MAKING SENSE -- November 2, 2012 at 12:02 PM ET
Jobs Up, U-7 Down, Jack Welch Silent (Thus Far)
A job seeker reviews listings in the Job Finder at the Rigzone Oil & Gas Career Fair in San Antonio, Texas. Photo by Eddie Seal/Bloomberg via Getty Images.
At the risk of incurring Jack Welch's wrath, I am obliged to report that this morning's unemployment numbers for October are unambiguously and decidedly positive: 171,000 new jobs added (according to the survey of employers); and 170,000 more Americans working (according to the survey of American households). Even the last two months of job creation were revised upwards, by a substantial 84,000.
The official government headline unemployment number -- "U-3" -- rose to 7.9 percent from 7.8. But that's only because the civilian labor force swelled by nearly 600,000. Since the civilian population rose by just 200,000, that implies that 400,000 Americans went back to looking for work and thus were counted in the workforce where previously they had not been.
Indeed, when you look at the government's most inclusive measure of unemployment -- "U-6" -- it dropped instead of rising, to 14.6 percent. So did our own even more inclusive number -- "U-7" -- which sank to 16.69 percent from last month's 16.87, the biggest drop since March. (Read my explanation of "U7" here.)
On the sober side, U-7 had hit a low of 16.55 percent back in March: 26.6 million people who told interviewers that they wanted a job but couldn't find one or were working part-time but wanted full-time work. Today's total is higher: just above 27 million (27,070,000). On the up side, however, the number of part-timers looking for full-time work is actually down this month by several hundred thousand, after rising by more than half-a-million a month ago.
And that brings us back to Jack Welch, the bantamweight ex-CEO of GE who blasted last month's unemployment data in a pugnacious tweet that was re-tweeted 5,248 times:
Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers— Jack Welch (@jack_welch) October 5, 2012
He then followed up on the passionately partisan Wall Street Journal op-ed page with an essay that explained why he found last month's report "downright implausible."
Now to give Welch his due, he is, without question, an acknowledged master of unemployment. When he left his job, he wangled what Forbes magazine called "by far the richest" severance package up to that point, or, so far as I can tell, ever. His severance totaled $417 million -- for leaving the company, mind you -- and included an "$80,000-per-month Manhattan apartment owned by the company, court-side seats to the New York Knicks and U.S. Open, seating at Wimbledon, box seats at Red Sox and Yankees baseball games, country club fees, security services and restaurant bills." Writing as a Bostonian, I can imagine that the value of the Red Sox tickets have declined. But other than that, Welch can fairly be described, I think, as having made out like a bandit.
Envy aside, I have some sympathy for Welch and the heat he took for his skeptical jobs tweet. Though he obviously didn't do enough homework to understand that the unemployment drop last month was due to the addition of so many part-time jobs, we did and we both reported it here and tweeted accordingly:
U-7 post explains: most of Sept 'job gains' were part-timers looking 4 full-time. Worked 1 hr last wk? Ur 'employed'to.pbs.org/PEnWRM— Paul Solman (@paulsolman) October 5, 2012
That enraged a certain @Yayyess, who tweeted back: "You can be as smugly arch as you like. My daughter is grateful she was offered P/T work last week."
And then: "That 1-hour crack was callous hubris. Did a measurable number of people get hired to work 1 hr?"
Ah well. I hope @Yayyess and others will find this month's post less callous. As to Jack Welch's new-found sympathy last month for America's jobless, however, it seems increasingly suspect and politically motivated, despite his protestations that neither he nor his wife were affiliated with the Romney campaign. Welch has in fact been tweeting up Romney all month on Twitter @jack_welch. As to this morning's unemployment numbers, he is, as of 10:25 a.m., noticeably silent.
We at Making Sen$e are working on a story to explain where the monthly unemployment numbers come from. To do so, we are looking for interviewees who have worked on the Current Population Survey (CPS; household survey) and/or the Current Employment Statistics survey (CES; establishment survey). Are you a former surveyor? Do you know one? If so, we want to hear from you! Please email us at firstname.lastname@example.org. Be sure to include your contact information. Very much obliged.
As usual, look for a second post early this afternoon. But please don't blame us if events or technology make that impossible. Meanwhile, let it be known that this entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.