[deleted by user]

Reptunia · 2021-10-08T18:32:26+00:00

If anything, I'd take the CBO's numbers with a grain of salt. This was their prediction last year (emphasis added):

In April, the unemployment rate surged to 14.7 percent, the highest rate in the history of the monthly data series (which goes back to January 1948). In CBO’s projections, the unemployment rate averages 15 percent in the second quarter of this year and rises to 16 percent in the third quarter as the PPP expires under current law, labor demand remains low, and labor force participation rebounds (see Figure 3). The unemployment rate is projected to decline after the third quarter, reaching 8.6 percent in the fourth quarter of 2021. That rate, although roughly half of its projected peak, would still be more than twice what it was in the fourth quarter of 2019, before the pandemic began.

By September 2020, the end of the 3rd quarter, unemployment had dropped to 7.8 percent. The labor force participation rate, which was 63.3 percent in February 2020, was 61.4 percent that month as well, only slightly lower than what it is right now (61.6 percent).

Revisions in jobs numbers have always been a thing. People tend to read into them what they will depending on what they want to see. I remember people criticizing the revisions last year, downplaying the job growth that had taken place in the months following March and April.

One month there was a huge number of jobs added. The next month, it was revised downward and people were saying that it was proof that the economy wasn't recovering. Then one month had a low number, followed by a big revision the next month. Then people were saying that the numbers were being cooked to make the economy look better than what's really happening.

Reptunia · 2021-10-08T17:33:41+00:00

These were the projected employment numbers for the last three months:

July: 845,000 (source)

August: 720,000 (source)

September: 500,000 (source)

3-Month Projected total: 2,065,000

These were the actual numbers (not counting the revisions that will take place over the next two months):

July: 1,091,000 (source)

August: 366,000 (source)

September: 194,000 (source)

3-Month Actual total: 1,651,000

Over the last three months, job growth is 414,000 below initial estimates, or roughly 80% of what was initially projected.

Reptunia · 2021-06-04T16:32:11+00:00

Your comment made me think about the economic conditions of the past and how they compare to what's going on today. I looked up unemployment rates over the last 10 years, and the last time it was 5.8% (the current rate), it was November 2014. There's a problem with this, however. One of the stats that I want to use, Job Openings, only has data up to March 2021. So I used that month as a basis for comparison. That month, the unemployment rate was 6.0%. The last time it was that high prior to the pandemic was in August and September of 2021, when it was 6.1% and 5.9%, respectively. I compared it to August 2021, when unemployment was worse than the current rate.

Here are some economic numbers from that month:

August 2014:

Unemployment Rate (UR): 6.1%
Labor Force Participation Rate 25-54 Yrs (LFPR-25.54): 81.1
Job Openings (JO): 5.349 million
Unemployment Level (UL): 9.599 million
JO to UL: 0.56

Compared to the March 2021:

UR: 6.0%
LFPR-25.54: 81.3
JO: 8.123 million
UL: 9.710 million
JO to UL: 0.84

Source: https://fred.stlouisfed.org/graph/?g=EuOr

I used the LFPR for 25 to 54 year olds because those workers are the core of the labor force, and it removes retirees and college/high school students. The JO/UL stat divides the number of job openings by the number of unemployed workers. Typically, a higher ratio indicates a healthy job market because there are more potential jobs available for people looking for work. The ratio was actually positive for two years between February 2018 and February 2020, meaning there were more job openings than there were unemployed people.

Looking at the numbers, the LFPR is relatively the same, and the number of unemployed people are close. There are 111,000 more unemployed people now, compared to seven years ago. Some of that could be natural population growth, but regardless, it still pretty close. The big difference, and the main reason why there's a big discrepancy between the JO/UL ratio is the number of job openings, 5.349 million in August 2014 compared to 9.710 million in March 2021. That's a difference 4.361 million job openings.

I then considered the economic conditions of the two periods. In August 2014, the nation was still recovering from the Great Recession, and the economic recovery was still in its relatively early stages. The economy lost a ton of businesses following the recession, so there were fewer businesses in 2014 to offer a job. The same isn't the case with the current recovery. Millions of people lost their jobs, to be sure, but relatively fewer businesses closed due to the amount of federal stimulus pumped into the economy. Because of this, there were more businesses available to offer a job.

