Negative job growth for 2009-2010, says OMB

posted at 2:10 pm on August 30, 2009 by King Banaian

I was thinking about Keith Hennessey’s post of Thursday on the implications of the OMB forecast on unemployment. The OMB forecast says that in the fourth quarter of 2010, the unemployment rate will be 9.7%. Inspired by Hennessey’s work, I decided to write a small spreadsheet. My goal: what does the forecast say about the number of jobs created? Here’s a screen cap of the spreadsheet:

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.

What we see here is that at the end of 2010, based on what I think are reasonable assumptions on LFPR and population, there are 152,000 fewer people employed than in the fourth quarter of 2008. The employment ratio stays below 60% through the period. Any effect of the stimulus now has to be “well yeah, we lost 152k jobs, but we’d’ve lost A LOT MORE if we hadn’t passed that stimulus package!” Hell is the place where you go to become an economist that has to sell that line.

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.

This post was promoted from GreenRoom to HotAir.com.
To see the comments on the original post, look here.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Negative job growth for 2009-2010

Oh. I was Hoping for a Change.

jgapinoy on August 30, 2009 at 2:12 PM

Tax Increases to the rescue

jjshaka on August 30, 2009 at 2:13 PM

Should “In God We Trust” be taken off of our money?
Anybody want to vote?
http://www.msnbc.msn.com/id/10103521/

VegasRick on August 30, 2009 at 2:15 PM

Obama smiles knowing his plan is almost complete.

HoustonRight on August 30, 2009 at 2:18 PM

I think LFPR stands for “labor force participation rate.” I’m still examining your post.

Kralizec on August 30, 2009 at 2:18 PM

The job loss we need is Barry’s !!

bayview on August 30, 2009 at 2:18 PM

4th quarter 2010 coincides with midterm elections.

a capella on August 30, 2009 at 2:22 PM

but look at all those PET PROJECTS of the Democrats that received lifetime funding….isn’t that worth a TRILLION dollars of our hard earned tax money????

SDarchitect on August 30, 2009 at 2:22 PM

The job loss we need is Barry’s !!

bayview on August 30, 2009 at 2:18 PM

To paraphrase Reagan: When your neighbor losses his job, It`s a recession. When you lose your job, it`s a depression. A recovery is when Obama loses his job.

ThePrez on August 30, 2009 at 2:22 PM

Oh. I was Hoping for a Change.

jgapinoy on August 30, 2009 at 2:12 PM

This is it, no complaining.

Wade on August 30, 2009 at 2:23 PM

Obama smiles knowing his plan is almost complete.

HoustonRight on August 30, 2009 at 2:18 PM

Yep … this is what he wants. Everything Obama has done has been will the goal of stunting the economy, not growing it, and he knows it.

darwin on August 30, 2009 at 2:23 PM

Hey did you see the President is taking two vacations, in two weeks?

Need to add a column that correlates the presentation of bad news with the beginning of a vacation. There has to be a near perfect correlation.

ted c on August 30, 2009 at 2:24 PM

More people worried about their health care. But on the bright side, more people dissatisfied with Congress.

Cindy Munford on August 30, 2009 at 2:25 PM

Crap and Tax will surely help Barry create more jobs won’t it?

Bwahahahahahahahahaha

Worst President Ever!

Ogabe on August 30, 2009 at 2:25 PM

And the sad reality is that before this recession, private sector job growth was static:

FOR the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.

NPP on August 30, 2009 at 2:25 PM

Change and Nope!

Weebork on August 30, 2009 at 2:27 PM

Labor force population rate (LFPR)

KBANAIAN, I think you want to edit. LFPR = labor force participation 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.

Your assumptions are generous here, so you are most likely understating negative job growth rather than overstating it. 152,000 jobs lost from fourth qtr 2008 to fourth qtr 2010 was NOT what the candidate promised. If you were an economist in the Obama administration you would be “voted off the island.”

Any effect of the stimulus now has to be “well yeah, we lost 152k jobs, but we’d’ve lost A LOT MORE if we hadn’t passed that stimulus package!” Hell is the place where you go to become an economist that has to sell that line.

See what I mean, KBANAIAN? You’re not a team player!

fellow economist sends

DrStock on August 30, 2009 at 2:28 PM

Predictions and projections are based on assumption.
Since I don’t trust Obama nor any of his followers, I will want to see the actual, hard, verifiable data after the fact before I draw any conclusions. And I will want to see how the data was collected and tabulated.

No trust, and I’ll verify it myself, thank you very much.

