Saturday, January 4, 2014

November 2013 Unemployment Analysis: Unemployment rate drops to 7.0%; 203K new jobs accross all sectors

The US unemployment rate fell to 7.0% as the 203,000 Non Farm Payroll jobs were created 

The US national unemployment rate fell to 7.0% as the economy continues to recover from the 2007-2009 recession. The November report had the moderate job growth but less than expected given need to support 4.1% annual GDP growth as reported by the BEA.  If the economy continues to grow above 4.0%, we could see job gains above 300,000 per month.

There was a broad, across the board increase in Non Farm Payrolls except information and finance. There were +14,000 government jobs created at the state and local level.

Below is a chart of steady job growth since December 2009 with an average of 194,000 jobs created over the past 12 months.

The national unemployment rate decreased to 7.0% which means there were 10.9 million unemployed workers out of a potential labor force of 155.2 million. There were positive revisions in the previous months NFP numbers of +8K. jobs. The black unemployment rate was 12.5%.

The civilian labor force increased by 455,000 and the number of people reporting themselves as employed  increased by 818,000.  The labor force participation rate was 63.0% and the employment to population ratio was 58.6%.

The private sector added 203,000 jobs while the government lost -7,000 jobs. There were 4.1 million people classified as long-term unemployed (out of work for 26 weeks or longer), the same as last month.   About 7.7 million people who were underemployed (working part time but wanted full time work). A total of 18.6 million workers were unemployed or underemployed (12.0% of the workforce).

The unemployment rate for women was calculated at 6.2% and men at 6.7%, while the rates for other groups remained largely unchanged: teenagers (21%), whites (6.2%), and blacks (12.5%). The Hispanic rate dropped by -37 basis points to 8.7%. A huge drop show the economy is recovering is paces that generate Hispanic employment.  Black teenage unemployment was 36%.

The Dow Jones Industrial Average dropped by about 1% on the news then moved well above 16000 for the month to close at 16,500 for the year.

The Political Economy

In the news of the political economy, the furloughed federal government workers returned to work and Janet Yellen will replace Ben Bernanke as the chairman of the federal reserve.

The Big Story

The big story is the continued high unemployment rate, low wages and slow growing economy.The year 2014 is shaping up a a decivisve year in US economic news.  In 2014, we will finally have gained back all of the jobs lost during the recession.

Black Unemployment

The national black unemployment rate was set at 12.5%. The number of black people holding jobs increased by +101,000 while the labor force was reduced by -6K causing a 0.5% decrease in the unemployment rate. The 12 month average black unemployment rate has been 13.3%, so we are finally dropping below the 12 month trend.

There was a 1% decrease in the "Real" black unemployment rate.  There were also improvements in the national rate (-26 basis points) and the black rate and U-6 rate (-0.6%) each leading to a large improvement in the "real" black unemployment rate.

Household Survey Details for November

As previously mention, there economy recovered from the government furhough. However, all of the trends for the long term unemployed worsened in November

The long-term unemployed (27 weeks or more) was 4.1 million people which represents 37.3% of the unemployed.  The median duration of unemployment was 17.0  weeks  while the average duration was 37.2 weeks.  

The “work part-time, wants full-time,” fell to 7.7 million.  This is a measure of excess labor in the marketplace. About 2.1 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.    The report estimated that there were 762K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.

All three categories dropped in November which is a postive sign of a tightening labor market. 

Establishment(Business) Survey Results for February

Non Farm Payroll increased by 203,000 which is well above the 12 month average of 150K jobs created since Dec 2009 (+194K Average for past 12 months). Shockingly, even government payrolls expanded(+7,000). Growth was broad based, with gains in manufacutring and services. Transportation added 30,000 and retail trade added 22,000 postions while business services increased by 35,000. Healthcare added 29.6K and leisure services jobs increased by 17,000.

Key sectors of the economy fared well. Construction added 17,000 while Manufacturing jumped 27,000 spots.  Temp Help, a negative indictor, grew by 16,400 workers.

Below is a chart of the job gains in the non farm payroll categories. 

Non-Farm Payroll Revision

September was revised up from +165K to +175 and October was revised down -4K to from 204,000 to 200,000 for a total upward revision of +8K.


ADP report a non farm payroll increase of 215,000 jobs. Small business (1-49) employees accounted for 105,000 new jobs. Medium sized business(50-499) added 48,000. And large businesses(500>) added 65,000 employees.

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