Spinning the Jobs Created Numbers

[InTheLight]

The word out of Wall Street yesterday was that the latest jobs report gave hope that the US will not enter a double dip recession.

The report stated that 103,000 jobs were created in September more than twice as many as economists had expected.

Except....

The total includes 45,000 Verizon workers who were rehired after going on strike and these were counted as job gains.

So really, there were 58,000 jobs created.


Except...

20,000 of these were temporary help jobs.

Which means there were actually only 38,000 full time permanent jobs added. If you only scan the headlines you see:

103,000 Jobs Added, More Than Twice the Expected Number!

 

[Ruiz]

The word out of Wall Street yesterday was that the latest jobs report gave hope that the US will not enter a double dip recession.

The report stated that 103,000 jobs were created in September more than twice as many as economists had expected.

Except....

The total includes 45,000 Verizon workers who were rehired after going on strike and these were counted as job gains.

So really, there were 58,000 jobs created.


Except...

20,000 of these were temporary help jobs.

Which means there were actually only 38,000 full time permanent jobs added. If you only scan the headlines you see:

103,000 Jobs Added, More Than Twice the Expected Number!

The problem with your statistics is that they are not helpful.

When the Verizon employees went on strike, these numbers were reported as people who were without a job. In other words, in a balance sheet the statistics hurt the administration at the beginning of the strike (and few Republicans noted this was due to a strike back then that inflated the unemployment numbers).

Temporary jobs are a part of the numbers and has always been a part of the numbers. I do not see that there is a point. If the person loses that temp job, then they will go back onto the unemployment roles.

Now the standard problem that these numbers are only a partial reflection of the true unemployment rate is accurate. However, I see these partial issues that some are writing about as merely rabbit trails.

 

[mandym]

The problem with your statistics is that they are not helpful.

They are very helpful to gain an accurate perspective.

 

[Ruiz]

They are very helpful to gain an accurate perspective.

THe Verizon numbers are not helpful at all because they were removed form the payroll count when they went on strike.

Temporary employment is in alignment with averages at this time of the year, thus not news.

Is the economy bad? Yes! I think it is horrible. However, mentioning these things and saying it is "Spinning the jobs created" is not accurate. There is no spinning going on, this is how records are kept.

 

[Don]

THe Verizon numbers are not helpful at all because they were removed form the payroll count when they went on strike.

Temporary employment is in alignment with averages at this time of the year, thus not news.

Is the economy bad? Yes! I think it is horrible. However, mentioning these things and saying it is "Spinning the jobs created" is not accurate. There is no spinning going on, this is how records are kept.

Ruiz, the context is "jobs created." You are correct in that the Verizon jobs should have ben counted as loss; the technicality within the context is that those positions were merely empty, not "recreated." They should not be counted as "new" (added) jobs.

In the black-and-white analysis, they count against the employed/unemployed balance sheet; but have no bearing on number of jobs available, which is how this was spun.

 

[Ruiz]

Ruiz, the context is "jobs created." You are correct in that the Verizon jobs should have ben counted as loss; the technicality within the context is that those positions were merely empty, not "recreated." They should not be counted as "new" (added) jobs.

In the black-and-white analysis, they count against the employed/unemployed balance sheet; but have no bearing on number of jobs available, which is how this was spun.

Don,

Yet, the Verizon numbers were taken out and then put back in. If you are going to complain about the numbers now, you should have complained about the numbers back when they added to our unemployment rates.

Jobs created is always defined as the number of people taken off the unemployment roles for employment. Economists understand this. There is no "Spinning" going on, rather the spinning are by those who are making a big deal out of this.

 

[Don]

Verizon employees were laid off, and added to the unemployment numbers because they were suddenly...well, unemployed.

I may have missed it, but where is the evidence that Verizon completely wrote off those positions, thereby indicating the positions were no longer necessary?

And at what point did Verizon re-create the positions, then advertise to fill them--or did those workers simply go back to work in their previous positions?

So in the end, were those jobs created? Or are we simply doing some creative bookkeeping?

 

[Ruiz]

Verizon employees were laid off, and added to the unemployment numbers because they were suddenly...well, unemployed.

I may have missed it, but where is the evidence that Verizon completely wrote off those positions, thereby indicating the positions were no longer necessary?

And at what point did Verizon re-create the positions, then advertise to fill them--or did those workers simply go back to work in their previous positions?

So in the end, were those jobs created? Or are we simply doing some creative bookkeeping?

Don,

You are trying to play semantics on an economic issue that has a clear definition for every economist.

You are thinking a job created must be created when one never existed before. That is not the case, a job is created when people who didn't have a job now have a job. That is the difference.

Don, you can argue your point, but every economist understands the definition and it is a consistent definition. I don't expect you to understand the full economics involved, but I do expect you to accept what economists agree upon as the definition.