Skandia Recluse on August 30, 2009 at 2:33 PM

It’s like the Commie version of Brewster’s Millions.

Dr. ZhivBlago on August 30, 2009 at 2:34 PM

Isn’t ‘negative job growth’ just another way to say that unemployment will continue to rise?

thomasaur on August 30, 2009 at 2:41 PM

But the real number that matters is, how many jobs did Porkulus “create or save?

Blowhard Joe, can you answer that one?

UltimateBob on August 30, 2009 at 2:43 PM

HoustonRight on August 30, 2009 at 2:18 PM

Bingo. Another crisis in the making. Jobs for everyone in Obama’s “volunteer” Civil Defense Force.

Fletch54 on August 30, 2009 at 2:45 PM

Oh. I was Hoping for a Change.

jgapinoy on August 30, 2009 at 2:12 PM

I was just hoping for a job.

RagTag on August 30, 2009 at 2:48 PM

If the minimum wage is raised, more people would have more money to spend on more stuff, thus creating new jobs to create more things and those people will also be buying more stuff and they will create the need for more people to create more stuff.

Minimum wage to $50 per hour.

Bishop on August 30, 2009 at 2:48 PM

As Joe Biden said: “It’s that three letter word- JOBS.”

Obama: EPIC FAIL.

profitsbeard on August 30, 2009 at 2:49 PM

Lots of forced labor volunteers available to work on the autobahn shovel ready jobs.

phreshone on August 30, 2009 at 2:50 PM

It’s like the Commie version of Brewster’s Millions.

Dr. ZhivBlago on August 30, 2009 at 2:34 PM

The best synopsis of this administration yet.

However, I think the hacks in Congress put one over on The One — they just had their eye on the pork and snookered the poor fool.

On the other hand, neither of them should want a recovery this slow. Elections are coming…

IlikedAUH2O on August 30, 2009 at 2:51 PM

Barry’s shovel ready job… digging an economic hole to China…

phreshone on August 30, 2009 at 2:54 PM

Bishop, you magnificent ba$tard!

DrStock on August 30, 2009 at 2:54 PM

I would NOT rely too heavily on OMB numbers; remember they haven’t gotten anything right yet! You might say that they’re batting 1000!

GarandFan on August 30, 2009 at 2:55 PM

HOPE AND CHANGE OBAMA STYLE

bluegrass on August 30, 2009 at 2:55 PM

That’s okay. Charlie Rangle found that he has a bunch more ways and means! I am sure as Hell he’ll share. It’ll all balance someday.

clorensen on August 30, 2009 at 3:01 PM

Obama intends to wreck the private sector and replace it with a government one.

Why are so many still not seeing this?

Dave R. on August 30, 2009 at 3:02 PM

Does anyone know if benefits are being withheld due to a “back log” of applications? I have a family member who, while he just got a job, was unemployed for several months, and his paperwork is still being processed. I assume he will be back paid, but do you think this is being done to keep unemployment at a reasonable rate? I think they drop you from the statistic after 6 months, so I’m wondering that if they delay your processing for six months if they can immediately send you into the no longer seeking work category, and thus control the unemployment figure.

DFCtomm on August 30, 2009 at 3:02 PM

I dream of a a time of citizen legislators who left their trade to serve for 2-8 years to fight for the cause they believed in, only to return to private life to continue to contribute to the American economy.

Instead, we have these leaches who get elected and do everthing in their power to get re-elected, including selling their souls to the highest bidder in order to maintain control.

I now believe stronger than ever, that we should have term limits for Congress for 8 years for Reps, 12 years for Senators to force a citizen government that looks out for the best interests of all people.

tatersalad on August 30, 2009 at 3:03 PM

Fletch54 on August 30, 2009 at 2:45 PM

That’s ok. What chance to you think a security force made of those just looking for a check has against real patriots. God forbid it got that bad.

HoustonRight on August 30, 2009 at 3:03 PM

There is only one answer, more government regulation and taxes.

jukin on August 30, 2009 at 3:04 PM

This spreadsheet is racist!

rbj on August 30, 2009 at 3:06 PM

If the minimum wage is raised, more people would have more money to spend on more stuff, thus creating new jobs to create more things and those people will also be buying more stuff and they will create the need for more people to create more stuff.

Minimum wage to $50 per hour.

Bishop on August 30, 2009 at 2:48 PM

In Barry’s America, the maximum wage will be limited by Congress to $50.05 per hour. Social justice for all.

bayview on August 30, 2009 at 3:10 PM

Everyone needs to go a little “John Galt” and bring this thing even lower. Don’t buy anything except the basic necessities like internet connection, food, beer and cigars.

