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AP: October Unemployment Spike Won’t Be So Bad

From Obama’s PR team at the Associated Press:

Why a spike in Oct. unemployment may not be so bad

By CHRISTOPHER S. RUGABER | November 6, 2013

WASHINGTON (AP) — The jobs report for October due out Friday may be bleak. It might even be scary. The unemployment rate could jump by the most in three years. Hiring may slow from an already weak pace.

Don’t panic.

The ugly figures will reflect the government’s partial shutdown, which coincided with 16 days in October. The trends for the job market will likely reverse themselves in coming months…

No one lost their job because of the government shutdown. So what does the shutdown have to do with the unemployment rate?

Economists warn that the unemployment rate could surge as high as 7.5 percent from 7.2 percent in September. That would be the steepest one-month rise since 2010.

The number of jobs added in October could slow to roughly 120,000 from the 148,000 added in September. That isn’t healthy. In the first nine months of this year, the average job gain was 180,000.

Which also isn’t healthy. Especially in a post-recession ‘recovery.’

The shutdown will be mostly to blame… But its effect on the data won’t be easy to tease out…

So the AP will have to explain why it is to blame for everything.

Consider how the jobs report is compiled: It’s derived from two separate surveys. Each survey will be affected differently by the shutdown.

One is a household survey. Government workers ask adults in a household whether they have a job. Those who don’t but are looking for one are counted as unemployed. That’s how the unemployment rate is calculated.

Again, not one federal worker lost their job during the shutdown.

The other is a payroll survey. The government asks mostly large companies and government agencies how many of their employees worked or received pay, typically during the second week of the month. This survey produces the number of jobs gained or lost…

Because furloughed federal employees received back pay for the time they didn’t work. So for the purposes of the payroll survey, they were employed…

So the shutdown didn’t affect the payroll survey, either. And everything in the article before this was a lie.

The household survey takes a different approach: It will count both the federal workers and the contractors as unemployed because they weren’t working during the survey period.

Again, this isn’t true. From the Bureau of Labor Statistics website: "Who is counted as unemployed? Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work."

None of the furloughed government workers ‘did not have a job.’ None of them were ‘looking for work.’ And none of them ‘were currently available for work,’ because they already had a job.

The shutdown furloughed about 450,000 federal employees in the second week of October. If the number of unemployed rises by that much in October’s jobs report, the unemployment rate could reach 7.5 percent…

Even though none of those furloughed workers were unemployed.

The shutdown’s effects will be largely unwound by November. But then the bounceback from October could distort November’s jobs data…

And by then the AP will have found something else to blame for the unemployment rate.

This article was posted by Steve on Thursday, November 7th, 2013. Comments are currently closed.

One Response to “AP: October Unemployment Spike Won’t Be So Bad”

  1. BannedbytheTaliban says:

    My prediction, which is based on as much ‘fact’ as the AP story, which is none, unemployment will fall to 7.1% or 7.0% because another 500k-1m people will have quit looking. Same as last month, and the month before that, and the month before that, and the month before that…..

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