America's Unemployment Numbers are as Confusing as Ever

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Today's U.S. jobs report from the Bureau of Labor Statistics is (choose one):

  1. Great!
  2. Terrible!
  3. Both?
  4. I'm so confused!

It hasn't exactly been easy to parse the BLS' deluge of jobs data in recent months, especially since your takeaway will vary widely by your interpretation. That explains why Dow Jones Industrial Average (DJINDICES: ^DJI  ) futures, which had been firmly positive before the 8:30 a.m. EST data dump, initially fell into the red before quickly rebounding. One of the best real-time takes on the jobs numbers came from economist Justin Wolfers on Twitter:

Ugh. Payrolls +113k. December revised from +74k to +75k. November from +241k to +274k. Unemployment 6.6% Folks, this isn't good news.

— Justin Wolfers (@JustinWolfers) February 7, 2014

But, wow, HERE'S THE SILVER LINING: Household survey shows employment +616k (after adjusting for population controls).

— Justin Wolfers (@JustinWolfers) February 7, 2014

Color me confused.-Moderately disappointing payrolls report-Incredible household survey. Your conclusion depends how you weight 'em.

— Justin Wolfers (@JustinWolfers) February 7, 2014

Today's data suggest recent trends of good-but-not-great jobs growth is continuing. But they warn us to be wary of a slowdown.

— Justin Wolfers (@JustinWolfers) February 7, 2014

So what did the numbers actually tell us?

As Wolfers pointed out, different numbers are telling us different things. The headline numbers were 113,000 and 6.6%, which were the number of nonfarm payroll jobs added and the new unemployment rate, respectively. This pushes the official employed-Americans tally to 137.49 million, which is still 851,000 fewer than were employed in December 2007 before the start of the recession. However, the BLS' household survey was quite different -- after adjusting for population controls, it found that 616,000 people found jobs last month, which is the fourth-largest monthly improvement since the end of the recession and the fifth-largest monthly improvement of the past decade. Using that number, we find that there are now 332,000 more employed Americans than there were before the recession, or 543,000 more employed Americans after adjustments.

Other important but overlooked numbers:

  • 1.8 million: new full-time jobs created over the past year.
  • 8,000: new part-time jobs created over the past year.
  • 1.3%: year-over-year drop in unemployment, from 7.9% last year to 6.6% today.
  • 239,000: the number of people who have left the labor force in the past year.
  • 1.06 million: the drop in the number of long-term (27+ weeks) unemployed.

The economy continues to improve, and the decline in long-term unemployment is particularly heartening. Have we finally overcome the lingering effects of the financial crisis? That depends on which numbers you want to use.

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Read/Post Comments (6) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 07, 2014, at 12:38 PM, pondee619 wrote:

    Llies, damned lies and statistics. You can, at all times, obtain a set of statistics that will "say" exactly what you want to say.

    If an argument is being made solely with statistics, you are being lied to. or, at the very best, misled. Questions to ask with the cited stats above;

    "1.06 million: the drop in the number of long-term (27+ weeks) unemployed" How many of these people found full time jobs as compared to those that just their benefits?

    "239,000: the number of people who have left the labor force in the past year" Did these people retire, die or are they now part of the uncounted unemloyed?

    "1.3%: year-over-year drop in unemployment, from 7.9% last year to 6.6% today" How is this number effected by those that "dropped ou of the labor force"?

    "8,000: new part-time jobs created over the past year" Is this a net gain figure? How many part time jobs were lost? How long will these jobs last?

    "1.8 million: new full-time jobs created over the past year" Again, is this a net number? Is this "full" employment or minimum wage jobs?

    "So what did the numbers actually tell us?" Pretty much anything we want them to.

  • Report this Comment On February 09, 2014, at 9:49 AM, wvowell wrote:

    I would love someone to explain to me how we can have a 6.1% unemployment rate with this:

    2007 Labor Participation rate 67%

    2014 Labor Participation rate 63.5%

    I'm sure our population has increased since 2007.

    This 6.1% is nothing but OBAMA propaganda. I'm sure the truth is more than likely 12% or more!!!

    Next time you Lemmings are riding around look at all the empty buildings, look at all the businesses that are closed. Unemployment is far far higher than this crap we are being fed by OBAMA and his media cronies.

    Sadly, even MOTLEY FOOL tries to spin a positive outlook on all of this liberal garbage.

    WAKE UP!!!

  • Report this Comment On February 09, 2014, at 2:57 PM, Mathman6577 wrote:

    Mark Twain would have said "The BLS needs to stop calculating such a misleading stat. And the financial media needs to stop writing about."

  • Report this Comment On February 09, 2014, at 3:51 PM, Chicagofun1 wrote:

    Democrats are the problem

  • Report this Comment On February 09, 2014, at 9:00 PM, DJDynamicNC wrote:

    The payroll survey tends to be more accurate than the household survey.

    It's worth noting that productivity gains in recent years SHOULD be reducing labour force participation. It makes sense to utilize those gains to free people from labour.

    Also, I would point out that BLS statistics weren't Obama propaganda when they showed high unemployment, which means they probably aren't Obama propaganda now, but I suspect that those comments aren't motivated by rational analysis and so it might be a waste.

  • Report this Comment On February 10, 2014, at 9:19 AM, Mathman6577 wrote:

    Short memories: The Obama adminstration and the Dems in Congress (especially Pelosi and Reid) bashed Bush for high unemployment when they first took office (adn still do to some extent). The problem is the BLS is measuring the wrong thing to gage the health of the labor market using "unemployment" as the parameter. They need to come up w/ a new parameter.

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Alex Planes

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