MB4 on August 30, 2009 at 3:10 PM

Plenty of jobs here for “activists.” Wonder who is paying them…and do you think the money might be coming from Porkulus?

Activist Jobs

PattyJ on August 30, 2009 at 3:36 PM

The Messiah’s Auntie doesn’t care about this economics crap – she’s on her 5th (Count ‘um) Felony Warrant for Deportation and living in a Boston Condo with Big Screen TV and $600 food stamps – she looks out of her high-rise bay windows each morning and sees the unwashed masses heading out to the mines so they can pay for all the Marxists in the WH and all the illegals here from Nigeria and Kenya where The Messiah was born……….you’ve got to love the Dems……………

Cinday Blackburn on August 30, 2009 at 3:49 PM

On the other hand, neither of them should want a recovery this slow. Elections are coming…

IlikedAUH2O on August 30, 2009 at 2:51 PM

Doesn’t matter. They, the libs, will still find someway to blame it all on Bush and the schumks that voted for them will eat it up. /I hope I’m wrong

docdave on August 30, 2009 at 4:03 PM

kbanaian et al

I’m getting tired of people getting the unemployment rate WRONG!!..the truer unemployment rate is currently standing at 16.3%..http://www.bls.gov/news.release/empsit.t12.htm

what the government measures when talking about unemployment is the number of people who LOOKED FOR WORK IN THE LAST 4 WEEKS..it doesn’t count the people who have become discouraged and stopped looking..

in the last report the official rate dropped from 9.5 to 9.4 yet the payrolls figure was -247,000. the rate dropped because they moved 267000 people from the unemployed to the marginally attached..

I love hot air ..but get it right!!!

galtg on August 30, 2009 at 4:03 PM

“Shut up, ” Obama explained.

PackerBronco on August 30, 2009 at 4:05 PM

Everyone needs to go a little “John Galt” and bring this thing even lower. Don’t buy anything except the basic necessities like internet connection, food, beer and cigars.

MB4 on August 30, 2009 at 3:10 PM

Small business (employers) have done this by NOT HIRING EMPLOYEES IN DROVES. I don’t want the Galt revolution; it’s just natural for producers who desire survival and more.

clorensen on August 30, 2009 at 4:08 PM

Not that I’m saying this out of some understanding of the numbers lol, but somehow I think we will not hit 10.0% unemployment.

People are just going to fall off of the u3 and into the u6. So even though real unemployment will continue to rise all through 2010, reported unemployment will probably start heading downward.

I have this feeling we are going to see the MSM reporting that we are in some sort of recovery the whole year while the job market continues to become more dismal.

jhffmn on August 30, 2009 at 4:22 PM

Cinday Blackburn on August 30, 2009 at 3:49 PM

Last I read, auntie was granted a stay of the deportation order pending a hearing on her newest application for some type of refugee status. We need to change our immigration laws to prevent this type of never-ending appeals, where illegals who’ve already had their day (or in auntie’s case — many, many days) in court get to keep coming up with new and different theories for why they should be allowed to stay.

I wonder who’s paying for auntie’s lawyers? She lives in public housing (at taxpayer expense), and was unemployed until very recently, when she was apparently given some type of part-time, make-work job for PR purposes.

AZCoyote on August 30, 2009 at 5:08 PM

I wonder who’s paying for auntie’s lawyers? She lives in public housing (at taxpayer expense), and was unemployed until very recently, when she was apparently given some type of part-time, make-work job for PR purposes.

AZCoyote on August 30, 2009 at 5:08 PM

I don’t know for sure, but I’ll bet the taxpayer is covering her legal fees. I doubt Obama is and his half brother living in Africa probably agrees with me.

DFCtomm on August 30, 2009 at 5:29 PM

I plugged those numbers into my bullshit-o… excuse me, predict-o-meter and it forecasts a rapid turnaround in late June to early July 2010, thereby allowing all ‘Rats up for re-election to use “Happy Days Are Here Again” as their campaign theme song.

GeneSmith on August 30, 2009 at 5:30 PM

This is the price America pays so that those that are responsible for the financial crisis don’t have to pay.

Had we let the investment houses fail, and let the Banks incrementally fail, their shareholders and executives would have paid the price. Banks should have been propped up just long enough so that there were always survivors to support the economy’s cash needs until failed banks were purchased and restructured.

