The “must have charts” crowd will have to take a rain check, but the tables below make telling points about the “Rebound? What Rebound?” Economy (HT to BizzyBlog commenter Greg and Geoff at Ace’s Place for the nudge, and to Karen at the Bureau of Labor Statistics for the guidance):
- On a seasonally adjusted basis, July’s full-time employment was down over 800,000 compared to June 2009, the month the recession as normal people define it ended. Part-time employment was up slightly. Unfortunately, each of the data sources involved has its own independent seasonal adjustments, which is why the annoying differences on the third line are there.
- Given the quirks of seasonality, it’s important to look at the raw (i.e., not seasonally adjusted) numbers. Comparing July 2011 to July 2009 (to negate seasonality), we see that full-time employment this past month was 425,000 lower than it was two years ago. Part-time employment was also lower, by almost a quarter-million.
Two years into an alleged recovery we have fewer total workers. I know the Establishment Survey says differently, but given that it’s based on calls to companies, it’s not going to pick up a lot of employees who are out there at smaller entities or who are individually self-employed.
Let’s look at the differences there:
- Comparing seasonally adjusted July 2011 to June 2009, we see that the gap between the two surveys has narrowed by almost 1.4 million, a 15% drop in the difference.
- Comparing not seasonally adjusted July 2011 to July 2009, we see that the gap between the two surveys has narrowed by over 1.7 million, another 15% drop.
What does it mean? To me, it indicates number of things, though the mix can’t be determined, and readers may have additional ideas:
- People who are looking for a way to make a living through work are looking to hook up with established employers instead of venturing forth on their own. This pattern of the past two years is yet more evidence that the Birth/Death Model the BLS uses to estimate net unfound jobs created or lost is highly suspect in a fear-based economy. Fewer people are starting up businesses, and when they do, they don’t hire many other people (if any).
- Given that total employment per the Household Survey has declined (even though the civilian 16-and-over population is up by about 4 million in the past two years), more people have given up seeking work or gainful employment and/or are working “off the books.” More than a few of them have decided to retire and start taking Social Security benefits to get by, but that doesn’t get you anywhere near a 4 million person decline.
- It may be that the explosion in payments to individuals, the ritual extensions of unemployment benefits, and the deliberate easing of benefit requirements in many government entitlement programs (e.g., food stamps, traditional welfare, even up to and including free cell phones) is leading many to conclude that they can get by on what they’re receiving indefinitely.
It gets tiresome repeating what should be obvious, but this is unsustainable.