824,000 Jobs To Disappear February 5, 2010–Black Friday–The Obama Depression Even Worse!

Posted on February 3, 2010. Filed under: Blogroll, Climate, Communications, Computers, Demographics, Economics, Education, Employment, Energy, Federal Government, Fiscal Policy, government, government spending, history, Investments, Language, Law, liberty, Life, Links, media, Monetary Policy, People, Philosophy, Politics, Quotations, Rants, Raves, Regulations, Resources, Security, Talk Radio, Taxes, Technology, Video, Wisdom | Tags: Black Friday, Business Birth and Death Adjustments, Economics, Government Interventionism, Obama Depression, President Obama, Recession, Unemploymen Rates, unemployment |

U.S. May Lose 824,000 Jobs as Employment Data Revised: Analysis

“…The U.S. may lose 824,000 jobs when the government releases its annual revision to employment data on Feb. 5, showing the labor market was in worse shape during the recession than known at the time. …”

http://www.bloomberg.com/apps/news?pid=20601109&sid=aNSc0oQ0vb4M&pos=10

See Graphic On Revised Data on Bloomberg

http://www.bloomberg.com/insight/birth-death-model.html

The revised numbers are for April 2008 through March 2009 and will not be reflected in the January 2009 unemployment statistics published by the Bureau of Labor Statistics.

For the entire period  April 2008 through March 2009 the original number of of jobs lost was 4,800,000 will be revised upward to 5,600,000.

Of the 824,000 jobs lost during the April 2008 though March 2009 most of the jobs were lost from October 2008 through March 2009.

The business birth/death model used to generate the revision has resulted in 990,000 additional jobs from April 2009 through December 2009.

Will the business closings that resulted in the revisions have the same impact next year and result in a million job loss?

We have to wait until Febuary 2011 to learn what the adjustments to the unemployment and job data for  the months of April 2009 through March 2010.

I still expect the U-3 official unemployment rate to increase from 10.0% to 10.2% for January 2010.

In twelve months I expect the April 2009 through March 2010 to all be adjusted to reflect the fact that business are still closing and more jobs are being lost than created by new business births.

This appears to be partially confirmed by former Secretary of Labor Robert Reich comments on the unemploymnet rate in the video below.

Keep in mind that the real unemployment rate as measured by U-6 is over 17% with over 26,000,000 million Americans seeking full time work.

This is more than double the number of unemployed Americans seeking full time employment during the worse month of the Great Depression, March 1933.

The Obama Depression is still getting worse in terms of its duration and its impact in terms of the numbers of Americans unemployed.

Robert Reich: Expect 10% Unemployment Until 2011

Background Articles and Videos

  http://www.bls.gov/opub/ils/pdf/opbils70.pdf

CES Birth/Death Model Frequently Asked Questions

Q: Do the birth/death factors vary from first preliminary to final estimate?

A: The birth/death factor for a given month does not change between 1st preliminary, 2nd preliminary, and final sample-based estimates.

Q: Are birth/death factors seasonally adjusted?

A: No, they are calculated using population data that is not seasonally adjusted and the factors are applied to the sample-based not seasonally adjusted estimates.  Months with generally strong seasonal increases such as April, May and June generally have a relatively large positive factor.  Conversely, months with overall strong seasonal decreases, such as January, generally have a relatively large negative factor.

Q: Can I subtract the birth/death adjustment from the seasonally adjusted over-the-month change to determine what it is adding to employment?

A: No.  Birth/death factors are a component of the not seasonally adjusted estimate and therefore are not directly comparable to the seasonally adjusted monthly changes.  Instead, the birth/death factor should be assessed in the context of its effect on the not seasonally adjusted estimate.

Q: Can BLS provide an estimate of the contribution of the birth/death adjustment to the seasonally adjusted monthly payroll change? 

A: BLS does not calculate an estimate of the seasonally adjusted contribution of the birth/death model.  The sample, the imputation of business births using deaths, and the net birth/death model are all necessary components for obtaining an accurate total employment estimate.  The components are not seasonally adjusted separately because they do not have any particular economic meaning in and of themselves.

