Friday, April 2, 2010

Labor Department claims a gain of 162,000 jobs. It looks like 88,000 were temp jobs for an actual loss of about 76,000 jobs.

It looks like the estimate based on the ADP report for March was wrong and that, according to the Labor Department (as reported at CNN Money), the U.S. packed on 162,000 new jobs in March.  Of course, relative to population growth, it's only a gain of 12,000 jobs, which is certainly much better than the large losses we have suffered recently.  However, 48,000 of those jobs were temporary Census Bureau jobs.  So, the real number is closer to 114,000 (or a loss of 38,000 relative to population growth).  Still, it does seem like good news.  I had previously predicted another month of losses and apparently I was wrong (for the first time in, oh, about two years).

Another blog, Seeking Alpha, is claiming that 40,000 other jobs were temp jobs and that 37,000 jobs were health care jobs.  I haven't come across a better source for this, but if so, that means that 88,000 of the jobs were illusory, reducing the number to 74,000 jobs for a loss of  about 76,000 jobs relative to population growth.  That blogger goes on to say:

Despite all the negative aspects to the employment report, including average hourly earnings falling 0.1%, the mainstream media trumpeted it as more evidence that 'happy days are here again' (the title of a song from the Great Depression). Coverage was filled with statements such as, "The increase is the latest sign that the economic recovery is sustainable and healing in the job market is beginning." Government hiring of census workers and more health care jobs (many of which are also government related) does not indicate a sustainable economic recovery. Instead, it indicates sustainable government spending to try to make a recovery look like it is taking place.


Patrick Murtha said...

The ADP numbers are more reliable:

"I did want to give you some feedback on your ADP Report versus BLS number. (My qualifications were 30 year career of working for the nation's largest Payroll company in various Sr. management positions. I was in the know.) The BLS report was designed to be a market mover. It surveys companies which don't have to tell the truth or report at all. The ADP report is the balance of Terminations and New Hires on the raw payroll data which is crunched to create paychecks. It is massaged by some consistent factors arrived at by a slew of heavy duty SME consultants. It is more reliable than BLS!!"

I never completely trust the government figures, as I suspect there is "massaging" that goes on, and it is also quite typical for figures to be revised downward a few weeks later (seldom upward, although I notice that the figures for this January and February have been revised upward). It is crucial for Obama and the Democrats that there appears to be some movement on the employment front, and they are politicians just like Bush and the Republicans; they will do what it takes to create that perception.

Also, the U6 number, which if accurate is the really important unemployment rate number, is seldom reported in MSM stories. It went up this time, to 16.9%.

The 162,000 job gains figure included not just 48,000 temporary census workers, but 40,000 workers added by "temporary help services." I wonder how the latter are counted. If they get a one-day job sometime in the month, are they counted as "employed"?
The prominence of temp agencies, which has been growing for a generation, is one more unsettling part of the changing employment landscape. I strongly suspect that studies conducted years from now will show that workers who became re-employed after a period of unemployment in this recession/depression will have been (a) employed at a lower rate of pay in their new job than in their last job (sometimes quite significantly lower, as with many finance types), and (b) employed in their new job for a shorter period of time than in their last job.

Frank the Underemployed Professional said...

So, you're saying that the BLS numbers are BS? Wouldn't surprise me in the least.

I was unaware that 40,000 of the jobs were temp positions, or perhaps I didn't read the CNN article closely enough. I can't say I'm surprised by that, either.

What I find unsettling about the report is that our politicians, our bought-and-paid-for economists, and the media will happily declare that the recession is over and that our economy is now strong.

Perhaps we will see a little temporary improvement if we move into the upward part of an economic cycle, but the overall trend is downwards. I like to tell people to imagine a sine wive propagating along a straight line, if that line slopes downward, it's possible that the peak in the sine wave might make it appear that the economy is better than it was during the trough of the wave, but in actuality the overall trend is downward. I guess I'm a committed "doom and gloomer".

It's good to have you as a comment contributor, Patrick.

Patrick Murtha said...

Thank you! I don't mean to be gloomy, but sometimes the "spin" in the mainstream media gets to me. I picked up that quotation on ADP vs. BLS from a thread at the Life after the Oil Crash (LATOC) Forum. I'm not a hardcore Peak Oiler -- softcore, perhaps -- but there is interesting information to be gleaned there sometimes.

Frank the Underemployed Professional said... I like reading the survivalist forum where everyone talks about how they are going to survive after the die-off. I hope they're wrong and later proven to be nutcases, but I suspect that they aren't.

Nando said...

Entitled, "The Dollar Bubble"

You may have already seen this video, Frank. The entire video is worth viewing, but I find the best part to be at around the 21:00 mark. It discusses how high school teaches kids to go to college and end up heavily in debt. (Apparently, none of these kids realize that the product is worthless if everyone has one.) One commenter even notes that some Ivy League law grads are unemployed.

Also, look at the discussion on hyper-inflation. Hell, just go to the grocery store and see how the prices of fruits, vegetables, bread and other staples have increased just in the last few months.

In all seriousness, the biggest problem in this country is our private, central banking system. I too cannot stand our big industry cheerleaders, i.e. "mainstream economists." (Most people don't even know about Alan Blinder, Paul Roberts, Peter Schiff or Marc Fabel.)

In the final analysis, we are done as a country. The Fed printing more money and our collective over-reliance on credit has propped up our economy for decades - and given the APPEARANCE of prosperity.

Patrick Murtha said...

Here is an AP article confirming the 40,000 temp jobs and 37,000 health care jobs:

"Temporary help services added 40,000, while health care added 37,000."

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