Here’s Why Summer Employment Numbers Are a Little Sketchy

Earlier this morning I mentioned that June’s rise in the unemployment rate was due to a big increase in the civilian labor force, mostly caused by people graduating from high school or college. If you’d like to see this in chart form, here it is:

Every year, starting in June and peaking in July, the labor force spikes upward. Then September rolls around, and lots of kids go back to college, thus taking themselves out of the labor force. This is basically meaningless, which is why for most purposes we always use the seasonally adjusted figures, shown by the dotted line. That helps, but some of the spike remains, as it did in June’s numbers this year. Here’s how this affects the unemployment rate:

Unemployment spikes in January, when temporary holiday workers go back home, and in July, when kids are temporarily on summer vacation. The seasonal adjustment smooths out most of this, but not all. That’s one reason among many not to get too agitated over a single month’s numbers, especially in summer.

NOTE: Like most people, I always use seasonally adjusted figures. If you see a chart, it’s seasonally adjusted unless I specifically say otherwise.

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WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

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