Media Spin Abounds Over Last Friday’s Employment Report
On Friday, Uncle Sam’s Bureau of Labor Statistics reported that the nation’s unemployment rate rose to a seasonally adjusted 9.7% in August, and that the economy lost another 216,000 seasonally adjusted jobs.
In various ways, the press tried to put a happy face on the news and otherwise tried to minimize its impact. It also continued, as it has for years, to ignore what really happened on the ground (i.e., the not seasonally adjusted numbers) during the month; in August, a look at that info punctures any illusion that the employment situation is improving. It also ignored prior-month downward revisions to both June and July totaling 49,000 seasonally adjusted jobs.
Here are the first four paragraphs of the Friday report by Christopher S. Rugaber at the Associated Press:
In Rugaber’s defense, if his “not all bad” reference red-boxed by me is to the economy as a whole, he’s correct.
Two paragraphs later in his report, he writes that “many analysts say the economy should grow by a healthy 3 to 4 percent in the third quarter, pulling the United States out of the longest recession since World War II.” That would indeed be welcome news after four dreadful quarters brought on by what I have been referring to since July of last year as the POR (Pelosi-Obama-Reid) Economy, which has turned during the past four quarters into the POR Recession (radio talker Mark Levin would prefer to use the term “repression“) As Normal People Define It. In addition to a person Rugaber cited, I found some corroboration for the contention that growth will resume at this link at the Philadelphia branch of the Federal Reserve, where in mid-August “professional forecasters” predicted third-quarter annualized growth of 2.4%.
But if Rugaber or anyone else thinks that the employment situation is “not all bad,” they are sadly mistaken. That’s because, despite the lower seasonally adjusted job-loss number, what actually happened on the ground in August (i.e., not seasonally adjusted) went the wrong way for the 22nd consecutive month:
After narrowing the year-over-year decay to 42,000 in July, August 2009’s on the ground number was worse by 131,000. Also, August’s report revised July’s figure downward by 110,000 jobs; what had appeared last month to be the first year-over-year improvement vaporized. The last time there was a year-over-year improvement in the not seasonally adjusted jobs added/lost figure was October 2007.
Meanwhile, at the New York Times, Peter S. Goodman and Jack Healy were rewriting history, trying to convince readers that the expected recovery will be jobless, as it was during the last downturn:
Many experts envision a jobless recovery, in which the economy grows but job losses persist. That would reprise the end of the last recession in 2001, when payrolls continued to decline for nearly two years afterward.
Sorry, Peter and Jack, payrolls did not “continue to decline” during the entire period in question.
As seen above, there was a net decline in seasonally adjusted jobs from December 2001, the first month after the recession as the National Bureau of Economic Research defined it ended, until August 2003, 21 months later. But five of those months showed gains, October and November 2002 showed consecutive gains (it’s pretty hard to claim something “continued” if it had a break of two full months), and the final four of the 21 months had a net loss of only 25,000 jobs. During every month of the past year (September 2008 – August 2009), including the past two months which we are now being told is part of a recovery, that many seasonally adjusted jobs have been lost every 3-4 days.
After the 21-month period Goodman and Healy cited, the Bush tax cut-driven economy added jobs for 46 consecutive months, the longest job-adding winning streak since the Reagan tax cut-driven economy added jobs for 82 consecutive months (September 1983 to June 1990).
If Goodman and Healy are going to persist in call that 2001-2003 time period a “jobless recovery,” I would hope that they call one where jobs are consistently lost in monthly six-figure amounts a “job-loss recovery.” But I don’t expect it.
Cross-posted at NewsBusters.org.
The economy never is “all bad” or “all good,” so that first statement by the AP is rather meaningless and somewhat of a cheat. I wonder how many times during the Reagan boom did the MSM begin a report on the economy with, “Unfortunately, it’s not all good?” I’m sure it had to happen at least once.
And I find it really annoying that when Bush was still in office, the AP did everything it could to make the economy sound worse than it was and now that O’s heavy handed reign has begun they do everything to make the economy sound better than it is. How about some balance? Tom has done a good job of pointing out both the good and bad of both periods and cutting through the MSM’s bouncing from one extreme to the other, so why can’t AP?
Comment by zf — September 7, 2009 @ 5:49 am
I hope someone can come up with a montage of the negative way the legacy Media qualified job gains under GWB vs. job losses under Doh!-bama.
Comment by Joe C. — September 7, 2009 @ 9:47 am
The comments are off on that post, so I’ll make the statement here. Nothing against Labor Day (although it seems to me it was established not to celebrate the individual American workers but by Big Labor to pat themselves on the back for fighting evil capitalism) or American workers, but if we’re going to celebrate it can we find a better mouthpiece than the Department of Labor?
I mean their spiel is not only historically inaccurate but simplistic, whitewashed and filled with socialistic talking points.
That opening statement by the long-dead Samuel Gompers is particularly galling. Labor Day is the only “pure” holiday and all others are based on strife and greed? Hello, the last time I checked, the whole labor movement was based on antagonizing owners and employees (because they were all evil and exploitative supposedly) and gaining more money and power. That’s not “strife” and “greed”? And the fact is, Labor Day’s founders were just as motivated to have a day to bash industrialists and big business and they were to congratulate the American worker.
