The Real August Jobs Report

Note: 8th in a series on President Obama’s job creation record
<=== Previous || Next==>

The Monthly Jobs Report from the Bureau of Labor Statistics (BLS) is defective. Always has been. It combines data from different databases and mixes them together into one report as if they are both one and the same thing. They are not.

The two combined reports are:

In the current economy, the way these two databases are combined presents a skewed view of the real job creation picture in the United States.

The BLS failed to report there were -119,000 jobs lost last month!! It reported +96,000 jobs created instead. That is a big difference.

Why is the real monthly job creation number so much different from what is reported in the Monthly Jobs Report that we hear so much about in the news?

Table A-1 – Employment status of the civilian population by sex and age

Table A-1 is the more complete of the two. It accounts for total non-military employment in the United States. Last month that total was 142.1 million seasonally-adjusted jobs.

Table A-1 was used to create the above graphic of job creation from January 2008 through August 2012.

Table A-1 provides us very useful data: unemployment rate (8.1%), total size of the employable population over 16 years of age(243.6M), size of the civilian labor force(154.6M), total employed(142.1M), Participation Rate(63.5%), employment-population ratio(58.3%), total number unemployed(12.5M), total not in the labor force(88.9M) and the number of persons who currently want work but don’t have a job(7.0M).

The numbers in parenthesis are the seasonally-adjusted figures reported by the BLS in the August 2012 Monthly Jobs Report. The seasonally-adjusted numbers are calculations based on the actual non-seasonally adjusted numbers that the BLS also reports.

Table B-1 – Employees on nonfarm payrolls by industry sector and selected industry detail

Table B-1 is a subset of Table A-1. It contains total nonfarm, non-military employment. Last month that total was 133.3 million jobs. It was 8.8 million FEWER jobs than accounted for in Table A-1.

Table B-1 was used to create the above view of nonfarm job creation from January 2008 through August 2012. Note the big differences from the more comprehensive Table A-1.

Table B-1 provides the Monthly Jobs Report two things:

  • Total nonfarm jobs created (+96,000)
  • Job totals by nonfarm business sectors

Table B-1 is important in the Monthly Jobs Report because it specifically identifies job creation statistics from various business sectors.

Business sectors include things like mining, construction, manufacturing, automotive, financial and public-sector job creation.

For example, from Table B-1 we learn that since Barack Obama became President there have been +115,100 total jobs created in the automotive industry. That includes +90,000 in manufacturing and parts. It includes +25,100 in retail sales of both cars and parts.

The Defect

The main problem with combining Table A-1 and Table B-1 data into one report is one crucial number… total jobs created.

The Monthly Jobs Report uses the Table B-1 number that erroneously overstates the real job creation record at the present time. As can be seen in the graphs above, the real job creation numbers are far more ragged in this recovery than those of nonfarm job creation only.

That one change alone is the difference between reporting +96,000 jobs created last month instead of -119,000 jobs lost.


Earlier this month there was a great deal of conflicting buzz surrounded the unemployment rate dropping to 8.1%. Normally that would be great news, but it wasn’t.

That was primarily because of several other statistics from the more comprehensive Table A-1.  Those numbers were the participation rate (63.5%) and the number of workers who dropped out of the workforce (-368,000). That was 4 times more than the reported net gain in jobs from Table B-1.

Basically, the unemployment rate dropped because -368,000 discouraged workers gave up and dropped out of the workforce. In August we had the lowest workforce participation rate since September of 1981.

The Monthly overall job creation statistics should be derived from Table A-1 instead of Table B-1. In the current recovery it paints a gloomier, but more truthful picture. It would spur Congress and the President to take job creation more seriously if the more accurate jobs picture were reported.

If reported from Table A-1, the public would then know this country has LOST -314,000 jobs in the last two months alone.

Instead, using Table B-1 overall job creation allows both Congress and the President to claim we are slowly creating jobs when the truth is that we remain in a jobs depression that is getting worse again.


About azleader

Learning to see life more clearly... one image at a time!

Posted on Sep 23, 2012, in culture, economics, Job Creation, Jobs, Jobs Reports, Life, news, Opinion, Politics, Thoughts. Bookmark the permalink. 7 Comments.

  1. Glad to see you are back.

    The malaise in the US is, as you point out and correctly name, the Jobs Depression. Combine that with the Financial Repression I have written about, and you get the real picture of the economy. With QE3, savers are doomed for more years of interest rates below the rate of inflation. Maybe QE3 will keep the stock market propped up, because pensions and IRAs could not take another 2008 wallop.

    We are in uncharted waters and hope our journey is taking us to a nice place. The ending to our current story is quite the mystery. I read massive deflation and depression (Faber and Farrell), to menacing inflation eating up all our purchasing power (Schiff).

  2. The primary beneficiary of low Treasury security yields is government… the single largest purchaser of federal government debt is The Fed.

    The QEs just make it easier to finance our $16T national debt with a side benefit of lower mortgage rates.

    Last time I checked, U.S. taxpayers are held accountable for both The Fed’s and the federal government’s massive debts. We are kinda playing “rob Peter to pay Paul”.

    If we don’t start creating more jobs in this country soon then our nation’s debts and our economy are going to get out of control until we cannot dig out. We are not Europe yet, but headed their way.

  3. Good seeing you posting again, AZ.

    Has the federal government always used this mangled way of reporting jobs or is this something more recent? So, from +96,000 to-386,000 means they were omly off by 482,000? Not bad for government work.

    • It is my belief that is the way the BLS has always reported. It is probably a tradition that they continue for the sake of consistency. It would be confusing to change horses in the middle of the stream.

      There could be other reasons, though.

      Notice that Table A-1 seasonally-adjusted figures has a strange anomaly for January 2012? It shows +847,000 jobs created that month. It is nearly twice the next highest month since January 2008. That is not a mistake. It is in BLS data. I double checked.

      If you look at job creation for non-seasonally-adjusted figures then the massive January 2012 jump disappears.

      I have no idea why, but clearly something is not right. Each January they indicate a qualifier in the raw data that says “Data affected by changes in population controls.”

      The actual real job loss for August was -119,000. Your -386,000 includes the dropouts who didn’t have jobs at the time they gave up in August. They were already previously counted in prior months job losses.

      What isn’t counted are potential workers over 16 who come of age due to population growth but who never enter the workforce because they can’t find their first job… like recent college grads who don’t find work and are living at home with their parents.

  1. Pingback: White House July Jobs Report « Inform The Pundits!

  2. Pingback: Did Obama Create 5 Million New Jobs? « Inform The Pundits!

  3. Pingback: Job Creation and President Obama « Inform The Pundits!

Comments and questions are welcomed!

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: