007. How is this possible if we are doing comparably as well as we were then? The seasonal factor used to convert the NSA data to the SA data was the highest recorded since 1981.The forecast  column projected a seasonal factor of 0.9975733. This would have been the highest ever, after the highest ever last September of 0.997346. They used a value of 0.9977285. Normally you would not worry about decimals out that far. When you are dealing with millions of workers every digit matters.

Did we add 167,000 seasonally adjusted  private sector jobs or 33,000 private sector jobs? We grew at a Rate Comparable to Last Year - If we used other previous seasonal factors from 2012-2015 we would have added less than 100,000 jobs.

We are adding private sector jobs at a slower rate than 2011, 2012, 2013, 2014, and 2015.

Think about it