Layman's Look At May Numbers

A week ago, I made some predictions regarding the end of May economic indicators published by the Bureau of Labor Statistics and the Social Security Administration. Let's take a look at what the reports state and what they possibly mean for the average citizen.

Looking through the BLS report, the words "relatively unchanged" and "little changed" are spattered throughout the summary page.

The U3 unemployment rate is reported at "essentially unchanged". That means it changed, but less than a tenth of a percent. So, the reported rate is "unchanged" (actually up 0.1%) and remains 7.6% (lousy). The reason for the word "unchanged" is because April's numbers were revised.

Long-term unemployed (those jobless for 27 weeks or more) was unchanged at 4.4 million. These individuals accounted for 37.3 percent of the unemployed.

Translation: things have not gotten better for anybody that has been unemployed over 6 months but has not yet been dropped from the workforce.

The Workforce Participation Rate (Labor Participation Rate, if you prefer a more Marxist sounding name) was reported at 63.4%, up 0.1%. There was a slight increase in the working population. The WPR is 0.4% lower today than a year ago. Some claim that the rise in U3 is due to a slight increase in the workforce. Others may take that a step further and claim optimism in that rise. That does not indicate an economic recovery. The increase in the workforce is probably directly proportionate to the number of college and high school students that graduated in early to mid-May.

The BLS also reported the U6 unemployment as unchanged from last month. That would mark the U6 unemployment rate dancing around 13.9%.

At then end of each BLS report the adjust the numbers from previous months. The trend over the past 4 years or so has been to reveal the numbers, upon review and recalculation, were worse than originally reported. May's report continues that trend.

Employment for March was revised from +138,000 to +142,000, and the change for April was revised from +165,000 to +149,000. With these revisions, employment gains in March and April combined were 12,000 less than previously reported.

So, even the slight "improvements" to the U3 in the past months were not accurate. Again, the BLS reports "Oops, we were off a little. But that's OK. Nobody cares about last month's report". 

The SSA has not yet released its monthly statistical snapshot. It's report for 2012 disability payouts/handouts is due out in July 2013. The current trend is a month by month increase in personnel running out of unemployment handouts (at 99 weeks) and applying for SSDI to replace them (for to "depression" due to a poor job market).