U.S. Jobless Rate Falls to 9% in January; Payrolls Rise 36,000 – Bloomberg Headline
There are lies, damn lies, and then there’s Bloomberg.
The headline from today’s post is actually taken word for word from bloomberg.com. It sure gives you a warm and fuzzy feeling to see that US unemployment is falling and that things are picking up, doesn’t it? As a matter of fact, here’s how Bloomberg *reports* this great news:
Stock futures and the dollar climbed while Treasuries slid as the drop in unemployment pointed to a labor market that’s on the mend following the loss of almost 9 million jobs during the recession.
The labour market is on the mend and the stock market is reacting favourably to this wonderful news. That’s what we’re being told.
Now let’s check in at Zero Hedge and see if they’ve uncovered something maybe Bloomberg missed:
Probably the last chart to bury any doubt about just how truly horrible today’s employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12.8% if they were in the labor force (and, as indicated, looking for a job). Nothing else needs to be said.
Hmmmm. That doesn’t sound great. Probably an anomaly.
What else ya got, Zero Hedge?
And another curiously divergent dynamic: looking simply at the Seasonally Adjusted underemployment rate (U-6), which came at 16.1%, or the lowest since April 2009, and one might be excused for assuming that there is a silver lining, somewhere. That is, of course, until taking a look at the sister, NSA series. At 17.3%, this was the highest number since March 2010, and higher than just 3 months in the history of this series.
That’s not great either. Another fluke? What else ya got?
At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9% (labor force declined from 153,690 to 153,186). Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year! As for the numerator in the fraction, the number of unemployed, it has plunged from 15 million to 13.9 million in two months! The only reason for this is due to the increasing disenchantment of those who completely fall off the BLS rolls and no longer even try to look for a job. Lastly, we won’t even show what the labor force is as a percentage of total population. It is a vertical plunge.
Yikes. So the unemployment rate went down because the labour force participation plummeted and not because 36,000 jobs were created, as Bloomberg would have you believe from their headline? And the number of unemployed fell because people fell off the rolls and stopped looking for work? That doesn’t sound so great after all.
Now, does that really sound like a labour market that’s “on the mend?”
The Bloomingidiotberg pump-monkey’s understand that the average Joe only reads a headline and nothing else and will come away from today’s news feeling as if things might have turned the corner. But they obvious haven’t. And Bloomberg sucks and should be ashamed of the shoddy reporting they put out each and every day.