Can someone explain the logic that more jobs where created than expected but the rate went up

[bigdarryl]

WTF!! back to 9.00%

[Pirate Smile]

1. Here

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x669537

[pnwmom]

2. More people got back into the job market who had been out.

You're not counted as unemployed unless you're looking for a job.

[bigdarryl]

4. but the so called experts for months have been saying there needs to be

at least 170,000 jobs created a month to bring down the unemployment rate well looks like to me there changing there tune.I think there purposely trying to keep the rate up to make the President look bad on the economy that's my take on this bullshit!!

[onenote]

5. who is the "they" that are trying to make the President look bad?

His own Department of Labor?
Its the way the numbers work. The last time it dropped it was unexpected because the number of jobs added wasn't that high. But, once again, its not a simple one-to-one relationship. The number of people entering (or re-entering) the workforce matters too.

[golfguru]

12. If they count how many are paying FICA tax

they will have extremely accurate count of actually employed.
Every single employed soul pays FICA tax.
Then use census data which is fairly accurate count of
adults in country, to compute actual employment rate.

These looking for work, not looking for work, given up
looking for work are all meaningless numbers.

[pnwmom]

19. That would show an employment figure, but not a rate.

The only way to calculate full employment or an employment or unemployment "rate" is to know what the total population of unemployed, looking-for-work people is.

[golfguru]

23. Correct but...

it is silly to ignore all those millions who are not formally and actively looking. OTOH the actual number of jobs versus adult population is a sure way to know how many are working compared to all adults out there. During prosperous number this ratio will be much better than during recessionary periods, reflecting true economic situation.

[dkf]

3. We always expected it would be that way.

[OHdem10]

6. The rate went up because a lot of people who had no job for

months, years decided to come back and start looking
for work seriously once again.

For those months years they did not show up in the count.
Employment rate is based on numbers seriously seeking work.
We have possibly million who have given up and on the sidelines.
They are not counted in this report. When they start looking
once again they will show up in the numbers.

The NEW JOBS is a separte number. Just what it says new jobs
created in the time period listed by Private Sector.

[valerief]

8. How do they determine when an uncounted person is seriously looking for work vs.

not looking for work?

You don't get a job until you get offered one, no matter how seriously you're looking for one.

[dmallind]

14. They ask

"do you do paid work"
Y = employed, N= determined by next question


"have you looked for work in the last four weeks?"
Y = unemployed N = not actively seeking work

Bit more complicated than that, but the basic definition.

Not your question, but often misunderstood, is that eligibility for or expiration of benefits is not at all considered in the UE rate.

Extrapolate from your 130k or so sample to the population size and there you have it.

[valerief]

16. But you're talking about people working or collecting, not the people

you say are not actively looking for working. How do you know people who are not collecting and not working are not also actively looking for work? Because they haven't gotten a job? That's no indicator. The jobs aren't there to get.

[dmallind]

18. Nope - the survey does not only focus on those collecting

It is a randomized sample of 60000 households or so (approx 130k working age people). The collection of benefits is nothing to do with it.

I'm not sure what confusion remains. Are you wondering how a 130000 sample can apply to a workforce 1000 times larger (in which case statistics tells us the margin of error is very very small), or is it that I have not been clear enough? If a respondent says they looked for work they are unemployed. They are not in the workforce if they have not looked for work. Their chance of success is not relevant to the definition of being in the workforce or not. The stay at home parent with a wealthy spouse is not looking for work so is not unemployed. The disabled high school dropout with a felony record who last worked ten years ago and (probably accurately) thinks there is not much chance of him getting a job so he doesn't bother looking is counted in U6 but not U3. His more optimistic ex-cellmate who is still looking despite equal status is counted in U3 as unemployed no matter how improbable it is he will find one. U3 is for people who are still looking for work.

The national UE rates (all of them) are extrapolated from the survey, NOT from those collecting benefits.

[Pirate Smile]

7. 2 different surveys.

The numbers come from two different surveys and sometimes there is some static between the two. There is a bit of an explanation of that in the first reply to your OP.


