The headline September unemployment numbers were bad.
Payrolls dropped by 263,000 in September, exceeding the median forecast in Bloomberg’s survey, with losses extending from cash-strapped state and local governments to retailers to builders, today’s report showed. The jobless rate rose to 9.8 percent from 9.7 percent in August, while working hours matched a record low.
This is bad news across the board, and far worse than the numbers the markets expected yesterday. However, these reports dramatically understate just how bad the real numbers were.
For example, if you looked at the non-seasonally adjusted numbers, the labor force shrank by 1,280,000 in a single month! The participation rate in the workforce fell from 65.6% to 65.0%.
Even the seasonally-adjusted numbers show a drop of 785,000 amongst the ranks of the employed.
So how do they get away with saying the number of unemployed only rose by 263,000? They did it by increasing the number of people not in the labor force by 1,516,000 people. Remember, this adjustment is from just a single month.
It doesn't end there. The BLS has gone back and adjusted past jobs reports. What did they find? Why 824,000 jobs that were supposed to exist just vanished.
For national CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus two-tenths of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates a downward adjustment to March 2009 total nonfarm employment of 824,000 (0.6 percent).
But don't expect Washington to care. Unemployment isn't exactly on the top of their agenda. Ignore this at your peril.
On a related note, bankruptcies have now topped 1 million so far this year for the first time in this recession.