American Sauce: Soaring unemployment for recent vets and other things missed
February 7th, 2011
01:45 PM ET
4 years ago

American Sauce: Soaring unemployment for recent vets and other things missed

Capitol Hill (CNN) - Let's get down to the main question: what the heck is going on with jobs?

Friday confused economists tweeted in question marks as the Labor Department reported both that the unemployment rate plummeted in January (from 9.4 percent to 9 percent) and that job creation barely has a pulse (just 36,000 jobs created, a figure that usually corresponds to an increase in unemployment).

In this week's American Sauce, we are not content to be confused. We look at exactly what's going on with jobs and what's generating these conflicting numbers.

Listen to the podcast here or keep reading for our list of "3 things others missed on jobs," which includes a troubling statistic about our veterans.

First, read the Labor Department jobs report here.

1. Afghan and Iraq War Vet Unemployment Skyrocketing – To cut to the chase here, the report shows that recent war veterans face nearly as much difficulty in finding work as high school dropouts. The unemployment rate for veterans of the Afghanistan and Iraq Wars (2001-present) soared to 15.2 percent in January. That's up nearly three points from the already high 12.6 percent of January 2010.

In comparison, the unemployment rate for Americans without a high school degree is not far off – 16.5 percent when not seasonally adjusted. (Figures for veterans were not seasonally adjusted.)

Veterans overall have a higher unemployment rate than the rest of the nation (9.9 percent in January, a slight increase from 9.6 percent last January). But recent war vets by far have the most difficulty finding a job.

In fact, the unemployment rate for veterans of Afghanistan and Iraq makes it one of the most struggling groups of adults in the country. Only high school drop outs and African Americans face similarly high unemployment rates as large groups.

What's happening? For now, no one can point to one primary cause. The statistics imply it is not war-related disabilities. As a population, persons with a disability have an unemployment rate of 13.6 percent, significantly lower than the rate for recent veterans.

Experts tell our CNN Pentagon unit that employers may be hesitant to hire veterans out of fear of perceived disabilities, problems with PTSD or other war-related mental issues. They also point out this is part of a sad long-term trend.

But no one can say definitively what is driving it.

2. Hispanics, African-Americans see improvements – This report indicates things are improving, to some degree, for the two ethic/racial with the highest unemployment rates.
Unemployment among blacks or African Americans inched down in January, from 15.8 percent in December to 15.7 percent now. But over the past year, those inches have added up. The unemployment rate for African Americans was 16.4 percent a year ago.

For Hispanics, the improvement is short-term change is more notable. Their unemployment rate slid from 13 percent in December to 11.9 percent in January. Hispanics also saw progress over the past year, but it was smaller than the monthly change. In January 2010, Hispanics had an unemployment rate of 12.5 percent, according to the Labor Department. Again, that is in comparison with 11.9 percent now.

3. Why the confusion? – Back to the top of this story, how could a single report show the unemployment rate dropped by whopping (in recent terms) 0.4 percentage points during the same month when the economy created almost no jobs?

The key is that the two statistics come from different surveys.

The unemployment rate is produced by a survey of 60,000 households, asking (among other things) if each person is employed, looking for work or no longer in the workforce. That survey produced the 9.0 percent unemployment rate figure.

The number of jobs created or lost comes from a different tool, a Labor Department survey of some 400,000 business establishments. That's called the "payroll survey". This looks at things like how many people showed up to work in a given week and how many employees were on a business' payroll. That survey concluded that just 36,000 jobs were created in January. Typically, economists believe if fewer than 150,000 jobs are created in a month, the unemployment rate will go up.

Thus, the conflict. A relatively large drop in the unemployment rate but a figure showing so few jobs were created that the unemployment rate should have gone up.

A spokesman for the Labor Department told me that they could not explain the difference, stressing this could be a short-term anomaly. He urged that everyone "wait until next month" to see what trends emerged.

Others, including a well-respected CNN Money colleague, believe the swirl of data indicate there are dynamics swirling underneath the surface of the economy that will soon be visible. They take this as a positive sign, as if the economy is trying to pull itself out of a mud hole and all we see are the bubbles and surface disturbance.

There is one logical explanation for part of the conflicting statistics here: the weather. The storms of January kept thousands, if not millions, of people away from work. It is possible that the payroll survey is underestimating the number of jobs because employers had much of their workforce at home during the week of the survey.

(Note to those pointing to the January population adjustment as a cause: Yes, this could have some affect on the numbers, but not to this extent. See Table C on page 7 of the report.)