Correcting the Picture on Jobs

By DAVID LEONHARDT

This is one of those months when it’s impossible to tell a consistent story about the jobs report.
Job growth was unexpectedly strong last month. The unemployment rate rose to 9 percent, from 8.8 percent, its biggest one-month increase in more than a year-and-a-half.

Which of the two numbers should you believe? The short answer is the job-growth number. The labor market appears to be improving. The rise in the unemployment rate is mostly a reflection of the fact that the rate fell by an artificially large amount over the previous several months.

It doesn’t actually mean unemployment rose last month. Instead, it reflects a kind of statistical catch-up. The old picture of the job market, as presented by the household survey, had been too optimistic. (Did anyone really believe that the job market recently improved at its most rapid two-month pace since the 1950s, as the unemployment rate suggested?) Today’s report helps correct the picture. This is simply the nature of surveys: they have noise in them.

-snip-
The job market continues to improve, which is certainly welcome news. But the pace of improvement remains modest. Unfortunately, that’s the typical pattern in the wake of a financial crisis.

Update: Some readers have asked whether the unemployment rate can rise even as employment is growing because more people start looking for work — and thus count as officially unemployed. Theoretically, the answer is yes. This does happen sometimes. But it didn’t happen in April. The unemployment rate rose last month because the household survey showed a decline of 190,000 jobs, not because of a surge in job seekers. That’s why there is no way to reconcile last month’s results of the household survey and employer survey. They make sense only in the context of previous months.

http://economix.blogs.nytimes.com/2011/05/06/correcting-the-picture-on-jobs/

[karnac]

9. the other issue is some people HAVE to look for work now.

That adds to the unemployed numbers.

After unemployment runs out, credit cards maxed, bill mounting.
can no longer wait or look for a job in your field.
Have to get ANY job. even at Mcdonalds. btw, of those new 240k jobs, about 60k actually ARE at Mcdonalds.

http://www.mediaite.com/online/the-return-of-mcjobs-latest-job-report-shows-increase-thanks-to-mcdonalds/

[TTUBatfan2008]

13. Regarding unemployment...

In the state of Texas you have to provide proof that you are actively searching for a job. People who are actively seeking a job but are on unemployment benefits in Texas would be counted in the unemployment rate. I'm not sure what the rules are for unemployment benefits in other states. My sister was recently on unemployment benefits and was constantly looking for jobs. She finally got one a week or so ago.

[dmallind]

15. So nobody at all left a job at McD's last month?

That's what it would have to be to get the 60k as additional jobs.

[karnac]

17. thats different. mcdonalds opend up many NEW sites last month.

ergo, new jobs....

http://www.msnbc.msn.com/id/42412605/ns/business-consumer_news/

[OhioBlue]

24. no... if you're collecting unemployment you're required to

seek employment so you would be counted in the unemployment rate.

[Yavin4]

10. Here's An Example

Picture a two income couple. One gets laid off in early 2010, and s/he starts looking right away.

Yet they cannot find anything. UE rate records that person as unemployed under U3.

Now, it's early 2011. Said person stops looking because they cannot find anything. That person would no longer be counted as U3, but now U6, a discouraged worker, and the U3 number goes down.

As we approach mid year 2011, the job market comes back a little bit, and our person now feels that his/her job prospects are brighter. So, they put out resumes and start going on interviews. Now, that person gets counted under U3.

In sum, the most important job stat to follow is new job creation rate. As more new jobs are created and workers fill those jobs, then they will create even more new jobs because they'll have increased purchasing power.

[Liberal_Stalwart71]

11. More people enter the workforce looking for jobs, but supply is less than demand for them.

Could also be that as boomers retire, a new cohort of young people graduating from school are entering.

[stevenleser]

20. IMHO, the best measurement for the short term trajectory is Gallup's job market index

http://www.gallup.com/poll/110134/Gallup-Daily-US-Job-Market.aspx

[JuniperLea]

21. People returning to the job market

That's a tenth of a percentage point change... WTF indeed? We need outrage for this?

[quaker bill]

22. 133,000 people

rejoined the workforce.