Friday, October 06, 2006

Terrible Employment Numbers for September

I can't believe what I just read. For the month of September employers only added 51,000 new jobs. 51,000! By my estimation that is 150,000 too low, just to keep in pace with population growth.

Check this: Lets say we have 300,000,000 folks in the country. Then figure we have a population growth rate of 1.5% annually. That means we create approximately 4,500,000 new residents annually. Now figure that some of that number constitute adult new residents- either new citizens or aliens. Also, figure that every month a certain number of current residents, actual citizens or aliens, turn 18 and are of independent working age- employable. As a rule of thumb, you figure that approximately 50% to 65% of the annual growth rate in population is of employment age. So, to round things off, lets say we need to generate 200,000 new jobs a month in order to just keep up with our population growth and aging population. (4,500,000 / 12 months=375,000 new resident a month) (375,000*50%=187,500 new jobs needed to be created per month) Obviously, this is a rough estimate, but is a fairly conservative look at the whole picture.

Now here is the kicker! In September employers created 51,000 new jobs, well below expectations, but at the same time, the unemployment rate actually went down 0.1 percent. How does that make any sense. How can you miss the mark by such a far margin in employment growth, yet still see the unemployment rate go down at the same time.

I'll tell ya. After about 6 months an unemployed person is no longer counted in the unemployment numbers. So, now we see a large portion of the unemployed population no longer being counted. And this number is increasing.

The economy is not in good shape.


Anonymous Anonymous said...

This is a frightening post!

10:17 AM  

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