–Follow Lisa Desjardins on Twitter: @LisaDCNN


Filed under: American Sauce • Uncategorized
soundoff (11 Responses)
  1. Tom

    Wait, didn't the GOP promise full employment if the rich got their tax cut?

    February 7, 2011 01:52 pm at 1:52 pm |
  2. Balmorhea

    There were 142 million Americans employed the day Obama took office and 139 million today. Total Debt has gone from $10.6 trillion before his inagual to $14.2 trillion today. Obama does not inspire any confidence among the business community and the time for blaming his predecessor passed long ago. His state of the union was a continued song to liberal activism and his freeze on spending was joke – cuts need to be made.

    February 7, 2011 01:56 pm at 1:56 pm |
  3. diridi

    war vet never work, they are just wanting to get free money from Government...if they want they can in k'mart....or McDonald's...etc., they are spoiled...cry..cry...cry...o.k, Free money is spoiling them...

    February 7, 2011 02:00 pm at 2:00 pm |
  4. Sgt Schultz

    Both parties still don't get it. Pelosi tried to stand-up for American jobs and got called a Marxist by the Right-Wing nuts. It's all about the domination of Big $ Lobbyists and the Chamber of Commerce that only care about their selfish interests. Nobody care about the millions of jobs that have been replaced in 3rd world sweatshops. Or if they don't do that...they simply import the foreign nationals and give them "temporary" work visas to replace our jobs.

    February 7, 2011 02:15 pm at 2:15 pm |
  5. rob

    "Others, including a well-respected CNN Money colleague, believe" speaking of this conflicting data as a positive sign,...."as if the economy is trying to pull itself out of a mud hole and all we see are the bubbles and surface disturbance."

    Yeah, we are all drowning all right. These are same people who think unemployment for African Americans going from 16.4% ALL THE WAY DOWN TO 15.7% IN THE LAST YEAR is a possitive thing.

    CNN you should be ashamed of yourselves to print jibberish like this, the ones responsible should be fired and forced to take unemployment at $500 a week. They will find out very quickly that its the private sector hires people and the Govt needs to creat the atmospher to let them grow and hire, even if that means the make a P R O F I T.

    February 7, 2011 02:24 pm at 2:24 pm |
  6. ReallY!!?

    Not to mention $3.20/gallon for gas and rising food prices. I remember in 2007 when this was happening under Bush, Pelosi, Obama and all the DEMS in Congress came out screaming where is the leadership and how outrageous and horrible was this was for the poor. All the media outlets in cohoots with the DEMS, did their bidding & had this plastered everday until Nov2008. Now we are presiding over the same economic situation only worse, b/c he has spent $3Trillion and the economy is no better, and not a peep fr the media outlets!!!

    Where is the leadership Dems demanded in 2007? Instead we get words of wisdom like "regulations is good, forget bottom line& just start hiring". Tell me would you invest your money into a business that will not make any money? Would you pay more for a house than it is worth just to stimulate the housing economy? I guess Obama expects us to do so and he and the govt will pay for all our bills.

    February 7, 2011 02:42 pm at 2:42 pm |
  7. gt

    its jobs.. jobs... jobs... if we dont turn this around soon ,obama will be gone ....

    February 7, 2011 02:47 pm at 2:47 pm |
  8. ReallY!!?

    If Bush came out and blamed the weather for the poor job markets what would CNN do with that excuse?
    If Palin came out and said "Business have to start making more "stuff"" (as Obama said today), what would the raging liberals say to that piece of "intellectual" statement.
    Let's see....
    "Palin once again shows a lack of understanding of how the economy works. Using vague terms like stuff and blaming the weather for the bad job numbers shows her inability to understand just how the US economy works. She lacks the substance and gravitas to explain to the American people just how to fix the economy"
    LOL hypocrites!!!

    Now substitute Obama for Palin and him for her....

    February 7, 2011 02:49 pm at 2:49 pm |
  9. Mr DemocratMan

    Mr. Obama and his party are trying to mislead the public by controlling the information we receive.

    February 7, 2011 02:50 pm at 2:50 pm |
  10. Anonymous

    How about letting them stay on our soil and NOT go fight unnecessary wars? They would have kept their jobs here, their family would not suffer, we would be saving billions for our treasury and maybe could have done some of the infrastructure prjects this country so desparately needs and would have added jobs.

    February 7, 2011 02:55 pm at 2:55 pm |
  11. Protect and Defend Freedom of Speech in the USA

    I'm sure the Obama administration will play games with these numbers to get re-elected. People that have given up looking for a job and massive early retirements are a big reason the rate is dropping. While this lowers the "unemployment rate" it is certainly not a positive.

    February 7, 2011 03:07 pm at 3:07 pm |