Unemployment Rate Dives As People Drop Out Of The Labor Force And Life

I strongly question the accuracy of the BLS assertion that 0.6% is the high end of their error rate.

Also, note the rise this month to 0.6% is up from 0.3% a few months ago. The trend in the error rate has been rising.

Job Revisions

  • The change in total nonfarm payroll employment for November was revised down by 72,000, from +336,000 to +264,000
  • The change for December was revised down by 87,000, from -140,000 to -227,000. 
  • With these revisions, employment in November and December combined was 159,000 lower than previously reported.

Part-Time Jobs

Employment Reporting Silliness

These numbers never add up correctly. I list them as reported.

Unemployment Rate – Seasonally Adjusted 

Unemployment Rate Seasonally Adjusted 2021-01

Nonfarm Payrolls

Nonfarm Payrolls 2021-01

The above chart puts a much needed perspective on the recovery.

  • Jobs are up 12,470,000 from the lows.
  • Jobs are still 9,892,000 from the pre-covid highs

Hours and Wages

Average weekly hours of all private employees rose by 0.3 hours to 35.0 hours. Average weekly hours of all private service-providing employees rose by 0.2 hours to 33.9 hours. Average weekly hours of manufacturers rose by 0.3 hours to 40.4 hours.

Those increases are artifacts of declining labor force.

Average Hourly Earnings of All Nonfarm Workers rose $0.06 to $29.90.

Year-over-year, wages rose from $28.43 to $29.96. That's a gain of 5.4%.

The month-over-month and year-over-year gains are very distorted because more higher-paid workers kept their jobs than lower-paid employees.

Average hourly earnings of Production and Supervisory Workers rose $0.03 to $25.18.

Year-over-year, wages rose from $23.88 to $25.18. That's a gain of 5.4%.

Again, these numbers are hugely distorted as more lower wage workers lost their jobs than higher ones.

For a discussion of income distribution, please see What’s “Really” Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January 2014, I dropped the Birth/Death Model charts from this report.

For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.

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