For the first time in four months the establishment survey was accompanied by a healthy +170,000 surge in the household survey.
Let's dig deeper.
The economy added a whopping 446,000 part-time jobs. Thus, the economy shed 276,000 full-time jobs. Those part-time jobs were supposedly "on purpose".
It's fair to point out the volatile nature of part-time statistics, but the 446,000 increase is unusually large.
One possible explanation for the surge in voluntary part-time employment is retirees needing additional income. However, that theory is not consistent with a labor force shedding 130,000 workers.
Part-time employment for "economic reasons" rose by 15,000.
Those not in the labor force rose by 296,000 and the labor force itself fell by 130,000. Those factors, coupled with the massive rise in part-time employment explains the .2 drop in the unemployment rate.
Long-term unemployment (27 weeks or more) rose by 89,000, the first increase since October.
This is a decent report, but it is nowhere near as good as it looks at first glance, with obvious questions about part-time employment and duration of unemployment.
February BLS Jobs Report at a Glance
Payrolls +236,000 - Establishment Survey
US Employment +170,000 - Household Survey
US Unemployment -300,000 - Household Survey
Involuntary Part-Time Work +15,000 - Household Survey
Voluntary Part-Time Work +446,000 - Household Survey
Baseline Unemployment Rate -.02 at 77% - Household Survey
U-6 unemployment -.01 to 14.3% - Household Survey
The Civilian Labor Force -130,000 - Household Survey
Not in Labor Force +296,000 - Household Survey
Participation Rate -.01 to 63.5 - Household Survey
Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.
Quick Notes About the Unemployment Rate
In the last year, those "not" in the labor force rose by 1,693,000
Over the course of the last year, the number of people employed rose by 1,473,000
In the last year the number of unemployed fell from 12,806,000 to 12,032,000 (a drop of 774,000)
Long-Term unemployment (27 weeks and over) rose to 4,797,000 from last month's total of was 4,708,000, a net rise of 89,000
Percentage of long-term unemployment hopped up to 40.2% from last month's 38.1%. Once someone loses a job it is still very difficult to find another.
Total nonfarm payroll employment increased by 236,000 in February, and the unemployment rate edged down to 7.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, construction, and health care.
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Unemployment Rate - Seasonally Adjusted
Average weekly hours rose .1 to at 34.5 hours. A year ago average hours were 34.6 hours. Average hourly earnings rose .05 to $23.82.
Real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly. For 2013, one needs to factor in the increase in payroll taxes for Social Security.
The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.
The Birth-Death numbers are not seasonally adjusted, while the reported headline number is. In the black box the BLS combines the two, coming up with a total.
The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.
Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.
Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.
Birth Death Model Adjustments For 2012
Birth Death Model Adjustments For 2013
Once again: Do NOT subtract the Birth-Death number from the reported headline number. That approach is statistically invalid.
In general, analysts attribute much more to birth-death numbers than they should. Except at economic turns, BLS Birth/Death errors are reasonably small.
People go back to school hoping it will improve their chances of getting a job
People stay in school longer because they cannot find a job
Were it not for people dropping out of the labor force, the unemployment rate would be well over 10%.
Part Time Status (in Thousands)
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There are 7,988,000 workers who are working part-time but want full-time work. This is a volatile series.
Table 15 BLS Alternate Measures of Unemployment
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Table A-15 is where one can find a better approximation of what the unemployment rate really is.
Notice I said "better" approximation not to be confused with "good" approximation.
The official unemployment rate is 7.7%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.
U-6 is much higher at 14.3%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Duration of Unemployment
Long-term unemployment remains in a disaster zone with 38% of the unemployed in the 27 weeks or longer category.
Grossly Distorted Statistics
Given the complete distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers.
Digging under the surface, much of the drop in the unemployment rate over the past two years is nothing but a statistical mirage. Things are much worse than the reported numbers indicate.