Tag: Unemployment

March Jobs Report Shows Labor Market Continues Its Slow March Forward

 

The recovering US job market continued to march forward in March.

Nonfarm payrolls rose by 215,000 vs. a monthly average of 223,000 the previous 12 months. Just keepin’ on, keepin’ on. The unemployment rate edged up to 5.0% but for positive reasons as labor force participation continues to rise. Overall, the labor force grew by nearly 400,000. As Capital Economics notes: “…the labor force has now increased by more than two million in the past five months alone. The participation rate has jumped from a low of 62.4% last September to a two-year high of 63.0% this March. This is a remarkable turnaround in terms of both its speed and magnitude.”

Two Charts: Job Automation in Action

 

“Job polarization” is a wonky term that simply means the US labor market is seeing a decline of middle-skill occupations and growth in high- and low-skill occupations. Jobs are moving toward the extremes of worker skill levels.

Both automation and offshoring seem to be the driving factors. Particularly at risk are jobs that mostly require routine or repetitive tasks. A new St. Louis Fed analysis breaks it down this way: “a) nonroutine cognitive occupations, which include management and professional occupations; b) nonroutine manual occupations, which include service occupations related to assisting or caring for others; c) routine cognitive, which include sales and office occupations; and d) routine manual, which include construction, transportation, production and repair occupations.”

Does Lower Labor Force Participation Mean the 5% US Unemployment Rate Is a Phony Number?

 

120915jobsThe current 5 percent unemployment rate is half its worst level of the Great Recession. But the jobless rate would be 10.1 percent if the labor force participation rate — which feeds into the unemployment rate — were back at pre-recession levels. So what is the “real” unemployment rate? The other day, I quoted a new Goldman Sachs study on the LFPR issue:

What about the 3.6pp decline in the labor force participation rate since 2007? While it’s true that the unemployment rate would be much higher if participation had remained stable, we now believe most of the decline since that time should be considered structural. By far the largest contribution to the decline in participation has been an increase in retirees—mostly a natural consequence of the aging of the workforce. Rising disability rates—a trend mostly driven by demographics—and a tendency for young people to remain in school have also played a role.The remaining cyclical component is a relatively modest share of the labor force, and broadly captured by the U6 unemployment rate, in our view.

And n0w the San Francisco Fed offers a similar perspective:

November Jobs Report: The “Coke Zero Economy” Continues

 

shutterstock_263448719_cokezeroThe November jobs report was hardly a home run, but it was a hard-hit double into the gap. IHS Global Insight summarizes:

  • For November, the Labor Department’s payroll jobs survey showed a strong increase of 211,000.
  • Just as upbeat, the employment gains for September and October were revised up from 137,000 to 145,000 and from 271,000 to 298,000, respectively.
  • The three-month average jobs gains were 218,000, compared with the June to August average rise of 207,000 and a year-to-date average of 210,000.
  • The unemployment rate held at 5.0%, as both employment (in the Household Survey) and the labor force increased 243,000 and 273,000, respectively.
  • The labor force participation rate rose a tick to 62.5%.
  • The jobs growth was broad-based, with all sectors (except manufacturing, information services and temporary help) showing improvement—construction and retail were notably strong.
  • Average hourly earnings rose 0.2% for a 12-month gain of 2.3%—lower than October’s 2.5%, but above the 2.1% average of June to August.

So the Coke Zero Economy — “If that’s all you have in the fridge, it’s fine, I guess. No, really, it’s fine. Thanks.” — continues.

There are some impressive bits, no doubt. As Capital Economics notes this morning, full-time employment has increased by 10.1 million since 2009, with part-time employment declining by 43,000. And the unemployment rate, now 5%, has been cut in half since the Great Recession peak. And note what Goldman Sachs has to say about the controversial role of declining labor force participation in that drop:

Time to Replace the Misery Index with an Anxiety Index?

 

110916jobs

The current US “misery index” — inflation rate plus unemployment rate —  is 5.06 percent (through last September). That’s the lowest level since April 1956 when the MI was 4.75 percent.

