Increase of 1 Million Private Sector Jobs This Year?
This graph and post were inspired by a recent Scott Grannis post titled "400,000 New Jobs and Counting," where Scott estimates that "new private sector jobs have increased by 400K so far this year, with 300K of those new jobs created in March alone."The chart above shows the monthly changes in private sector employment, calculated by taking the difference between total "Civilian Employment" (data here) from the BLS Household Survey and total "Government Employment" (data here) from the Establishment Survey.
Using that measure of private sector employment:
Private sector jobs increased by 543,000 in January, 330,000 in February and 225,000 in March, for a total increase so far this year of 1,098,000 private sector jobs - the largest three-month increase in almost five years (since the three-month period ending May 2005).
Scott points out that "the household survey can have random blips, such as the 500K drop in private sector jobs in December, and the 550K jump in January." So if we ignore December and January as random blips, there would still be 555,000 private sector jobs created in February and March.
Bottom Line: Whether the increase in private sector jobs this year is 400,000, or 555,000 or 1.098 million, any of those estimates suggest that the improvements in the private sector job market are much better than what the payroll survey is showing: a total increase of 162,000 jobs this year (data here).
Comments welcome.
16 Comments:
this is just crap - unless he is calling waiting in an unemployment line a job created
"the household survey can have random blips, such as the 500K drop in private sector jobs in December, and the 550K jump in January." So if we ignore December and January as random blips ...
Or, if we ignore the 300K that were supposedly created in March, there has been little if any job creation in the private sector.
That would jibe with this ADP report: Private sector continues to shed jobs, CNNMoney
NEW YORK (CNNMoney.com) -- Private-sector employers continued to cut jobs in March, highlighting the challenges still facing the nation's job market, according to a report released Wednesday.
Automatic Data Processing, which processes paychecks for one in every six U.S. employees, said private-sector employers cut payrolls by 23,000 jobs in March ...
Here's what the BLS says:
"Because of the complexities of the American economic system and the wide variety of job arrangements and jobseeking efforts, the definitions of employment and unemployment must be specific to ensure uniformity of reporting at any given time and over any period of time. When all of the details are considered, definitions may seem rather complicated."
The BLS also says:
"People are considered employed if they did any work at all for pay or profit."
My comment: Private sector employment may pick-up, because unemployment benefits are beginning to expire for many. Personally, I wouldn't consider working one hour a month a "private sector job."
Hmmm, so the following won't impact on future job growth, eh?
Courtesy of the WSJ: On top of AT&T's $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks...
The idea that these clowns on the Hill and in the Oval Office don't have a clue about the real world won't impact on future employment possibilities, eh?
I mean just consider the babbling, moronic rantings of one Barry Sotero...
Personally I hope you're right about the numbers of new jobs...
The author forgets to thank the current administration's policies in creating all of these jobs....
>"My comment: Private sector employment may pick-up, because unemployment benefits are beginning to expire for many."
Hmmm... You may be on to something here.
From articles:
November 2009: "Some nine million people now receive unemployment benefits, five million on the initial state programs and four million through federal extensions."
"Renewing all federally paid extended benefits for 2010 would cost about $80 billion."
"For those who have exhausted 99 weeks of benefits, there are no more extensions on the horizon."
My comment: The "desperately unemployed" may increase substantially in 2010.
this is just a meaningless compounding of error rates.
combining stats like this is very difficult at best and useless at worst.
Ron H, You suggest that employment numbers will rise because unemployment benefits will run out. Only 60 to 65% of people that are unemployed actually receive benefits. According to Raj Chetty, a Harvard Economist who has studied unemployement, states it is a fight to get benefits for many.
A substantial portion of the 35 to 40% unemployed are to busy trying to find a job rather then fight for benefits. I have never received any jobless benefits but I try and not be smug about it.
>"My comment: The "desperately unemployed" may increase substantially in 2010."
Or, some may find jobs that they might not have considered accepting previously.
