September 6, 2008
STEEP JOB LOSSES
ADD TO PRESSURE
FOR U.S. STIMULUS
533,000 ARE CUT
The nation’s employers cut 533,000 jobs in November, the Bureau of Labor Statistics reported Friday.
No, actually, that’s not what the Bureau of Labor Statistics reported Friday. Here’s what the Bureau of Labor Statistics reported Friday.
Employment Situation Summary
THE EMPLOYMENT SITUATION: NOVEMBER 2008
Nonfarm payroll employment fell sharply (-533,000) in November, and the unemployment rate rose from 6.5 to 6.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. November’s drop in payroll employment followed declines of 403,000 in September and 320,000 in October, as revised. Job losses were large and widespread across the major industry sectors in November.
If the NY Times headline were correct, not a single person was hired in November, and 533,000 were cut from their jobs. Of course, that’s not what happened. Some unknown number, N, of people were hired, and N+533,000 people lost their jobs. The article was written by Louis Uchitelle, one of the smartest financial reporters the Times has. One can only imagine that an editor without a whit of financial acumen or common sense edited the article into nonsensicality.
By the way, the headline in the online edition was rather different and far more factual (“U.S. Loses 533,000 Jobs in Biggest Drop Since 1974″) but the quoted paragraph remained unchanged.
Needless to say, the details of the BLS report were grim. Employment in auto dealerships alone dropped by 24,000. In the long run, that’s good – the existing dealership programs suck a lot of profit out of making cars that could be going to the car companies themselves. The car companies have been trying to change the dealership deal for decades, but are prevented by state laws, the kinds of laws that Republicans rail against but continue to vote for because the dealerships are great lobbyists and campaign contributors.
Total nonfarm payroll employment fell by 533,000 in November, bringing losses to 1. 9 million since the start of the recession in December 2007.
Two-thirds of these losses occurred in the last 3 months.
The Times pointed out that even if Obama’s stimulus package should increase employment by its promised 2.5 million, that would barely break us even for the past year. And some big shoes have yet to drop. The auto companies have promised to shed more workers (indeed, they’re likely to be obligated to do so by the terms of the bailouts they’re getting), and “employment in financial activities” declined by only 32,000. We’re expecting more than that here in New York City alone.
In addition to the increase in the official jobless rate, from 6.5 to 6.7 percent, the economic pain includes the underemployed, and discouraged workers.
Over the month, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) continued to increase, reaching 7.3 million. The number of such workers rose by 2.8 million over the past 12 months. This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs.
Persons Not in the Labor Force (Household Survey Data)
About 1.9 million persons (not seasonally adjusted) were marginally attached to the labor force in November, 584,000 more than 12 months earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 608,000 discouraged workers in November, up by 259,000 from a year earlier. Discouraged workers are persons not currently looking for work specifically because they believe no jobs are available for them. The other 1.3 million persons marginally attached to the labor force in November had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.
The Times, for some reason, didn’t report these additional stats, though the official unemployment number is such a limited statistic I don’t see how you can understand the job situation without them. Then again, I don’t see how you can report a net job loss as so many jobs “cut.”