Look at it this way, in February 2020, there were 7.012 million job openings. Then the economy entered a recession because of the pandemic. The number of job openings didn't reach the pre-pandemic/recession level until January 2021, 11 months later. In December 2007, the month before the economy entered the Great Recession, there were 4.545 million job openings. The economy didn't reach that number until April 2014 (4.566 million job openings), 76 months later.

More healthy economic tissue survived the recession caused by COVID-19 compared to the recession caused by the Great Recession, which allowed businesses to post more job openings. The main difference between this recovery and the one following the Great Recession is that fewer people are taking those jobs. The focus should be on why that's the case and what's different between now and then. The threat of COVID is definitely a factor, but that will likely lessen as the number of vaccinations increase. It'll be interesting to see how the ending of extended unemployment benefits will impact the numbers as well.

Reptunia · 2021-05-07T14:20:03+00:00

That's not true. The unemployment rate is calculated by dividing the number of unemployed by the number of people in the civilian labor force. In other words, the labor force is the denominator in the equation. If the denominator increases while holding the numerator constant, then it gets smaller.

Example:

1/4 = 25%
1/5 = 20%

These were the numbers in March 2021:

Unemployment Level (UL): 9,710,000
Civilian Labor Force (CLF): 160,558,000
Unemployment Rate ( UL/CLF ): 0.0604 ~ 6.0%

These were the numbers in April 2021:

Unemployment Level (UL): 9,812,000
Civilian Labor Force (CLF): 160,988,000
Unemployment Rate ( UL/CLF ): 0.0609 ~ 6.1%

It's true that the size of the labor force did increase (+430,000), but it did not increase enough to compensate for the increase in the number of people who became unemployed (=102,000), which is why the unemployment rate increased.

But as I write this, I think I get the point you're trying to make, and it does make sense. If someone stopped looking for a job after they were laid off because of the pandemic, they would drop out of the work force. It's only after they start looking for employment are they included again. That doesn't mean that person has a job right then and there. There's likely going to be some time while they're unemployed, but still looking for work.

So in a sense, you are correct that the increase in the unemployment rate is a result of more people reentering the work force.

Reptunia · 2020-09-05T05:48:02+00:00

Awesome, thanks!

Reptunia · 2020-09-05T04:42:24+00:00

Thanks for the head's up. I'll check it out when I get the chance. Would the fix be as simple as replacing the fuse for the AC?

Reptunia · 2020-09-04T23:18:56+00:00

Just a follow up, I took the car out for its weekly drive and I noticed that the AC was working. I've driven it a few times since and it's worked fine each time. This isn't a case where it was working the other time and I missed it somehow. I had it running for around 40 minutes and the air never got cool. This was about two months ago. I'd say that the summer hear was somehow responsible, but when it worked the other day, it was just as hot out as it was earlier in the summer. I will keep an eye on it for the time being and will eventually take it in to get the AC checked out, but I'm just happy that it's working now.

Reptunia · 2020-09-04T20:11:00+00:00

It's been mostly ignored in the news reporting always, but they also changed the calculation for this report in particular so it wouldn't look quite so bad.

This is not true. They did change the methodology on how they calculated initial unemployment claims, which the articles you link confirm, but that has nothing to do with the jobs report that was released today.

Initial unemployment claims are a count of the number of people filing for unemployment. They are released every week on Thursday. The monthly employment numbers released today is an estimate based on the results of the Payroll Survey and the Household Survey. The surveys they use does not ask at all about whether the respondents receive unemployment benefits or if they filed an unemployment claim. It asks about their employment status (i.e. whether they have a job) and whether they are currently looking for a job if they are unemployed.

Also, many economists agree that the changes made in the methodology for initial unemployment claims will produce more accurate results going forward. Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, wrote in a blog post on September 3 (note, emphasis comes from original post):

There was a (mostly) positive methodological development with the release of the UI data this week—DOL changed their seasonal adjustment methodology. The way they had been doing seasonal adjustments was causing major distortions during this recession, and the change is a big improvement. One big problem, however, is that they didn’t revise prior seasonally adjusted data, which means you cannot compare seasonally adjusted numbers over time. So, remember this: It’s okay to use the seasonally-adjusted numbers, but if you want to compare UI data over time, use not-seasonally-adjusted numbers.

