Sunday, August 30, 2009
Let me explain each column. The source of this data is the Current Population Survey from BLS. Data projected is italicized. The two bold numbers for unemployment rates are the projections from the OMB economic assumptions. My other assumptions, working left to right:
- Population -- estimated to grow on average at 0.8% per year over the next decade according to the Census. I just imposed that on this forecast.
- Labor force population rate (LFPR) -- in order to do this, you have to make an assumption about that rate. I looked at the rate coming out of the 2001 recession, which in fact continued to decline for a year and a half after the end in November 2001. It isn't going to rise rapidly here in my opinion, but I let it slowly rise through 2010. Note that if OMB assumed no change in LFPR or continuing decline, the story of my subject line is worse -- you would get net job loss. If you want to make a different forecast for LFPR, go ahead.
- Labor force = LFPR times Population.
- Unemployment rate. My projection had the two 4th quarter numbers given, the annual averages that were also in the MSR (9.3% for 2009, and 9.8% for 2010). The path was just smoothed to make the averages and endpoints work.
- Unemployed = Labor force times unemployment rate.
- Employed = Labor force minus unemployed
- Emp/pop = Employed/Population, the ratio of the over 16 population that is working, or the employment ratio.
CBO has its own projections, and when I try to run those into the spreadsheet and when I run those in I have to assume something about 4th quarter unemployment (OMB gives you that number, CBO does not.) I do have their estimated average 2010 unemployment rate of 10.2%. I make that to give us a decline of employment over the first two years of the Obama administration in the range of 750-800 thousand workers, versus 152 thousand. Hennessey notes that this new CBO figure is down 2.3 million workers from estimates last March. But the range of difference in terms of jobs is much smaller than that, probably 600,000 or so our of 145,000,000.
Feel free to whip, chop or puree your own jobs report with this spreadsheet.
UPDATE: Thanks to a reader via Twitter, I found a typo in my population line for 2009:II, which is the worst place to have it because that's what drives the projections. I've updated the file and re-cast the image. It makes matters worse: The size of the decline in jobs between the fourth quarters of 2008 and 2010 is now 1.96 million rather than the earlier figure. This makes sense given my earlier, higher population figures.