US Unemployment Now 9.9%

The first positive, if dubious, print on employment in 2½ years came in from the Bureau of Labor Statistics (BLS) this morning. The highlights…

• 290,000 jobs added last month -- 231,000 of them in the private sector
• U-3 unemployment rose from 9.7% to 9.9%
• The U-6 figure, including the underemployed, rose from 16.9% to 17.1%
• The average workweek grew from 34.0 hours to 34.1

So why the rise in the unemployment rate?

The Labor Department games that number to exclude “discouraged workers” who’ve given up looking for work. Even U-6 excludes discouraged workers who gave up more than a year ago. As some of those people regain confidence and begin looking for work again, the labor pool gets deeper.

Oh, irony… the quants’ statistical sleight of hand is coming back to bite them, yet again.

Still, there are a number of positive take-aways…

• Census hiring accounts for only one in five of the new jobs added last month
• Even accounting for the Census, we’ve added substantially more jobs than the 100,000 needed just to keep pace with population growth. That hasn’t happened since November 2007

Of course, that’s assuming the numbers haven’t been gamed in other ways. Heh. We’ll find out next month when the revision gets filed away in some dusty backroom of 2 Massachusetts Ave. NE in Washington. Agora Financial