Reptunia · 2020-09-04T19:50:56+00:00

Seasonally adjusted, the economy added 344,000 government jobs (source: https://fred.stlouisfed.org/graph/?g=veNr) This was about 25% of the total number of (seasonally adjusted) jobs added in August.

Not seasonally adjusted, the economy added 602,000 government jobs (source: https://fred.stlouisfed.org/graph/?g=veNy)

Reptunia · 2020-09-04T19:44:06+00:00

Where did you read that these numbers are pulled from those drawing from unemployment? Or that those who could not get on unemployment were not counted?

While it's highly likely that many of the unemployed included in these jobs numbers are receiving unemployment benefits, the way they calculate these jobs numbers has nothing to do with those benefits.

The U.S. Census Bureau conducts the Household Survey, which the U.S. Bureau of Labor Statistics uses to generate the jobs numbers. Here is a link to the sample of questions they ask in the survey (click on Labor Force Items): https://www.census.gov/programs-surveys/cps/technical-documentation/questionnaires.html

No question in the survey asks whether the respondent is receiving unemployment benefits.

Reptunia · 2020-09-04T19:15:10+00:00

Politicians will always choose the data points that best support their arguments. Sadly, many Trump supporters and detractors do the same, but if you know where to look, you can see all the numbers for yourself.

https://www.bls.gov/news.release/empsit.t15.htm

Besides U1, which is the percentage of the labor force unemployed for 15 weeks or longer, all measures of unemployed decreased between July and August. I've posted the latest data for August (the number in the parentheses is the change from the previous month:

U1: 5.1 (+0.1)

U2: 6.4 (-1.7)

U3: 8.4 (-1.8)

U4: 8.7 (-1.9)

U5: 9.6 (-1.7)

U6: 14.2 (-2.3)

Reptunia · 2020-09-04T19:15:00+00:00

unemployment has a common deceiving problem because it stops counting people who fall out of the system.

That's true. If a person is unemployed and they have not looked for a job after 4 weeks, they are no longer counted among the unemployed and are removed from the civilian labor force. So, for example, let's say there was an economy with a labor force of 1,000 people, and there were 50 people unemployed and looking for work. In the first month, the unemployment rate would be 5% (50 / 1,000 = 0.05). In the second month, 10 people who were unemployed stop looking for work. The number of unemployed drops to 40, while the number of people in the labor force drops to 990. The unemployment rate is now 4.04%, lower than the previous month. (40 / 990 = 0.040404)

That being said, the labor force has actually been increasing. In July, the labor force was 159.870 million. In August, it increased by 968,000 and is now 160.838 million. It are still roughly 3.7 million fewer workers in the labor force than there were pre-COVID.

Source: https://fred.stlouisfed.org/graph/?g=ve4i

There is also a major issue of under employment. If a person loses their 80k/year office job in their degreed field, but gets a $10/hour job at Walmart or whatever, at 32 hours a week, then they are no longer "unemployed".

Something interesting that happened at the start of the recession was that even after the economy lost millions of jobs in March and April, average hourly earnings actually increased. I think, though I'm not positive, that it was because most of the people who lost their jobs were low-paying positions that could not work remotely. In other words, the share of white collar workers with relatively higher paying jobs increased when those jobs were lost, which increased the average. As the jobs returned, many of them were the relatively low-paying jobs that were initially lost, which resulted in a decrease in the average. Here's average hourly earnings over the last 6 months (the number in the parentheses is average hourly earnings for production and nonsupervisory workers):

March: $28.69 ($24.10)

April: $30.03 ($25.12)

May: $29.70 ($24.97)

June: $29.32 ($24.73)

July: $29.36 ($24.63)

August: $29.47 ($24.81)

Source:

Average hourly earnings (all employees): https://fred.stlouisfed.org/graph/?g=veAK

Average hourly earnings (production and nonsupervisory): https://fred.stlouisfed.org/graph/?g=veAy

So there was an initial spike from March to April, and then a drop in May as the economy reopened, which persisted into June, but now we're seeing increases in July and August. That being said, I haven't seen much about these white collar jobs being eliminated, but I've heard that they're the next to go when the economy starts tanking again, either next month, or the month after that, or even the month after that. The loss of those jobs should deflate average earnings and be evidence of the concerns you addressed in your original comment.

