I recently read several news articles that blamed unemployment on workers not having the right skill sets. This just another cop out excuse for large and medium size firms to not hire. They also fail to mention the skill shortages exists only at the (low)price they want to pay. If they paid more, there is no skills gap.
Companies successfully got rid of their human resource, training and development departments during the business process re-engineering craze of the 1990's. The departments were viewed as non-value added (no direct bottom line contribution) so they were reduced, automated and outsourced.
In the tight labor market, companies have basically socialized employee training and development costs. They have gotten the workers, the government, and society to pay for something they used to provide.
Peter Cappelli at the Wharton HR Center has discussed this problem in more detail. His book is called "Why good people can't get good jobs".
Sunday, July 22, 2012
Sunday, July 15, 2012
Non Farm Payroll rose by 80,000. Black rate up to 14.4%. National rate stayed at 8.2%
June Unemployment Report Review
The BLS announced the US economy created only 80,000 net new jobs in June. The seasonally adjusted number job is a large drop from the 12 month average of 150,000 since June 2011. The slow jobs growth is linked to weak demand both domestically and internationally, consumer debt overhang, lack of government spending and a soft housing market. The US GDP growth rate was reported at 1.9% on May 31st, 2012.
The household survey reported an additional 128,000 people working but the population grew by 189,000 so unemployment remained steady. The participation rate (63.8%), the EM rate (58.6%) and the unemployment rate (8.2%) did not move.
Economists and economic writers have now reset their expectations to about 100K or less jobs each month, so the 80K number was in line with new expectations.
The average work week rose a small part of an hour (0.1) to 34.5 and average hourly wages rose slightly ($0.06) to $23.50.
Below is the median weekly wage in constant (inflation adjusted) dollars.
Wages have been basically flat since 1980. The second chart is median wages since 2000 by race: Total, white, black and Hispanic/Latino.
There was a little good news in the report: the household survey said the number of people who self reported they were working increased by 128,000 on a seasonally adjusted basis. An additional 156,000 people came back into the labor market which kept the unemployment steady. Many unemployment people are losing their benefits in the coming months.
Black Unemployment
The black unemployment rate rose to 14.4%. The black labor force participation rate was 62.0 (68.4% for black men over 20 and 63.0% for black women over 20). The black teenage unemployment was reported at 39%. For comparison, the white unemployment rate stayed at 7.4% and the Hispanic rate stayed at 11.0%.
Employment Stats
The long-term unemployed (27 weeks or more) stayed at 5.4 million people which represents 42% of the unemployed. The “work part-time, wants full-time” number was 8.2 million. These people are considered underemployed. About 2.5 million workers were classified as marginally attached to the labor force. They want work but have not looked in over four weeks. Finally, there were 821K discouraged workers (part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
As stated earlier, there were 80,000 jobs were added to the US economy in June. The private sector added 84,000 jobs (vs. adjusted 105,000 last month) and government employment dropped again by -4,000. Job growth came from increases in durable goods manufacturing, temp help, leisure and hospitality, computer information systems and business consulting. The losers were construction (-7K) and retail trade (-5K).
Manufacturing added 11,000 positions; Construction added 2, 000 jobs; business services was up 47,000 jobs and healthcare added only 11,000 new positions. US manufacturing continues to impress with solid gains (+500,000) from the bottom of the recession.
Government Employment
Total government employment drop by -4,000: the federal government lost 7,000 employees and the state governments lost 1,000 people while local employment was up 4,000. Since the recession started in December, 2007 the government has lost 433,000 jobs. The private sector has added 4.3 million jobs since December 2009.
Basically the lack of government hiring is slowing the economy. If government hiring continued at the same rate as private sector hiring and additional XXX,XXX jobs would have been created.
Seasonal Adjustment
One controversial aspect of the report is how the BLS handles seasonal adjustments. The household survey has reported an average of 500,000 new jobs each month since January on an unadjusted basis, yet the seasonally adjusted number shows only 150,000 new jobs on average. The seasonally adjusted number shows much lower employment growth. The establishment survey reported similar results. Since January, in the business establishment survey, there were about 460,000 non-seasonally adjusted new jobs on average. But the adjusted establishment numbers since January come in at an average of 150,000.
Other news
Average work week increased by 0.1 hours to 34.5 hours and wages added 6 cent in June.
ADP reported an increase in private payrolls of 176,000 positions.
Monster Employment Index moved up to 153 in June from 147 in May. Hiring was up 5% compared to same month last year.
