December Jobs Report Bad – Revisions, Adjustments Make It Even Worse

The Employment Situation Summary, often called the Jobs Report, was released this morning by the Department of Labor (DOL). The numbers are bad for December. However, revisions to the two preceding month’s data make it even worse.

The headline jobs number was a loss of 524,000 jobs during December. These data are from the “Establishment Survey”, officially called the Current Employment Statistics survey, which is conducted on 150,000 businesses and government agencies. Last month, the DOL reported that 533,000 jobs were lost. However, this month’s report also includes a downward revision for each of the last two months totaling an additional 154,000 jobs. So in reality, there are now 678,000 fewer jobs that were indicated by last month’s report. During 2008, nearly 2.6 million jobs were lost.

This is the worst, by far, than any year since 1975 when the currently available data set begins. As bad as these numbers sound, in reality they are even worse. As I pointed out in an earlier post, the country needed almost 1.9 million jobs just to keep abreast of the growing population. In fact, this growing population should create this number of jobs due to increased demand. So, in fact, the “job deficit” for this calendar year is nearly 4.5 million. This is more than a million worse even than the severe recession of the Reagan Presidency.

The Unemployment Rate reported this morning was 7.2%, up from a revised 6.8% last month. The initial report from last month was 6.7%, so this month’s reading is actually 0.5% worse than last month. These data are from the Household Survey, or Current Population Survey, which is conducted on 50,000 households each month.

Many have argued that this official unemployment rate is a deceptively small number as it does not count those who have given up looking for work. A number of alternative numbers have been proposed to reflect a more accurate picture of our employment situation. In an earlier post, I explained one such alternative value, which I called the Adjusted Unemployment Rate. This now stands at 9.4%, which is again the worst since 1982 during the Reagan recession.