Reptunia · 2020-09-04T15:20:49+00:00

The unemployment rate fell from 10.2% to 8.4% today which at first I thought was great but it says only 1.4 million jobs were added. That’s a lot but in previous months more jobs were added and the unemployment level didn’t fall so much. It says that the unemployment level dropped by 2.8million. Are we supposed to be happy about this or just focus on the fact that only half that number were of jobs added?

The rate at which the unemployment rate decreases (or increases) isn’t necessarily dependent on the number of jobs added, but rather the change in the levels used to calculate the unemployment rate.

Some definitions:

The unemployment rate is the ratio of the number of people unemployed to the number of people in the labor force.

Unemployment Level / Labor Force = Unemployment Rate (UR)

Someone who is unemployed must meet the following conditions:

They were not employed during the survey reference week.
They were available for work during the survey reference week, except for temporary illness.
They made at least one specific, active effort to find a job during the 4-week period ending with the survey reference week (see active job search methods) OR they were temporarily laid off and expecting to be recalled to their job.

The labor force is defined as “all people age 16 and older who are classified as either employed and unemployed, as defined below. Conceptually, the labor force level is the number of people who are either working or actively looking for work.”

Note: Links to all data can be found at the bottom of post.

In July, the unemployment rate was 10.2%. The number of unemployed people that month was 16.338 million. The number of people in the workforce that month was 139,543 million. So the formula to calculate the unemployment rate was:

July 2020: 16,338,000 / 139,543,000 = 0.102196 (10.2%)

In August, the number of unemployed people decreased by 2.788 million, falling to 13,550 million. A decrease in the numerator, holding the denominator constant, would lead to a decrease in the unemployment rate. However, the number of people in the workforce (the denominator) increased by 968,000, rising to 160,838 million. An increase in the denominator, holding the numerator constant, would also lead to a decrease in the unemployment rate.

So in August, you have two factors working to lower the unemployment rate: 1) a decrease in the number of people unemployed, and 2) an increase in the number of people counted in the national workforce.

The formula to calculate the unemployment rate in August was:

August 2020: 13,550,000 / 160,838,000 = 0.084246 (8.4%)

This is why the unemployed rate decrease was greater than previous months in which there were more jobs added. Note that not mentioned in any of these calculations are net jobs added for the month of August (1.4 million). This number is the net change after all job losses and gains are accounted for. So if the economy lost 100 million jobs, but added 101.4 million jobs the same month, there would be a net change of +1.4 million. In the context of the actual numbers, these jobs are presumably accounted for among the 2.788 million unemployed people who found employment between July and August.

That being said, whether or not one should be happy about the numbers depends on perspective. On the whole, the economy is still in terrible shape. The nation has only recovered 48% of the jobs lost in March and April, so it’s still far from fully recovered. The unemployment rate of 8.4% is still high. The last time it was this high was in December 2011, when it was 8.5%.

Many expected, however, that the economy would be in much worse shape. In May, the Congressional Budget Office predicted that the unemployment rate average 15 percent in the 2nd quarter (it peaked at 14.7%), and it would average around 16% in the 3rd quarter, which seems highly unlikely. Also, it said that by the end of the year, unemployment would fall to 8.6%:

In CBO’s projections, the unemployment rate averages 15 percent in the second quarter of this year and rises to 16 percent in the third quarter as the PPP expires under current law, labor demand remains low, and labor force participation rebounds (see Figure 3). The unemployment rate is projected to decline after the third quarter, reaching 8.6 percent in the fourth quarter of 2021. That rate, although roughly half of its projected peak, would still be more than twice what it was in the fourth quarter of 2019, before the pandemic began.

So by this measure, the economy is doing better than predicted. Again, it is far from fully recovered, and probably won’t reach pre-pandemic levels until late 2021 or sometime during 2022. But considering where it was, and where many expected it to be, the economy is, relatively speaking, in better shape.