But are Americans as happy and confident as they’ve been since the postwar boom? Even more so than the 1990s? Doubtful. While consumer sentiment has rebounded strongly since Great Recession lows, it’s still below where it was during Bill Clinton’s presidency. And nearly two-thirds of Americans think the country on the wrong track.

October Jobs Report Is a Good One for “Crippled” America

 
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Chart via Capital Economics.

You really have to dig to find much wrong with the October jobs report. The 271,000 net new jobs were 50% higher than expectations. At 5.0%, the unemployment rate fell to its lowest level in seven years, as did the share of involuntary part-time workers. Average hourly earnings increased by 0.4%, pushing the annual growth rate to a six-year high. Over the past year, the US economy has created 2.8 million jobs.

No, There Aren’t More Than 90 Million Americans Unemployed

 

shutterstock_238058275Back in August, Donald Trump told Time:

You have 90 million people that aren’t working. Ninety-three million to be exact. If you start adding it up, our real unemployment rate is 42 percent.

While I usually don’t hear much about the “real” unemployment rate being that high, I frequently hear claims about 90-some million Americans being “jobless” or “out of work” or “on the sidelines” and so forth.

August Jobs Report: Government Jobs to the Rescue

 

090415job2

US job growth in August slowed from July — to 173,000 from 245,000 — as the unemployment rate fell to the lowest level since 2008, 5.1%. The Wall Street Journal offers a nice summary of the data, and what it might mean for the Federal Reserve’s upcoming interest rate decision.

Now jobs in the private sector — you know, the part of the economy producing “actual consumer-relevant value,” as economist Tyler Cowen has put it —  rose by just 140,000, the smallest gain in five months. Economist Robert Brusca is unimpressed, noting that “result lies in lower 17% of its queue of results over the last 59 months when jobs have been expanding. Government jobs however are the second strongest they have been over this period. That gain is what saved the headline from further embarrassment.”

August Jobs Report Won’t Change Minds at the Fed

 

shutterstock_111386480I tend to divide folks who talk about economics publicly into two camps: Those that comment after watching the news, and those that read actual reports about the data they’re discussing. If you just watched the news this morning what did you hear? This. If you actually read the report, you’re my kind of people.

This morning’s jobs report has a headline number that will tell you the job market was weaker than expected, rising 173,000, about 50,000 below what was anticipated. Now you’d think that alone would strengthen the argument that the Fed will not raise interest rates at its September 16-17 meeting. But the market swooned at the open, meaning market participants see this report as positive. And it was.

  1. Data revisions to June and July leave the last three months averaging 221,000, about where you would expect. There is substantial discussion of the likelihood of sharp revisions that tend to happen in August, too, so there was some discounting of a low payroll number in advance of the announcement.
  2. We not only got lower unemployment — a 5.1% reading — but we got it for the right reasons. The employment-to-population ratio ticked up, the number of people unemployed fell, and so did the number of discouraged workers. The U-6 rate was down to 10.3%, the lowest in 7 years.
  3. Private sector wages moved up 8 cents, continuing a good run. They’re up 2.1% from a year ago and weekly earnings are up 2.5%.  Average weekly hours ticked up a tenth too.

Shortly after the report, Richmond Federal Reserve president Jeffrey Lacker spoke to a group of retailers to explain why he thinks we still have to lift rates. While he did not directly comment on this morning’s report in those remarks, he said later that the report did not change his mind. I expect this report not to change anyone’s mind, though it will be used in the statements to justify whatever they had already decided to do. I will be very surprised if anyone says “this report made me change from hike to no hike,” or vice versa. There’s not enough here.

Member Post

 

Some of you remember I sent out the Ricochet Giraffe Signal earlier this year. I had lost my job and was including Ricochet in my job-hunting networking. A subset of those folks may have noticed my participation on Ricochet has dropped over the last month. This was due to my working a full-time contract job […]

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Member Post

 

Some of you remember I sent out the Ricochet Giraffe Signal earlier this year. I had lost my job and was including Ricochet in my job-hunting networking. A subset of those folks may have noticed my participation on Ricochet has dropped over the last month. This was due to my working a full-time contract job over […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Get your first month free.