But this ran counter to the interests of virtually every “financial expert” and politician so this is what we got, a long term crippled economy and generational slavery.

elfman on August 30, 2009 at 5:38 PM

We all need Palin checks its the only answer!

PrezHussein on August 30, 2009 at 5:56 PM

Negative job growth

Goody! Where can I get a “negative job”?

Dr. Charles G. Waugh on August 30, 2009 at 6:42 PM

So here is the disconnect I have, and have been having for a long time.

I was at Best Buy earlier today to buy a new TV. The place was packed. The TV I bought was the last one they had in stock. Literally 30 seconds before I got mine, I saw someone else grab the second last one. And there was a steady stream of people walking out of there with large ticket items.

I just don’t get it. On the one hand I read over and over about how people are not spending anymore, people are losing jobs left right and center, people are scared, etc. And then I go to Best Buy and they’re running out of TVs.

Just makes no sense.

angryed on August 30, 2009 at 7:12 PM

Any grim predictions for the economy makes the Barry very happy. It sounds incredible, but it is true.

mobydutch on August 30, 2009 at 7:26 PM

Why ain’t all these people working Uncle Jed.

bluegrass on August 30, 2009 at 7:36 PM

Well the Feds said real unemployment rate is 16%.

About 2 million Americans will run out of unemployment check by the end of September. Over 3 millions will be out by the end of the year. It going to be a bad Christmas and lot of retail business will be close the following year.

http://www.breitbart.com/article.php?id=CNG.4452bed82adf3124e5884678e236d7fb.361&show_article=1

http://globaleconomicanalysis.blogspot.com/2009/07/unemployment-claims-how-bad-are-real.html

jdun on August 30, 2009 at 8:06 PM

The Anarchist are getting ready for the G20 in Pittsburgh September 22 -25.

http://search.yahoo.com/search?p=g20+summit+pittsburgh+anarchist&ei=UTF-8&fr=moz2

Dr Evil on August 30, 2009 at 8:53 PM

Businesses started cutting back on expansion plans in Q4 2008 after the election results were in: they knew which way the wind was blowing. That forecast by small businesses, in particular, meant a static business pool or one with very slow growth rates.

So, employment stays the same.

Population size goes up, more people enter the work force than leave it, although we can expect to see a lot of Boomers hiking out soon… but even with that, there is a static workforce size and a net workforce size increase for a few years yet. Those born in ’48-49 will be hitting magic numbers very soon, and as life expectency goes up by 1 year for every 4, the population size continues to increase… while the labor force remains static.

Unemployment goes up if businesses aren’t adding jobs due to those new entrants seeking jobs and those finding that the fixed income of SSN is now *fixed*: not growing. So older workers start trying to get jobs in the market.

Net result: unemployment goes up, SSN becomes insolvent faster (more retirees added than new jobs), medicare costs go up (the elderly are the prime mover for that and that 1 per 4 does give longer lives, but also longer time to keep them on the rolls…

Now pump in a trillion dollars of funny money from the Treasury to cover all this lovely spending.

Welcome to Stagflation on steroids!

Courtesy the same numb-nuts party that got us the last bout of it.

Too bad the other party has a bunch of numb-nuts in office, too. This bodes ill for the Nation.

Both parties need ‘time in the wilderness’ really, really bad as they are both addicted to money, power, crony support, and generally making drunkes sailors look like bastions of fiscal rectitude.

ajacksonian on August 30, 2009 at 8:57 PM

The bamster back in town. There will be another side of this story tommorrow.

I’m back Uncle Jed and Granny

bluegrass on August 30, 2009 at 9:13 PM

Slight error in the spreadsheet: the 2009-Q2 population (the civilian non-institutionalized population in the BIS dataset) is 235,459,000. Plugging it back into the spreadsheet, with no other modifications, yields a job loss of 1,961,000 jobs and an unemployment increase of 4,585,000 between 2008-Q4 and 2010-Q4.

Own it, Obama.

steveegg on August 30, 2009 at 9:25 PM

Folks, remember and/or save these for next November, because they are magically going to change, come the midterms

ToddonCapeCod on August 30, 2009 at 9:34 PM

Any effect of the stimulus now has to be “well yeah, we lost 152k jobs, but we’d’ve lost A LOT MORE if we hadn’t passed that stimulus package!” Hell is the place where you go to become an economist that has to sell that line.

Hey, I like the new position of the goalposts, there is a lot you can do with this “saved” spin:

New barometer of success liberal style:

OBAMA: I SAVED THE ECONOMY!!!!!!!!