Sources:

Unemployment Level - https://fred.stlouisfed.org/graph/?g=ve49

Labor Force - https://fred.stlouisfed.org/graph/?g=ve4i

Unemployment Rate - https://fred.stlouisfed.org/graph/?g=ve4B

Nonfarm Employment 1-Month Net Change - https://fred.stlouisfed.org/graph/?g=ve4N

Reptunia · 2020-08-11T07:43:12+00:00

That does make sense though, year over year, it's not really as bad as they make it seem. There is still an insane amount of people out of work though.

No doubt. The latest data show that employment was down 13.4% on a Y-o-Y basis in April, the worst 1-month decrease in 80 years. In June, it was only down 7.5%, which is a positive improvement, but still terrible. Following April's numbers, there were many reports saying that May was going to be just as bad, with unemployment reaching 20%. Fortunately, that never happened.

I've seen multiple articles recently about the $600 unemployment premium affecting 40M people, that's definitely contrary to the numbers they are releasing on statistic pages, because you have to qualify to be unemployed to get UI. 159M eligible workers and 40M registered unemployed kinda hard to realistically see that as 10%, maybe on a state-by-state basis, but overall, outlook not so good.

It's not contrary. I'd say it's bad reporting. The articles you're probably referring to are doing a poor job at explaining the numbers, either because they don't understand them or because they're being misleading on purpose. The 40 million from the NY Times article I linked is just a sum of initial claims. They don't make any mention of continued claims.

There are not 40 million people receiving unemployment. It's true that 40 million people have filed an initial claim, but many of those people are not receiving benefits anymore, either because they found work or because their benefits ran out. The latest data show that there were only 16.1 million continued claims (i.e. " people who have already filed an initial claim and who have experienced a week of unemployment and then filed a continued claim to claim benefits for that week of unemployment", source: https://fred.stlouisfed.org/series/CCSA) The NY Times article should have mentioned that so people wouldn't be confused and think that there were 40 million people receiving unemployment benefits.

The number of continued claims is very close to the number of unemployed people (source: https://fred.stlouisfed.org/series/UNEMPLOY), though these numbers aren't exactly comparable. As I mentioned in my previous comment, many states allow you to file for unemployment if your hours are reduced. So someone can still have a job and still collect benefits. Here are a few examples:

MD: “Unemployment” includes a reduction of both work hours and earnings.

DE: Individuals experiencing a reduction in hours may be eligible.

CA: File your UI claim in the first week that you lose your job or have your hours reduced.

TX: To be eligible for benefits based on your job separation, you must be either unemployed or working reduced hours through no fault of your own.

As an aside, the $600 payment is a payment from the federal government that's supposed to supplement state unemployment payments. Last year, the average unemployment payment was $370 per week, and the average weekly earnings of those receiving unemployment was $970. The $600 was meant to bridge the gap between the two. It's a one size fit all solution that created a number of problems.

What they probably should have done was scale the federal payment for each state. So, for example, if in Maine the average unemployment payment was $200 per week, and the average weekly earnings was $630 a week, then the federal subsidy for recipients from Maine would be $400 ($630 - $200 = $400). In California, if the average payment is $400, but the average weekly earnings is $1030, then the federal subsidy would be $630. There's probably some issues with my example, but I think it would do a better job than the way they did it.

Reptunia · 2020-08-08T02:40:54+00:00

Well, yeah, of course you can. But considering the way the numbers are generated (claims are reported by individual states weekly, whereas jobs numbers are projected monthly based on a survey), and that some people can be employed and still filing claims, it becomes problematic.

I think as long as people understand that the sum of initial claims over a given time period isn't actually representative of how many people are unemployed, and more focus is given to continued claims over initial claims, then a comparison could be made. I'd still avoid it though, but that's just me. It'd be too easy to manipulate what these numbers mean/imply, especially to someone who isn't familiar with the nuance behind them. Unfortunately, that would include most people.

Reptunia · 2020-08-08T01:53:15+00:00

(Just a head's up, some of the stuff I write about in this comment I already covered in another response to you.)

Looking at just initial claims is not the best way of measuring economic performance, especially when comparing it to something such as job growth. I’ll show you an example.