Member Post

 

(The title is courtesy of Billy Joel, from Allentown on The Nylon Curtain (1982)– https://www.youtube.com/watch?v=BHnJp0oyOxs) It’s been a little more than a month since Uninstallation Day (my previous installment in this series). I was hoping to have good news to report, but although I have some promising developments, I’m still on my unintentional extended vacation… 8^) Preview […]

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June Jobs Report: 6 Years Into Economic Recovery, Is This The Best We Can Do?

 

070215jobs11

Nothing in the June jobs report to suggest any approaching US economic acceleration or surging inflation — or reason for the Fed to raise interest rates. The top line numbers were decent: 223,000 net new jobs, the unemployment rate fell to 5.3% from 5.5%. Also a big drop in the U-6 unemployment-underemployment rate.

The internals were less decent: The participation rate fell, the employment rate fell, the labor force fell by 432,000, April and May jobs were revised lower by 60,000, nominal wage growth was flat. What’s more, 2015 job growth of 208,000 a month is markedly lower than the 260,000 monthly average for all of last year. And if the participation rate had merely held steady from last month, that big jobless rate drop would have turned into a jump to 5.7%. Maybe this chart best sums up where we are six years into economic recovery (June was the anniversary month):

U3 Unicorns Puking Rainbow Recoveries

 

unicorn

Do you ever feel a bit of a disconnect between the continuous media reports that the economy is doing awesome (here, here, and here to name a few) and how much it feels like the economy, to use a technical term, sucks outside of the stock market? Well, you’re not alone, and a couple of basic charts will validate your feelings. This is not data produced in the depths of my basement while I replace the tinfoil around my head. These are government-reported numbers on the health of the labor market. I call your attention to the time period during which the media was harping on the theme of, “It’s the economy, stupid!” and our recent “awesome recovery.”

This first chart shows the labor force participation rate, measuring the percentage of adults who are working. I’m using this instead of the commonly reported – and improving – U3 unemployment rate, because U3 has about as much correlation with the health of the labor market as the ratio of pixies to hobgoblins in Neverland. The reason I’m so down on U3 is that it behaves as if the underemployed are fully employed. (Settle down, James Pethokoukis, I mean the objectively underemployed, as in, part-time workers who want or need to work full time.)

Going Through The Motions

 

51tgilp1VzL._SY300_It doesn’t take much sympathy to feel for the long-term unemployed, especially those who held down jobs for decades before discovering that — due to changes in the market, financial collapse, or injury — neither they nor their skills have useful employment. I’d even say that one needn’t be a raging leftist to at least consider whether the state should have some role in helping them transition into something new and remunerative, rather than let their skills and work habits atrophy to the point where they’re incapable of ever getting a new job.

It should come as little surprise that in Europe — where more than half of the unemployed haven’t had a job in over a year — consideration often turns into implementation. Sometimes, as this New York Times piece describes, that goes to some very, very weird places:

Sabine de Buyzer, working in the accounting department, leaned into her computer and scanned a row of numbers. Candelia [her employer] was doing well. Its revenue that week was outpacing expenses, even counting taxes and salaries. “We have to be profitable,” Ms. de Buyzer said. “Everyone’s working all out to make sure we succeed.”

The April Jobs Report: Is That All There is to This Economic Recovery?

 

050815jobs

So, a decent snapback in the US labor market. Net new jobs increased by 223,000 in April — matching the consensus forecast –while the unemployment rate fell by 0.1 percentage point to 5.4%, according to the Bureau of Labor Statistics. Labor force participation ticked up, making that jobless rate improvement look a bit stronger. The U-6 underemployment rate edged lower. Also, some more progress in the long-term jobless numbers.

Not so decent: The employment rate went nowhere. The March jobs number was revised lower from 126,000 to 85,000. Over the past three months, job gains have averaged 191,000 per month vs. 260,000 monthly in 2014. And, once again, weak wages: The broadest measure of average hourly earnings was up 0.1%, leaving average hourly earnings up 2.2% over the past year. Average hourly earnings for production and non-supervisory workers were up 0.1% and 1.9% year over year. (Double that rate would be nice.) What’s more, the US may still have a 3-6 million “jobs gap.”