For the record, the definition is more complicate than I espoused, but you are wrong in your assessment. There is no "spinning" the numbers. This is the way the numbers have been generated for about 30 years now.

 

[Salty]

Don,

... a job is created when people who didn't have a job now have a job. That is the difference.

They did have a job - they just chose not to go to work.

If I am not mistaken, the unemployment rate is based on those who apply for unemployment payments.

IMHO, a person on strike should not be eligible for unemployment. (if the union wants to pay them - thats fine)
I would even say in a lockout - UI would be acceptable.

 

[Ruiz]

They did have a job - they just chose not to go to work.

If I am not mistaken, the unemployment rate is based on those who apply for unemployment payments.

IMHO, a person on strike should not be eligible for unemployment. (if the union wants to pay them - thats fine)
I would even say in a lockout - UI would be acceptable.

Salty,

Your argument is not really an argument.

The way we have counted unemployment for over 30 years is that those striking employees are counted as unemployed. This does not mean they are getting unemployment, but they are counted in the list. Once they were rehired, they are no longer unemployed.

You can argue all you want about how you think it should be calculated. I, for one, have my own strong opinions on the calculations. However, that is not the issue.

The issue brought up was that we were "spinning" the numbers. That is blatantly false. This is how we have always reported the numbers. From a pure economic perspective, this was done fairly and is accurate.

The "spinning" is occurring by others. The numbers are the numbers and we can't do anything about that.

If you want to fight for a change in the how we calculate unemployment, fine. However, It will probably take several years to implement. I have a long list of ways we can improve the process, but the way we derive the numbers are currently our baseline.

 

[Walguy]

I think the point of the OP was that when people see a figure for 'jobs created,' they instinctively think of jobs that did not exist before. Thus, seeing that 103,000 figure is likely to be misleading (intentionally so or not) to the average person reading it. So even though the numbers are technically accurate, a substantial percentage of those jobs are not what a lot of people would think they are if they just read the headline. As they say, 'perception is reality.' In this case, while the numbers are accurate, they create a perceived 'reality' that is not.

 

[SolaSaint]

Bottom line, does anyone really trust the US Gov't or the Americam media, and I'm speaking of both liberals and conservatives. We live in spinville and we need to lean on Christ and quit looking to the media to validate our opinions.

 

[righteousdude2]

The Positive Spin Is a Form of Mass Deception!

I can tell you, from first-hand experience, that there are more unemployed people today, then there was at this time five years ago.

The church I attend was once financially affluent! It is now struggling to pay its bills. And this is probably the case with many other one time affluent churches!

The number of unemployed in our church is unbelievable, and the fact that the majority of these folks can't find a job is scary.

Then you pick up the paper and see major restaurants closing down (Friendly's just filed for bankruptcy and is closing its doors) is one sign (of many) that things in this nation are just not going well.

Washington and Wall Street can spin the facts all they want. The facts don't lie. America is in serious trouble, as are other nations around this world.

I don't know when it will end, but I can tell you, that (IMHO) it is going to get much worse before it gets better. :tonofbricks:

 

[Ruiz]

The problem I think some are placing on these numbers is that you are taking a snapshot in time and placing too much behind that. If you use numbers in such a way you are not helping your cause.

The numbers are trends indicators but one month is merely one month. No one gives too much credence to one set of statistics. They begin to pay attention if they see this to be a trend one way or another. That is determined by a series of numbers for several months, or a series of numbers from other performance indicators.

All the economists I have been reading have not given these numbers the significance you are giving them. Why? Too many other indicators are negative and this is a short run numbers game.

A couple of months, we did get several good indicators, but I still taught that we were heading into a double dip (something that some leading economists disagreed). Yet, despite some trends towards the positive, no one had a rosy outlook because of the indicators.

So, my statement is quite simple, one month of numbers mean almost nothing alone. Few economists would take a single set of numbers (normally) and make a good or bad call about the economy.

 

[targus]

That there is spin concerning the jobs numbers is well taken.

I recall several articles about the jobs numbers when Verizon employees went on strike. The strike was offered as the explanation for the increase in unemployment claims at that time.

Now that they are back to work pointing that out as a large part of the current jobs numbers increase is not reported to the same degree.

 

[Ruiz]

That there is spin concerning the jobs numbers is well taken.

I recall several articles about the jobs numbers when Verizon employees went on strike. The strike was offered as the explanation for the increase in unemployment claims at that time.

Now that they are back to work pointing that out as a large part of the current jobs numbers increase is not reported to the same degree.

Targus,

I am not seeing that complaint. Most of the economists I am reading are saying that despite the jobs numbers, the other indicators show we are doing poorly.

While there have been some who have used numbers for political gain despite other economic indicators. Yet, the vast majority of the economics world understood those statistics had to be taken into perspective.