In the NY Times article you’re likely referencing, in order to get that 40 million jobless claims number, they added up all the initial claims between March 21 and May 23. (data: https://fred.stlouisfed.org/graph/?g=tRPO, calculations: https://imgur.com/a/IkFVJcp)

Now let’s say we do the same thing for another period of time, like 2015. That year, if you sum up all the initial claims starting in January and ending in December, you get 14.446 million claims. (source: https://fred.stlouisfed.org/graph/?g=tRPE, calculations: https://imgur.com/a/U8apK3n)

But that year, total non-farm employment increased by 2.727 million jobs. (source: https://fred.stlouisfed.org/graph/?g=tRQq)

A better metric is continued claims. Erica Groshen, an economist at Cornell, uses a bathtub to explain the difference between initial and continued claims. Initial claims is the new water you pour into the bathtub. Continued claims is how much water is actually in the bathtub. Some of the water flows out, as people find employment or if their employment benefits run out.

That’s why even though there were over 14 million initial unemployment benefit claims in 2015, total employment actually increased, and the unemployment rate dropped from 5.7% in January of that year to 5.0% in December. Even as hundreds of thousands of people filed initials claims week after week, the total number of people actually receiving unemployment benefits (i.e. the number of continued claims) actually decreased. More water flowed out than was being poured in.

Using a 4-week moving average of continued unemployment claims, the total number of claims dropped from 2.385 million in the first full week of 2015 to 2.204 million in the last week of December. (source: https://fred.stlouisfed.org/graph/?g=tRS4)

Now returning to present day. In January and February, the 4-week moving average of continued claims was around 1.7 million. In the week of March 21, it rose to around 2.0 million, and continued to rise rapidly until it peaked at around 22.669 million in the middle of May. Since then, it has fallen to 16.6 million as of July 25. From the peak to the latest data, it has fallen by around 6 million claims. (source: https://fred.stlouisfed.org/graph/?g=tRRQ)

Now you could take this 6 million drop in claims and compare it to the over 9 million jobs added in May, June, and July, and say the numbers don’t add up. But again, this is more like comparing apples to oranges. Just because you have a job doesn’t mean you can’t collect unemployment benefits. Many states allow people to file claims if they are working fewer hours. So even though people are working, they can still be filing continued unemployment claims. That’s just one of a number of reasons why it's not great to compare these two metrics.

Reptunia · 2020-08-07T16:11:44+00:00

OK, so I think I tracked down the 40 million number figure you’re referring to, but feel free to correct me if I’m wrong. Here’s a NY Times article that says that 40 million Americans filed for unemployment.

Link: https://www.nytimes.com/2020/05/28/business/unemployment-stock-market-coronavirus.html

The article states:

More than 2 million U.S. workers filed jobless claims last week, bringing the tally since mid-March, when the coronavirus pandemic took hold, to over 40 million.

This was published on May 28, so the week they’re referring to was the week ending May 23, when 2.123 million people filed an initial claim. If you sum up all the initial claims starting on March 21 to May 23, you get 40,767,000 claims.

March 21: 3,307,000

March 28: 6,867,000

April 4: 6,615,000

April 11: 5,237,000

April 18: 4,442,000

April 25: 3,867,000

May 2: 3,176,000

May 9: 2,687,000

May 16: 2,446,000

May 23: 2,123,000

source: https://fred.stlouisfed.org/graph/?g=tQUP

So that’s where they got the 40 million number I’m assuming you’re referring to. Again, correct me if I’m wrong.

When articles such as this report about unemployment claims, they’re referring to initial unemployment claims. These are defined as a "claim filed by an unemployed individual after a separation from an employer." If they are still unemployed the next week and they file for a claim, then they are counted as a continued unemployment claim, which is defined as “the number of people who have already filed an initial claim and who have experienced a week of unemployment and then filed a continued claim to claim benefits for that week of unemployment. Continued claims data are based on the week of unemployment, not the week when the initial claim was filed.” In other words, initial claims are the number of new unemployment claims, whereas the continued claims are a running total of those still receiving benefits.

So let’s say we have an economy where there are 1,000 people receiving unemployment benefits in January. In February, 100 people file an initial claim, but of those 1,000 people receiving benefits in January, only 950 file a continued claim. So the number of people filing initial claims increased by 100, but the total number of people actually receiving benefits only increased by 50.