I believe BLS data shows that many people find jobs just before their unemployment benefits run out.
If you subsidize something, you will get more of it. This applies in all cases, no matter what the 'something' is. This is one of those economic laws that cannot be broken.
The flip side of this is that if you tax something, you will get less of it. Always true.
gettingrational, Thanks for the links. the video and article are highly informative.
I guess I could have added a qualifier to my quote of Peak Trader's comment as follows:
>"My comment: Private sector employment may pick-up, because unemployment benefits are beginning to expire for many...." of the 65% of the unemployed who actually receive benefits.
It's not clear from the video whether the 65% figure Dr. Chetty uses refers to All unemployed, or just those eligible for benefits.
I don't know about Florida, but I DO know that in California, once benefits start, a person can get a check every week, until benefits run out, without ever having to prove they are looking for work. Predictably, this helps make unemployment benefit premiums for employers in California among the highest in the nation. Just ONE of the many reasons businesses are fleeing California.
I know of several people who are unemployed, who seem to be in no hurry to get back to work. In fact, one couple I'm acquainted with have lived on his pay and her unemployment benefits since she lost her job nearly two years ago. She has become a stay-at-home mom, and has never once looked for employment, yet she receives a check every week like clockwork.
Abuses like this make it harder for those who truly need help.
As I would expect, other viewpoints on the total unemployment picture were not mentioned in the one sided NPR article.
As for Dr. Raj Chetty, the article in "The American" makes him appear to be a master of restating the obvious. Among his "revolutionary" ideas, are the following:
-Corporate CEOs are very interested in their own compensation.
-If people are made aware of the total cost of something they wish to purchase, they may buy less of it.
-And this Gem:
"He had a new way of looking at the problems of the unemployed... Raj emphasized that they find it very difficult to meet their prior commitments. For example, they must pay their rent or their mortgage, and these commitments very much add to the difficulties of being unemployed."
Well, DUHH! Who'd have thought?!
Chetty then insults the intelligence of those who qualify for the Earned Income Credit:
“They just know that after they file their taxes, they get a big check,” Chetty said. “That is seriously problematic for public policy, because the whole point of the program is to give people an incentive to work. To give them an incentive to work, they really need to understand that they’re really being paid $14 an hour, not $10 an hour.”
In my opinion, recipients understand this only too well. They know the free $4.hr will shrink rapidly as income increases, so why should they work more for little or no increase in income? They are not the dummies Chetty thinks they are.
Don't get me wrong, I'm not unsympathetic to the plight of those who have lost their jobs, but I DO have a problem with being forced to pay them extended benefits through my federal taxes.
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Right, according to the BLS:
"As of February 2010 there were 14.9 million unemployed, or 9.7% of the available work force."
Including in November 2009:
"Some nine million people now receive unemployment benefits, five million on the initial state programs and four million through federal extensions."
Obama - Thnks for the 1 Millon Jobs !!!!!!!!!!!
Obmaa - you are fantastic !!!!!!!!
Obama promised the unemployment rate wouldn't rise above 8% if his $787 billion stimulus passed. Moreoever, there was much more spending passed after that.
If there was a $787 billion tax cut instead (or over $5,000 for every worker), there likely would've been a real V-shaped recovery with the unemployment rate not rising above 10%, and likely not reaching 8%.
I doubt uncontrolled spending and taxing, and taxing and spending, while attacking much of the private sector and the free market, will create many full-time private sector jobs. The next disaster may be strangulation instead of regulation.
I doubt uncontrolled spending and taxing, and taxing and spending, while attacking much of the private sector and the free market, will create many full-time private sector jobs.
When the private sector wishes to act against a recovery in the US, it would be rational for the government to act. The private sector should not be given a pass for sustaining a crisis until it is no longer politically expedient to have one.
If they want to take the proverbial supports out of the economy and purposefully collapse it - it would only be right to call them before we're all under the same wreckage.
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