This new barometer of success by liberals is great since there is no measurable way to determine what “could have happened”.


In other news:

Ex-Detroit Lions head football coach Marinelli declared his 0-16 season a success stating “if they had not hired me,they would have been 0-16 several seasons in a row”.

I know Detroit fans are a lot happier now.

President Bush declares ” My tax cuts created and saved over 50 million jobs.”


See how this works,it’s great.
Bush can claim all kinds of success now that the goal posts have been virtually moved out of the dam# stadium.

President Bush declares ” I saved the world by taking Saddam out,thus preventing all out war in the middle east.”

That’s right,if Bush had not intervened to take out a madman that had started war after war and killed hundreds of thousands with WMD’s,all out war would have engulfed the mideast,spreading to all lands that have significant Muslim populations.

According to the liberals new determination of success and accomplishment, Bush can now claim just about anything because proving it could not have happened is impossible.

The UN declares success in dealing with the Rwandan and Darfur genocides:
“If we had not passed those resolutions and had so many “Save Darfur” bumber stickers made,millions more would have died.”

Now I understand why liberals love the UN so much.It is not the fact that they accomplish nothing,stop no genocide or wars,and their sanctions and condemnations accomplish nothing.
It’s what the UN “Prevents from happening” that is so impressive.

I know the people in Iran,the genocide victims in Darfur,Rwanda,and Iraq all feel so much better knowing what the UN “Prevented from happening.”

Neville Chamerlain declared his negotiations with Hitler a success according to documents found in the leaders archives.
“If I had not appeased Hitler when I did,many more millions would have died.”


And all this time I thought that appeasing Hitler only strengthened his resolve and brought on war.

We didn’t need Chruchill and FDR after all.

The OMB forecast says that in the fourth quarter of 2010, the unemployment rate will be 9.7%.

This is devastating.
The press is not going to be able to save Obama from this economic catastrophe.
Combined with his international failures such as Afghanistan, Obama will undoubtedly make Lyndon Johnson look like Lincoln.

Baxter Greene on August 30, 2009 at 10:05 PM

Update fromt the Greenroom post since I don’t know whether King can update a front-page one:

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.

steveegg on August 30, 2009 at 10:34 PM

Guess either King can, or Ed/AP did.

steveegg on August 30, 2009 at 11:15 PM

The Obama administration knows the unemployment rate will be high at election time. I wonder what strategy will be used to stymie the typical midterm drubbing. I mean besides the “it could have been worse” crud, which will be worn out by then.

Meremortal on August 31, 2009 at 12:33 AM

Along with term limits, I believe that Congress and the Senate can only be in session for 4 weeks every six months. The other time must be spent in their respective states WORKING at a real job. They would only get paid a government salary for 8 weeks.

red131 on August 31, 2009 at 8:54 AM

The job loss we need is Barry’s !!

bayview on August 30, 2009 at 2:18 PM

I often wonder what a person of his exceptional talent would take such a dead end job as the presidency. Add that to the fact it is only a temporary position. Why would anyone give up a permanent position in the senate for that?

kanda on August 31, 2009 at 9:08 AM

I believe that Congress and the Senate can only be in session for 4 weeks every six months. The other time must be spent in their respective states WORKING at a real job. They would only get paid a government salary for 8 weeks.

red131 on August 31, 2009 at 8:54 AM

Limiting when congress is so old fashioned and out of vogue. Back in the early days they were mostly farmers. They had to get back to tend the farms so the length of the sessions was shorter. To overcome that we now have career politicians. Some the the recently departed Ted Kennedy have never held a real job in their life that they earned.

Our founding fathers expected the congressional sessions to be limited in duration. Some of them even went so far as to discourage political parties. We see what they warned about now as our political system is nothing more that partisan bickering with the party in power ramming everything down the throat of the American people. It’s just sad.

kanda on August 31, 2009 at 9:14 AM

Limiting when Congress is in session may be old fashioned and out of vogue but then I guess there are some who think that about the Constitution. So what’s your solution to limiting the damage these people can do to us?

red131 on August 31, 2009 at 9:30 AM

Job numbers for August due out at 8:30 ET on Friday. Expected to be down another couple of hundred thousand, at least.

ChrisB on August 31, 2009 at 11:20 AM

Now that O is back from his muslum sabbatical he can enlighten the kool-aid drinkers on this new unemployment statistic.

Let me talk to them Uncle Jed, they likes me.

bluegrass on August 31, 2009 at 11:47 AM