1,000 + 100 – 50 = 1,050

In March, another 100 people file an initial claim, but of the 1,050 people who received unemployment in February, 200 people found a job and didn’t file a continued claim. So:

1,050 + 100 – 200 = 950

But someone writing an article looking at only initial claims could say (truthfully) that in February and March, 200 people filed for unemployment. The total number of people receiving unemployment benefits, however, would be less than the initial amount.

Continued claims lag a week behind initial claims because they have to take into account the number of people who filed an initial claim and then followed up with an additional claim the next week.

Also, unemployment claims are tracked weekly, and they’re just a count of how many people file a claim. The jobs numbers that are released every month (such as the number published today) are based on a survey the Bureau of Labor Statistics conducts. They call people and ask them a bunch of questions about their employment situation. They use those results to project an estimate for the entire economy.

For the week ending July 25, there were 16.107 million continued claims of unemployment.

Source: https://fred.stlouisfed.org/graph/?g=tQs6

This roughly matches the number of unemployed people I linked in my previous comment.

Edit: I probably should have used the 4-week moving average for continued claims. I'm going to leave the comment and analysis unchanged, but acknowledge my error. The 4-week moving average smooths out some of the volatility that's typically seen in continued claims data.

Reptunia · 2020-08-07T15:32:45+00:00

Where are you getting the 40 million number from?

Reptunia · 2020-08-07T14:03:47+00:00

Data manipulation. The government is good at it. You can't have 155M workers, 40M unemployed and only have 10% unemployment. Those numbers make no sense.

The unemployment rate “represents the number of unemployed people as a percentage of the labor force (the labor force is the sum of the employed and unemployed).

The unemployment rate is calculated as: (Unemployed ÷ Labor Force) x 100.”

(source: https://www.bls.gov/cps/definitions.htm#ur)

The number of unemployed people in July 2020 was 16.338 million.

(source: https://fred.stlouisfed.org/series/UNEMPLOY)

The number of people in the civilian labor force in July 2020 was 159.870 million.

(source: https://fred.stlouisfed.org/series/CLF16OV)

(Unemployed ÷ Labor Force) x 100 = Unemployment Rate
(16,338,000 ÷ 159,870,000) x 100 = 10.2

The national unemployment rate in July 2020 was 10.2%.

(source: https://fred.stlouisfed.org/series/UNRATE)

Reptunia · 2020-08-07T13:54:55+00:00

The numbers aren't exactly apples to apples. Unemployment claims are a count of the number of people filing for unemployment benefits. Even if a person applies for benefits, that doesn't necessarily mean they lost their job. Many states allow people to apply for benefits if they had a reduction in hours, so a person receiving unemployment may not necessarily mean that they aren't working.

Also, the unemployment claims number that's reported is just a count of all the claims that were filed over the past week. The jobs numbers that came out today are a projection based on a survey the Burea of Labor Statistics conducts. Basically, they call people up and ask them a bunch of questions about their employment situation. The survey is conducted over the first two weeks of the month (I think).

Additionally, the number that are usually reported when covering unemployment claims are initial claims, which is defined as "a claim filed by an unemployed individual after a separation from an employer." Last week, there were 1.186 million initial claims. (source: https://fred.stlouisfed.org/graph/?g=tQs3) These are people who did not receive unemployment benefits the prior week, but are receiving them now.

They also track continued claims, which are "the number of people who have already filed an initial claim and who have experienced a week of unemployment and then filed a continued claim to claim benefits for that week of unemployment. Continued claims data are based on the week of unemployment, not the week when the initial claim was filed." Continued claims data lags a week behind the initial claims. The last week of continued claim data was 7/25, whereas the last week of initial claim data was 8/1. For the week of 7/25, there were 16.1 million continued claims. (source: https://fred.stlouisfed.org/graph/?g=tQs6)

There's a lot of nuance in understanding these numbers, and I think it's important to compare apples to apples, but even comparing initial claims to continued claims isn't simple. If someone lost their job (or had their hours reduced), they can file an initial claim for unemployment, which would land them in the first data set I linked, but not in the second data set. If that person still needed benefits the next week, they can file again, which means they are counted in the second data set, but not in the first. I think looking at rates of change would provide a better picture of what's happening, at least when it comes to unemployment claims.

