RSS Feed by Calculated Risk on 9/07/2009 01:05:00 PM
Monday, September 07, 2009
Comparing BLS Job Losses and DOL Unemployment Claims
A frequent question is how do the 570,000 initial weekly unemployment claims, as reported by the Dept of Labor (DOL), correspond to the 216,000 in monthly job losses as reported by the Bureau of Labor Statistics (BLS).
If about 2.4 million people filed initial weekly claims in a month (570,000 X 4 weeks), how come the economy only lost 216 thousand net jobs in August?
First, I think it is helpful to look at total hires and separations each month. The BLS has a survey called "Job Openings and Labor Turnover Survey" (JOLTS) that provides this information. The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers.
Note: Remember the CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people. See Jobs and the Unemployment Rate for a comparison of the two surveys.
The following graph shows hires (Green Line), Quits (blue bars) and Layoff, Discharges and other (red bars) from the JOLTS. Red and blue added together equals total separations.
Unfortunately this is a new series and only started in December 2000.
Click on graph for larger image in new window.
Notice that hires (green line) and separations (red and blue together) are pretty close each month. When the green line is above total separations, the economy is adding net jobs, when the green line is below total separations, the economy is losing net jobs.
Although initial claims are for people and JOLTS is for positions, this does show why initial claims are so high. In the first six months of 2009, an average of about 2.8 million jobs were lost involuntarily each month. If all of these people applied for unemployment claims, the average initial weekly unemployment claims would have been about 650,000 per week (2.8 million divided by 4.3 weeks per month). In fact weekly claims averaged just over 600,000 per week for the first six months of 2009. Note: "quits" don't receive unemployment insurance.
So even though there were about 4.2 million new hires each month during the first six months of 2009, people who lose their jobs involuntarily during a recession have a difficult time finding a new job right away, and most apply for unemployment benefits.
In better times, like 2005, about 2.26 million jobs were lost involuntarily each month, but weekly claims only averaged 330,000 per week (2.26 million divided by 4.3 week is 525,000). This shows when the economy is adding net jobs, a larger percentage of people can find new jobs right away and don't apply for unemployment insurance. But many people still do file for benefits.
Although we don't have JOLTS data for the '90s, even in the best of times for employment (like 1997), the U.S. averaged about 230 thousand initial unemployment claims per week - even though the economy added almost 3.4 million net jobs for the year. This just points out there is significant employment turnover in the U.S. economy, and many people lose their jobs involuntarily even in good times.
Final Note: Since weekly initial unemployment claims are related to involuntary separations - and the overall strength of the job market (Can people find a job right away?), there is no magic formula between initial claims and net jobs. It does appear that initial weekly claims will have to fall to about 400,000 per week before the economy starts adding jobs, see from Brad DeLong: Payroll Employment Starts Growing When Seasonally-Adjusted Unemployment Claims Fall Below 400K per Week or so...
Profiles in Discouragement: Unemployed and Uncounted
by Calculated Risk on 9/07/2009 09:50:00 AM
From Michael Luo at the NY Times: Out of Work, Too Down to Search On, and Uncounted (ht Kai, Ann)
They were left out of the latest unemployment rate, as they are every month: millions of hidden casualties of the Great Recession who are not counted in the rate because they have stopped looking for work.Luo provides short stories about four people who have given up looking.
But that does not mean these discouraged Americans do not want to be employed. As interviews with several of them demonstrate, many desperately long for a job, but their inability to find one has made them perhaps the ultimate embodiment of pessimism as this recession wears on.
...
The official jobless rate, which garners the bulk of attention from politicians and the public, was reported on Friday to have risen to 9.7 percent in August. But to be included in that measure, which is calculated by the Bureau of Labor Statistics from a monthly nationwide survey, a worker must have actively looked for a job at some point in the preceding four weeks.
For an increasing number of people in this country who would prefer to be working, that is not the case.
Sunday, September 06, 2009
Survey: “The Anguish of Unemployment”
by Calculated Risk on 9/06/2009 08:34:00 PM
Laura Conaway at NPR Money highlights a new survey by the Rutgers University John J. Heldrich Center for Workforce Development.
From the Press Release:
A comprehensive national survey conducted among 1,200 Americans nationwide who have been unemployed and looking for a job in the past 12 months, including 894 who are still jobless, portrays a shaken, traumatized people coping with serious financial and psychological effects from an economic downturn of epic proportion.Here are the raw comments and stats from the survey.
...
The survey shows that the great recession of 2007-2009 may have long-lasting financial and psychological effects on millions of people, and therefore on the nation’s social fabric. Two thirds of respondents say they are depressed, over half have borrowed money from friends or relatives, and a quarter have skipped mortgage or rent payments. ...
More than half of the jobless think the changes in the economy will be fundamental and lasting, and when the unemployed are asked when the economy will recover, only 20% believe it will do so in the next year.
Click on graph for larger image in new window.From the report:
Over half of the unemployed have lost their jobs for the first time ... Job loss is hitting more affluent workers and educated professionals hard — a metric of the recession’s seismic impact. More than one in four of those who were unemployed for the first time earned $75,000 or more in their previous job; one in four first-time unemployed workers have at least a four-year college degree.
Summary Post
by Calculated Risk on 9/06/2009 02:00:00 PM
A few posts of interest this last week:
Enjoy the weekend!!! Best to all.
A Surge in Homeless Children
by Calculated Risk on 9/06/2009 11:00:00 AM
In the comments yesterday we were comparing the "feel" of the current recession compared to the early '80s. Back then it seemed there were many more homeless people, and camps of "Reaganvilles" (an echo of the Hoovervilles during Depression) were sprouting up around the country. I commented that it seems there are far fewer homeless people now, so this story caught my eye ...
From the NY Times: Surge in Homeless Children Strains School Districts
While current national data are not available, the number of schoolchildren in homeless families appears to have risen by 75 percent to 100 percent in many districts over the last two years, according to Barbara Duffield, policy director of the National Association for the Education of Homeless Children and Youth, an advocacy group.
There were 679,000 homeless students reported in 2006-7, a total that surpassed one million by last spring, Ms. Duffield said.
With schools just returning to session, initial reports point to further rises. In San Antonio, for example, the district has enrolled 1,000 homeless students in the first two weeks of school, twice as many as at the same point last year.
