## Dean Baker Completely Unaware How BLS Calculates Unemployment Rate

Holy crap, how did Dean Baker from the Center for Economic and Policy Research get a job writing about economics?

The unemployment rate fell to 9.7 percent in May, primarily as a result of 411,000 temporary Census jobs.

Mr. Baker is apparently unaware of how we calculate the un2employment rate. Let’s help him out here.

First we take the number of people who have jobs. This is not the “non-farm payrolls” number, which increased by 431,000. It is the “Employed, 16 years and over” number which decreased 35,000 (from 139.455 million to 139.420 million). Mr. Baker seems to have those two numbers confused, so I thought I’d clarify.

Then we take the number of people who are looking for jobs but can’t find them. This is where we get the “unemployed” number, which decreased from 15.260 million to 14.973 million.

Then we add the employed number to the unemployed number and you get the Labor Force number. In order to calculate the unemployment rate, we divide the number of people unemployed from the labor force.

139,420,000 + 14,973,000 = 154,393,000 people in the labor force

14,973,000 / 154,393,000 = 9.7% Unemployment rate

Let’s try to prove Mr. Baker’s statement that the unemployment rate dropped to 9.7% “primarily” due to the 411,000 census jobs. We’ll subtract 411,000 from the “employed” number.

139,009,000 + 14,973,000 = 153,982,000 people in the labor force

14,973,000 / 153,982,000 = 9.7% Unemployment rate

We get the exact same unemployment rate with or without the census jobs. That is because unemployment rate dropped due to people leaving the labor force. And most of the people who left the labor force came from the “unemployed” category. Otherwise known as “discouraged workers”.

This is part of the reason that economic understanding is so dismal among the general public. An economic reporter should be able to get the simple facts right about a job report.

## Oil Spill Simulation Shows Super Crappy Independence Day

UPDATE: Check out Bill’s comments below. It seems that this visualization may be taking us for a ride.

Fascinating computer simulation shows the oil slick wrapping around Florida and basically taking a crap all over the eastern seaboard starting about July 4.

I don’t really care about blame on this issue. That being said, I pretty much blame BP.

More seriously, though, it seems to me (as a totally ignorant observer) that we’re quickly coming to a point where containment of what has already leaked out is just as important as stopping the leak. Is it totally impractical to assume that the US naval reserves might be able to take charge of the slick containment work? Is there any plan to do that?

I don’t know, I’m just asking. If you have anything resembling the answer, I’d love to hear it.

## What Happens to Unemployment Tomorrow?

Just thought I’d post this. I’ve always been a little fascinated by the number of people needed to pull off something as huge as a the census. And next month we should see the peak of the census employment burst. Observe:

This was done in about 20 minutes, so it might need some explanation.

Basically, I start with with the June before the census and mark that number (somewhat arbitrarily) as my base federal employment point. Then I checked the employment numbers moving forward from that point as a percentage of that number.

As you can see, if this census year follows the path of the last census year (which it seems to be doing so far) the May employment number coming out tomorrow should add around 300-350 thousand jobs due to the census alone.

How big is a 300-350 thousand job increase? Well, the increase in employment as a whole between March and April was about 250 thousand. So, if the recovery continues as it has been, we should see an increase of something along the lines of 500-600 thousand jobs tomorrow.

Take note, I’m doing really simple guesswork here. I’m pretty sure that geoff over at Innocent Bystanders will have more intelligent things to say on the matter tomorrow.