# Huge gaps cast doubt on Better Than Expected Jobs report

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Calculation of unemployment rate

The unemployment rate is calculated by dividing the number of unemployed by the civilian labor force.

Unemployment rate = 13.550 million / 160.838 million = 8.42%

Note that the number of topical jobs reported today (+1.4 million) has nothing to do with anything. This is the number of the establishment report.

The number of employees (+3,756 million) enters the calculation, but indirectly, as the denominator of the working population.

Population active vs emploi

Note that employment increased by 3.756 million, but the active population only increased by 968,000 people. The impact of this gap actually increases the unemployment rate, but only by a tiny amount.

It’s the numerator that counts. The numerator must match the continuing claims. This is not the case.

Continuing complaints

The BLS reference week is the week that contains the 13th of the month. It is the week of August 9 to 15.

Major gap

• Continuing claims for the week ending August 15 were 14,492 million according to the BLS.
• Yet the BLS also reports that the number of unemployed for this week was 13,550 million.

Minimum number

14.492 million is the extreme lower limit we should see for the number of unemployed.

Why?

State claims include only those eligible for state unemployment insurance.

Complaint number missing in the following

1. Concert workers
2. Self employed
3. Those who have not worked long enough to qualify for state benefits
4. Those who have maximized the number of weeks states allow

Primary PUA complaints

Assistance in the event of a pandemic

Primary PUA claims for the reference week were 13.57 million, an increase of 2.6 million.

PUA includes the 4 categories missing in the continuous complaints. But it also captures a number of part-time workers.

But at least some of that 13.57 million didn’t work out at all.

For the sake of argument, assume that only 3 million of these workers were not working at all.

Calculation of unemployment

Unemployment rate = (14.942 million + 3.0 million) / 160.838 Labor force = 11.16%

Other deviations

I discussed other variances in my employment report earlier today.

Part-time jobs

• Involuntary part-time work: -871,000 to 7,572,000
• Voluntary part-time work: +838,000 to 18,630,000
• Total part-time work: +991,000 to 24,973,000
• Total full-time work: +2,837,000 to 122,369,000

Part-time relationship silliness

• The net of voluntary and involuntary part-time work is -33,000.
• Total part-time work increased by 991,000

Don’t try to make sense of these numbers because they never add up. I list them as reported.

For more details, please see the much better than expected jobs report, but is it believable?

Methodology change

In addition to this mess, there is a change in BLS methodology that has artificially reduced the number of initial and continuing claims from yesterday.

For more information, please see Unemployment claims are improving but it’s a manipulative mirage.

Guess it’s possible that the complaints review is correct, but it still doesn’t account for all the workers in the mission etc. on Pandemic Assistance who are genuinely unemployed.

Conclusion – Garbage

My conclusion is that today’s unemployment rate numbers are garbage.

Mish