The BLS announced the US economy created only 80,000 net new jobs in June. The seasonally adjusted number job is a large drop from the 12 month average of 150,000 since June 2011. The slow jobs growth is linked to weak demand both domestically and internationally, consumer debt overhang, lack of government spending and a soft housing market. The US GDP growth rate was reported at 1.9% on May 31st, 2012.
The household survey reported an additional 128,000 people working but the population grew by 189,000 so unemployment remained steady. The participation rate (63.8%), the EM rate (58.6%) and the unemployment rate (8.2%) did not move.
Economists and economic writers have now reset their expectations to about 100K or less jobs each month, so the 80K number was in line with new expectations.
The average work week rose a small part of an hour (0.1) to 34.5 and average hourly wages rose slightly ($0.06) to $23.50.
Below is the median weekly wage in constant (inflation adjusted) dollars.
Wages have been basically flat since 1980. The second chart is median wages since 2000 by race: Total, white, black and Hispanic/Latino.
There was a little good news in the report: the household survey said the number of people who self reported they were working increased by 128,000 on a seasonally adjusted basis. An additional 156,000 people came back into the labor market which kept the unemployment steady. Many unemployment people are losing their benefits in the coming months.
Black Unemployment
The black unemployment rate rose to 14.4%. The black labor force participation rate was 62.0 (68.4% for black men over 20 and 63.0% for black women over 20). The black teenage unemployment was reported at 39%. For comparison, the white unemployment rate stayed at 7.4% and the Hispanic rate stayed at 11.0%.
Employment Stats
The long-term unemployed (27 weeks or more) stayed at 5.4 million people which represents 42% of the unemployed. The “work part-time, wants full-time” number was 8.2 million. These people are considered underemployed. About 2.5 million workers were classified as marginally attached to the labor force. They want work but have not looked in over four weeks. Finally, there were 821K discouraged workers (part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
As stated earlier, there were 80,000 jobs were added to the US economy in June. The private sector added 84,000 jobs (vs. adjusted 105,000 last month) and government employment dropped again by -4,000. Job growth came from increases in durable goods manufacturing, temp help, leisure and hospitality, computer information systems and business consulting. The losers were construction (-7K) and retail trade (-5K).
Manufacturing added 11,000 positions; Construction added 2, 000 jobs; business services was up 47,000 jobs and healthcare added only 11,000 new positions. US manufacturing continues to impress with solid gains (+500,000) from the bottom of the recession.
Government Employment
Total government employment drop by -4,000: the federal government lost 7,000 employees and the state governments lost 1,000 people while local employment was up 4,000. Since the recession started in December, 2007 the government has lost 433,000 jobs. The private sector has added 4.3 million jobs since December 2009.
Basically the lack of government hiring is slowing the economy. If government hiring continued at the same rate as private sector hiring and additional XXX,XXX jobs would have been created.
Seasonal Adjustment
One controversial aspect of the report is how the BLS handles seasonal adjustments. The household survey has reported an average of 500,000 new jobs each month since January on an unadjusted basis, yet the seasonally adjusted number shows only 150,000 new jobs on average. The seasonally adjusted number shows much lower employment growth. The establishment survey reported similar results. Since January, in the business establishment survey, there were about 460,000 non-seasonally adjusted new jobs on average. But the adjusted establishment numbers since January come in at an average of 150,000.
Other news
Average work week increased by 0.1 hours to 34.5 hours and wages added 6 cent in June.
ADP reported an increase in private payrolls of 176,000 positions.
Monster Employment Index moved up to 153 in June from 147 in May. Hiring was up 5% compared to same month last year.
Monday, July 9, 2012
ADP Payroll Report might be better than BLS
I heard some commentators on the radio discussing the difference between the ADP employment report for June (+176,000) and the BLS non farm payroll number (+80K).
We believe the ADP numbers are more accurate actual number. Here's why.
The number are projections from an actual payroll system, not surveys. The data are based on new employees paid from ADP. Each one unique and trackable. There is much less bias in the these numbers because people want to get paid. The same
The BLS survey is subject to sampling error and seasonal fluctuations. There is less of an incentive to answer the BLS survey.
So right now, we are watch the ADP payroll number and the weekly jobless claims
We believe the ADP numbers are more accurate actual number. Here's why.
The number are projections from an actual payroll system, not surveys. The data are based on new employees paid from ADP. Each one unique and trackable. There is much less bias in the these numbers because people want to get paid. The same
The BLS survey is subject to sampling error and seasonal fluctuations. There is less of an incentive to answer the BLS survey.