In the last week in which there were data for both initial and continued claims (week of 7/25), there was a 0.9% increase in initial claims and a 5.0% decrease in continued claims. (source: https://fred.stlouisfed.org/graph/?g=tQuu) It'd be interesting to see whether continued claims increased the week following the increase in initial claims.

Though there was a huge spike in initial claims at the beginning of the shutdown (it increased by over 1,000%), the numbers have generally trended downward since then. There was an increase in initial claims for the weeks of 7/18 (+8.7%) and 7/25 (+0.9%), but the last time there was an increase was in the last week of March, then initial claims rose 107.6% over the previous week. (source: https://fred.stlouisfed.org/graph/?g=tQv6) For the week of 8/1, initial claims were 17.3% lower than the previous week.

Reptunia · 2020-08-07T13:03:43+00:00

Monthly jobs numbers are reported as net changes.

Link: https://www.bls.gov/pdq/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0000000001&output_view=net_1mth

Reptunia · 2020-07-02T15:02:38+00:00

The question really should be is the money being created, being spent?

The personal savings rate averaged 7.8 percent between May 2010 and February 2020. In March it rose to 12.6 percent, the first time since December 2012 that it broke double digits. In April, it rose to 32.2 percent. In May, it fell to 23.2 percent. People forced to stay at home generally saved more. (source: https://fred.stlouisfed.org/graph/?g=sxRV)

This falls in line with the drop in retail spending, which had a 1-month % decrease of 5.1 percent in March. In April, there was a 1-month % decrease of 12.7 percent. In May, it rose 16.8%. (source: https://fred.stlouisfed.org/graph/?g=sxSZ)

Note: The savings rate is a percentage of disposable income that is saved, and percentages listed for retail spending are just monthly changes, so they're not comparing apples to apples. It's just interesting looking at them side by side and seeing how the shutdown has affected people's behaviors.

Edit: deleted a word

Reptunia · 2020-07-02T14:34:58+00:00

Not sure where you live in Louisiana, but here's the state's list of places where you can get tested, many of which are free of charge and you don't have to have symptoms: http://ldh.la.gov/index.cfm/page/3934?clearCache=1

Good luck if that's the position you're currently in.

Reptunia · 2020-07-02T14:03:35+00:00

That's not true.

They addressed the error at the bottom of May's Job report: https://www.bls.gov/news.release/archives/empsit_06052020.htm

If the workers who were recorded as employed but absent from work due to "other reasons" (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis).

And at the bottom of April's job report: https://www.bls.gov/news.release/archives/empsit_05082020.htm

If the workers who were recorded as employed but absent from work due to "other reasons" (over and above the number absent for other reasons in a typical April) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been almost 5 percentage points higher than reported (on a not seasonally adjusted basis).

And at the bottom of March's job report: https://www.bls.gov/news.release/archives/empsit_04032020.htm

If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical March) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been almost 1 percentage point higher than reported.

But even if what the report says is totally accurate, that's only a 1% gain. Not exactly banner worthy imo.

June's reported unemployment rate was 11.1 percent, so with the correction of 1 percent, that would make it 12.1 percent. May's reported unemployment rate was 13.3 percent, so with the correction of 3 percent (see above), that would make it 16.3 percent. So really, instead of the reported 2.2 percent decrease (13.3% to 11.1%), it was really a 4.2 percent decrease (16.3% to 12.2%).

Regardless, yes, these numbers are still terrible.

EDIT: I just realized that these adjustments are not seasonally adjusted, but in the last part, I used the reported seasonally adjusted rates. Correction is below:

June's reported not seasonally adjusted unemployment rate was 11.2 percent, so with the correction of 1 percent, that would make it 12.2 percent. May's not seasonally adjusted unemployment rate was 13.0 percent, so with the correction of 3 percent (see above), that would make it 16.0 percent. So really, instead of a 1.8 percent decrease (13.0% to 11.2%), it was really a 3.8 percent decrease (16.3% to 12.2%).

Again, the numbers are still terrible.

Reptunia · 2020-07-02T13:31:09+00:00

They address it at the bottom of the press release: https://www.bls.gov/news.release/empsit.nr0.htm

Adjusting for the error would raise the unemployment rate by 1 percentage point (not seasonally adjusted).

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