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Jobless rate on the rise
Job growth mixed as workforce shrinks
LR July2015 SA Rate Chart file

 What’s the difference between not seasonally adjusted and seasonally adjusted numbers?

Seasonally adjusted numbers have been revised to exclude yearly seasonal components. Not seasonally adjusted numbers include these seasonal components, according to the Kansas Department of Labor.

The KDL publishes the not seasonally adjusted labor force and nonfarm employment data. We also publish the seasonally adjusted and not seasonally adjusted unemployment rate.

Seasonal adjustment is a statistical technique which eliminates the influences of weather, holidays, the opening and closing of schools and other recurring seasonal events from an economic time series. This permits easier observation and analysis of cyclical, trend and other non-seasonal movements in the data. By eliminating seasonal fluctuations, the series becomes smoother and it is easier to compare data from month to month.

When comparing not seasonally adjusted data year-to-year, most of the recurring seasonal events are accounted for in the comparison. For example, when comparing July 2009 and July 2010, both months reflect the closing of school years. 

Therefore, the difference in employment over the year is due to reasons other than recurring events. The difference in the employment level would be due to events which are specific to that year, such as weather, strikes or some other factors. Because of the mild winter during the early part of 2006, there were reports of increased construction activities causing the construction industry employment to increase earlier in the year than it has historically.

When comparing data month-to-month, it is important to consider seasonal variations which may account for large parts of monthly fluctuations. Month-to-month not seasonally adjusted changes are an indicator of actual changes in labor force and employment and allow users to understand the size of seasonal variations. 

Using year-to-year changes would perhaps be more useful in understanding changes in the data that reflect events which are non-recurring. Looking at year-to-year changes allows users to decipher changes that occurred due to an increase or decrease in economic activities or other events that do not reoccur on a regular basis.

 TOPEKA - State labor officials are pinning an ongoing upward unemployment trend in part on a dwindling labor pool, according to the jobless report released by the Kansas Department of Labor late last week. 

The state’s July seasonally adjusted unemployment rate was 4.6 percent, up from 4.5 percent in June and up from 4.4 percent in July 2014. Seasonally adjusted figures show Kansas gained 8,900 private sector jobs since last year, or 0.8 percent. Kansas nonfarm jobs increased by 5,600 jobs, a 0.4 percent increase since July 2014. 

Since last month, Kansas declined by 3,500 seasonally adjusted private sector jobs, or 0.3 percent. The state decreased by 4,300 seasonally adjusted total nonfarm jobs, or 0.3 percent since June.

“Although preliminary short-term month to month estimates of job growth have been mixed in 2015, the Kansas private sector established a 12-month growth rate of 1.3 percent through July,” said Tyler Tenbrink, senior labor economist. “Looking ahead, one indicator that could affect future employment growth will be if the recent trend of a decreasing labor force continues.”

Not seasonally adjusted figures show Kansas gained 14,900 private sector jobs since last year, or 1.3 percent. Kansas nonfarm jobs increased by 12,400 jobs, a 0.9 percent increase since July 2014. Since June, private sector jobs decreased by 2,600, or 0.2 percent. The state declined by 22,400 total nonfarm jobs over the month, or 1.6 percent. 

The not seasonally adjusted unemployment rate in July was 5.1 percent, up from 4.7 percent in June and unchanged from one year ago.

The Barton County non-seasonally adjusted rate was 4.9 percent, Barton County had a labor force of 15,389 of which 14,636 were employed and 753 were out of work.

In June, the Barton County workforce consisted of 15,502 with 14,805 employed for a jobless rate of 4.5. In July 2014, there was a labor force of 15,702 with 15,087 at work with at rate of 3.9.

Why the fluctuations?

The unemployment rate is derived from the total number of people unemployed (defined as in the labor force and looking for a job) divided by the number of people in the labor force. There are a few reasons the unemployment could change, said Labor Market Information Services Director, Deputy General Counsel Justin McFarland. 

If the number of unemployed persons increases, and the number in the labor force remain the same, the rate would increase. Similarly, if the number of unemployed persons stays the same, but the number of people in the labor force decreases, the rate would increase. 

“In the past few months, the main cause for the increase in the Kansas unemployment rate is a decrease in the labor force,” McFarland said. This could be a result of people choosing to retire, return to school, or to no longer looking for work.

On the county level, the only data available is not seasonally adjusted. Thus, the KDL looks at over-the-year comparisons to avoid seasonal distortions. Compared to July 2014, there are 313 fewer people in the labor force in Barton County. However, there are 29 more than in July 2013 and 121 more than in 2012.

Down the road

McFarland said officials are still parsing the uncertainty in the global economy and its possible impact on long-term trends? “I do think it is important to watch what the Federal Reserve does at its September meeting.”

Many economists have recently predicted an increase to interest rates at that gathering, McFarland said. The Fed has indicated that the health of the labor economy will be a key factor that influences its decision. 

Some other numbers

In August in Kansas , there were 11,553 initial claims for unemployment benefits in July 2015, up from 11,329 in June and down from 12,193 in July 2014. There were 67,149 continued claims in July, down from 81,504 the previous month and down from 73,127 in July 2014.

Data provided is preliminary and subject to monthly revisions and annual benchmarks by the Bureau of Labor Statistics. Information on procedures for producing Local Area Unemployment Statistics (LAUS) estimates is available on the BLS website here. Procedures for producing Current Employment Statistics (CES) estimates are available on the BLS website here.

The August 2015 Labor Report will be released on Friday, Sept. 18.