Is Jack Welch right in his claim the 7.8% #unemployment numbers released on October 5 by the Bureau of Labor Statistics are suspect? The numbers show there are 133,500,000 nonfarm workers employed as of September 2012. There are actually two surveys performed, one is called the Household Survey which is also reported as the Adjusted Household Survey ( smoothed for population control revisions) and the second survey is called the Payroll Survey. Over the last 12 years, the percent of workers unemployed is still near its highest level at 40%, down from 45% but well above the 10% number in the 1990 recession.
The most telling number and what Jack Welch, ex-CEO of General Electric, can’t reconcile with the 7.8% number is the labor force participation rate at 63.5% which is at a 12 year low, down from a high of 67% in 1999, and a steep drop from the 2008 labor participation rate of 66%.
The employment to population ratio is a 12 year low of 59%, down from a 1999 high of 65%, and not all employment sectors have responded equally to the recent economic cycle, with construction, information and government jobs negative over the last 2 years.
The largest decline was a 470,000 job loss in the government sector since February 2010. The largest employment gains were 1,414,000 in professional and business services and 1,015,000 in health care, followed by 746,000 in hospitality over the last 2 years. Not all races have responded equally since the 2008 recession with african american unemployment at 13.4% and 16 to 24 year old unemployment at 15.5% as of September 2012. There is also an 8 year high of people not in the labor force at 2,500,000, called marginally attached, and a 12 year high of involuntary part time employment of 8,000,000 workers, up from a 1999 low of 3,000,000 workers.
Click this link for the full explanation and PowerPoint presentation by the Bureau of Labor Statistics: BLS employment explanation.
Sources: Department of Commerce, Census Bureau, Thomas Nardone, Associate Commissioner for Employment and Unemployment Statistics at the Bureau of Labor Statistics.
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