Les Russ, writing on the Watching the Watchers web site, wants to know how the business media can write so positively about the recent unemployment statistics from the Bureau of Labor Statistics when they show a decline in the civilian labor force and an increase in those not in the labor force.
In other words, there’s an increase in people who left their jobs and aren’t looking for new jobs and the unemployed who quit looking for a job because they couldn’t find one.
Russ wrote, “So almost 400,000 additional people moved to the category of ‘not in the labor force,’ while almost 200,000 left the category of in the Civilian Labor Force. Those two numbers alone would indicate that the reported ‘drop’ in unemployment % (from 4.6 to 4.6) is likely to be misleading. Unemployment % is calculated as number of unemployed divided by number in the labor force. Absent the 374,000 who left the labor force, the denominator of the unemployment % calculation would have been larger.”
But that’s not the story that was written, Russ noted. He wrote, “The rather odd reporting continues in the [New York] Times, which pairs the U.S. economic story with one on Europe, headlined ‘Jobs Go Begging in Europe.” This is accompanied by a chart which is captioned ‘Even in Europe, Skilled Labor is Hard to Find’ but the chart of the % of European companies estimating that labor availability is limiting their production does not really show any such increase in labor scarcity. It shows the % of companies reporting labor shortages to be roughly the same as in the beginning of 2000 and the end of 2001. Only when compared to 2002-2005 is there an increase in labor scarcity, a fact explained by the drop in labor scarcity from 2002-2005.
“The statement of the BLS Deputy Commissioner, which is issued at the same time as the Feb stats, also contributes to the ‘good news’ spin. It says:
“‘Payroll employment was up by 97,000 over the month, following gains of 226,000 in December and 146,000 in January, as revised.’ So we’ve got a ‘new jobs’ 3-month trend line of 226,000 dropping to 146,000 dropping to 97,000. Yet the NYT says ‘More finding work’ and ‘Job Growth Remained Healthy.’
“Unless I’m really missing something here, the mainstream business press really needs to explain.”
Read more here.
