Data Dive: Unemployment Rate is in Double Digits
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The Fiscal Times
May 10, 2012

Pop quiz: Has the US economy added jobs or lost jobs the last two months, according to official Bureau of Labor Statistics data? If one relied on the reporting of the media on jobs data, it would be easy to conclude that the number of jobs has risen, even if at a disappointing rate.

Most of the headlines on last week’s jobs report from April noted that the BLS reported a net gain of 115,000 jobs and a decline in the jobless rate to 8.1 percent, lower than it has gone at any time since the second month of President Obama’s term.  Some even noted that the BLS upwardly revised the net-jobs gain in March from 120,000 to 154,000, which further implies that job growth continued in the 35th month of the recovery.

The impression, however, belies the actual overall jobs data, which few if any media outlets reported.  According to the BLS, the number of actual jobs fell in April – and fell in March, too, the first two-month retreat in over a year. 

An historical look at the main A-1 table for seasonally-adjusted employment shows that the number of jobs in April fell to 141,865,000 — 169,000 fewer than in March.  The job level in March came in 31,000 lower than in February.  Here is the number of seasonally-adjusted jobs in the US economy since January 2009:

So what gives?  The BLS actually conducts two surveys, a household poll called the Current Population Survey and a survey of business records called the Current Employment Statistics Survey.  The former produces extensive demographic data to go along with overall employment data.  The latter produces information on payrolls, hours worked, income, and so on. 

The BLS merges some of this data to project the state of the American economy in its monthly employment reports.  That process has been in place for decades, and is reliable – as long as one understands some of the basic assumptions that undergird the reported figures.

For instance, let’s look again at the chart above.  One can argue that we have made up the ground lost in 2009 on jobs, or at least had until March and April of this year. That ignores the problem of population growth.  Economists differ on how many net additions of working-age adults occur on an average each month, with a range from 100,000 to 160,000.

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Even at the low end of the range, we would have added 3.9 million working-age adults to the workforce over this period of time, and at the more-accepted benchmark of 125,000 per month, that number goes up to 4.68 million. As this chart shows, just by getting back to the start of 2009, we are now 4 million jobs or more further in the hole.

If that’s the case, why hasn’t the unemployment rate gone up?  The unemployment rate depends on the number of jobs, but it also depends on the number of people actively working or seeking jobs; the latter is called the civilian population participation rate, which serves as the denominator in the unemployment-rate equation.

Political analyst Edward Morrissey has been writing and blogging since 2003. He is also a senior editor at Hot Air, part of the Townhall/Hot Air group of conservative publications, and hosts a weekly radio show in Minnesota.