Q: How frequently are the birth/death figures revised and why do the values change?

A: Birth/death numbers are revised once a year with the benchmark revision.  There are two reasons that the birth/death values change with the update.  First, each year another 12 months of data are added to the historical series used in fitting the models.  As a result of the additional data, the models provide updated results.  Secondly, in general the amount of birth/death required is of a larger magnitude the further the reference month is from the benchmark.  As a result one model is used to provide birth/death values for the first 12 reference months after the benchmark month, and the second model is used for providing birth/death values for 13 to 21 months from the benchmark.  As an example, the first preliminary estimate for June 2003 was produced on the March 2002 Benchmark using a second year model.  When the March 2003 Benchmark was implemented, the June 2003 birth/death factor came from a first year model.

Q: How long has CES been using the birth/death factors and is the history of birth/death available?

A: Implementation of the birth/death factors was associated with the implementation of a new probability-based sample design and estimator.  The new methodology was phased in gradually under the following schedule:  Beginning in June 2000 (with March 1999 Benchmark), Wholesale Trade on an SIC-basis was under the new methodology; in June 2001 (with the March 2000 Benchmark), Mining, Construction, and Manufacturing, on an SIC-basis, were added; in June 2002 (with the March 2001 Benchmark), all of Total Private with the exception of Services were under the new methodology; with the conversion to NAICS in June 2003 (with the March 2002 Benchmark), all of the Total Private industries were produced under the new methodology.

Historical Birth/Death factors are available at www.bls.gov/ces/cesbdhst.htm.

Q: Were estimates purely sample based before 2003?

A: No, prior to the implementation of birth/death modeling, CES used a technique known as bias adjustment to account for business births, business deaths, and other limitations of the survey.

Last Modified Date: May 6, 2008

http://www.bls.gov/ces/cesbdqa.htm

Shrinking U.S. Labor Force Keeps Unemployment Rate From Rising

“…An exodus of discouraged workers from the job market kept the U.S. unemployment rate from climbing above 10 percent in December, economists said.

Had the labor force not decreased by 661,000 last month, the jobless rate would have been 10.4 percent, according to economists including David Rosenberg at Gluskin Sheff & Associates in Toronto and Harm Bandholz at UniCredit Research in New York.

“The actual unemployment rate is higher than shown by the official numbers,” Bandholz said yesterday after a Labor Department report released in Washington showed the economy unexpectedly lost 85,000 jobs in December while the jobless rate was unchanged.

About 1.7 million Americans opted out of the workforce from July through December, representing a 1.1 percent drop that marks the biggest six-month decrease since 1961, the Labor Department report showed. The share of the population in the labor force last month fell to the lowest level in 24 years.

December’s 10 percent unemployment rate matched the median forecast of economists surveyed by Bloomberg News. It was shy of the 26-year high of 10.1 percent reached two months earlier. …”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHA4PMI1G2ks

First-time jobless claims rise unexpectedly

New jobless claims rise unexpectedly to 480,000 as layoffs continue, jobs remain scarce

By Christopher S. Rugaber

“… The Labor Department said Thursday that new claims for unemployment insurance rose by 8,000 to a seasonally adjusted 480,000. Wall Street economists had expected a drop to 460,000, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the third straight week to 468,750.

The figure is the highest in the past two months. Initial claims dropped sharply in late December, raising hopes among economists that layoffs were nearing an end and the economy would soon start generating net gains in jobs.

The figures come a day before the Labor Department is scheduled to report the January employment figures, which are expected to show a tiny gain in jobs. The unemployment rate is forecast to rise to 10.1 percent.

The number of people continuing to claim benefits was unchanged at 4.6 million. That data lags initial claims by a week.

But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

More than 5.8 million people were receiving extended benefits in the week ended Jan. 16, the latest data available, up from about 5.6 million the previous week. The extended benefit data isn’t seasonally adjusted and is volatile from week to week.

Still, the increasing number of people claiming extended unemployment …”

http://finance.yahoo.com/news/Firsttime-jobless-claims-rise-apf-106391038.html?x=0&.v=8

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