The reason Labor Day celebrations are increasingly becoming a problem as the DoL piece puts it is because labor unions (especially the bigger ones) has become more radical and confrontational as the years have gone by. Not to mention thuggish, coercive and corrupt. Not saying all labor people and labor unions are bad and all employers and companies are saints, or that labor movements have done no good at all, but that history of Labor Day provided by the government is ridiculously hagiographic and propagandist.
Labor Day needs a transformation. We should remove it from its elitist roots and refocus it to celebrate all workers big and small, and not the current celebration of Big Labor Unions. And we need to remember that without the individual efforts (and yes, labor) of such visionaries and leaders like Henry Ford, Edison, Rockefeller, Whitney, the Wright Brothers, Ray Kroc, Carnegie, and the list goes on and on the efforts of the average worker would be directionless and in the end admirable but fruitless and our standard of living would never have been attained. Don’t get me wrong, blue collar workers are vital and those who do their work with pride and dignity should be celebrated, but as a whole they are not the end all and be all of labor.
Comment by zf — September 7, 2009 @ 10:45 am
The two graphs here belie the claims of the administration about creating or saving a single job.
http://michaelscomments.wordpress.com/2009/09/04/august-unemployment-data/
What’s significant about these graphs? The first graph shows how incompetent the Obama administration was in projecting the success of the so called stimulus, but more importantly we should not ASSUME that declining rate (second derivative) of increase in the unemployment rate reflects an absolute value, it doesn’t. Nor should one assume that the overall eventual shape of the actual line reflect in any way the two lines below it since if the assumptions of the first two projections were wrong, it certainly indicates that the actual shape will in any way be similar either.
Graph #2, destroys the argument that any jobs were saved making Uncle Joe and The One liars on the order of Baghdad Bob. Furthermore, notice that any normal upswing in total employment due to seasonal hires for Christmas and Summer were non-existent. That was a disaster for teenagers and those at the low end of the economic scale. If nothing changes here with respect to investment in plant and equipment by the manufacturing sector, which is where ALL recoveries begin, we are looking at a double dip recession.
Comment by dscott — September 7, 2009 @ 11:14 am
First, let me profess to being a regular reader who enjoys the crisp writing, empirical support for your arguments, and the intellectual thrashing you give to the “bad guys.” Keep up the good work.
The following is just a suggestion. There are a lot of good financial blogs that I have started reading on a daily basis. You make no reference to them and, even worse, they are not in your blogroll. I suggest you vist Matt Stiles @ Futronomics, Mike Shedlock @ Global Economic Analysis, ESPECIALLY Ken Denninger (he of the famous running feud with CNBC’s Dennis Kneale) @ The Market Ticker, David Merkel @ The Aleph Blog, and, last but not least, Zero Hedge, which exposed HFT and Goldman Sachs market manipulation scams. They are carrying the battle forward, as are you. Support them.
Speaking of the latest employment figures, here’s a slice of good analytical work from Dave Rosenburg, by way of Mike Shedlock:
“…While nonfarm payrolls were basically in line with the consensus, declining 216,000 in August, there were downward revisions of 49,000 and the details were simply awful. The fact that 65% of companies are still in the process of cutting their staff loads is quite disturbing — even manufacturing employment fell 63,000 in August, to its lowest level since April 1941 (!), despite the inventory replenishment in the automotive sector and all the excitement over the recent 50+ print in the ballyhooed ISM index. The fact that temp agency employment is still declining, albeit at a slower pace, alongside the flat workweek and jobless claims stuck at 570,000, are all foreshadowing continued weakness in the labour market ahead. Until we see signs of a sustained turnaround in the jobs market all bets are off over the sustainability of any economic recovery.
What was really key were the details of the Household Survey, which provide a rather alarming picture of what is happening in the labour market.
First, employment in this survey showed a plunge of 392,000, but that number was flattered by a surge in self-employment (whether these newly minted consultants were making any money is another story) as wage & salary workers (the ones that work at companies, big and small) plunged 637,000 — the largest decline since March (when the stock market was testing its lows for the cycle). As an aside, the Bureau of Labor Statistics also publishes a number from the Household survey that is comparable to the nonfarm survey (dubbed the population and payroll-adjusted Household number), and on this basis, employment sank — brace yourself — by over 1 million, which is unprecedented. We shall see if the nattering nabobs of positivity discuss that particularly statistic in their post-payroll assessments; we are not exactly holding our breath.”
Comment by boqueronman — September 7, 2009 @ 12:27 pm
#5, thanks for the tips, and the points, and blogroll suggestions. I’ve been remiss on the blogroll for a while. Keeping up with routine stuff has been all I can do. I have added those links and am trying to make a point of going to the econ links more often.
Comment by TBlumer — September 7, 2009 @ 8:14 pm
#4, this is the same page that was at DOL a year ago.
I see Labor Day currently as a celebration of the American worker and honest labor, not exclusively the American union worker. Sure, the unions try to hijack it, but we know better. DOL’s post mostly conforms to that view. That is in stark contrast to how the rest of the world views May Day.
Comment by TBlumer — September 8, 2009 @ 12:08 am
when the employment figures would be 200 or 300k in POSITIVE territory… and that was month after month… but I’m “so” glad to hear things are going so well!!!
Comment by Mobile-phone-blog — September 9, 2009 @ 12:52 am