So right now, we are watch the ADP payroll number and the weekly jobless claims
Wednesday, June 27, 2012
Government drug discoveries account for 9% to 21% of New Drugs
Some one asked me to research an interesting question. What percent of drugs originated at government labs ?
The answer, depending on how you measure, is between 9-21%. Here is an article in the New England Journal of Medicine discussing the success of government funded drug research. The report uses a broader definition of public sector research that includes universities and non-profit hospitals. Here.
Here is a summary of the article in the LA Times. Here.
In related news, the NIH announced a new center to work more closely with drug companies to develop new compounds. The NY Times has a piece here.
Here is the web site of the organization, the National Center for Advancing Translational Sciences. NCATS is Here.
When you look at the success of the US drug industry, you have to acknowledge that the money invested by the government in basic research was well spent.
The answer, depending on how you measure, is between 9-21%. Here is an article in the New England Journal of Medicine discussing the success of government funded drug research. The report uses a broader definition of public sector research that includes universities and non-profit hospitals. Here.
Here is a summary of the article in the LA Times. Here.
In related news, the NIH announced a new center to work more closely with drug companies to develop new compounds. The NY Times has a piece here.
Here is the web site of the organization, the National Center for Advancing Translational Sciences. NCATS is Here.
When you look at the success of the US drug industry, you have to acknowledge that the money invested by the government in basic research was well spent.
Saturday, June 23, 2012
Low pay at Apple Stores
Why does Apple pay it's retail employee's so little ?
Well, obviously, because it can. But the real answer is way more complex. And very little can be done to raise the pay in the short term except for a "shaming" article in the NYT.
The real answer is that corporations have changed how they develop talent. They no longer develop internal people who grow up with the company but instead purchase talent on the open market.
So the 21st century corporation is a silo's of experts: HR, product design, engineering, accounting and retail store operations. They only work together when forced to, for example design, manufacturing engineering and cost accounting. Marketing would jump in later at a typical company. Apple had design and marketing embodied in Steve Jobs. Apple is a "product" company and retail operations are important but secondary. Their stores could look like a cell phone store and they would sell the product.
Large, US corporations no longer develop expertise in-house. They have found it too expensive. Especially in areas like HR or retail operations. Instead they have hired experts from the outside. Sure the executives claim Apple values but they did not grow up there.
So apple brought in an expert from the gap, or best buy, or Verizon to run retail. And they were devoted to the bottom line of their area, not the company as a whole. We all know that labor costs are a large piece of the bottom line. HR and retail operations were look at their own internal bottom line at the cost of the companies reputation.
You think Apple would wise up after bad press for poorly treated overseas manufacturing workers at Foxconn, for the designed in "California tag," and for record CEO pay. Now we find out they are underpaying their retail workers.
We are in a new era of large scale corporate dominance of politics and the media leave only guilt and shame as a way of increasing wages.
Well, obviously, because it can. But the real answer is way more complex. And very little can be done to raise the pay in the short term except for a "shaming" article in the NYT.
The real answer is that corporations have changed how they develop talent. They no longer develop internal people who grow up with the company but instead purchase talent on the open market.
So the 21st century corporation is a silo's of experts: HR, product design, engineering, accounting and retail store operations. They only work together when forced to, for example design, manufacturing engineering and cost accounting. Marketing would jump in later at a typical company. Apple had design and marketing embodied in Steve Jobs. Apple is a "product" company and retail operations are important but secondary. Their stores could look like a cell phone store and they would sell the product.
Large, US corporations no longer develop expertise in-house. They have found it too expensive. Especially in areas like HR or retail operations. Instead they have hired experts from the outside. Sure the executives claim Apple values but they did not grow up there.
So apple brought in an expert from the gap, or best buy, or Verizon to run retail. And they were devoted to the bottom line of their area, not the company as a whole. We all know that labor costs are a large piece of the bottom line. HR and retail operations were look at their own internal bottom line at the cost of the companies reputation.
You think Apple would wise up after bad press for poorly treated overseas manufacturing workers at Foxconn, for the designed in "California tag," and for record CEO pay. Now we find out they are underpaying their retail workers.
We are in a new era of large scale corporate dominance of politics and the media leave only guilt and shame as a way of increasing wages.
Sunday, June 17, 2012
Number of Employed Whites Drops Dramatically During Recession
Five million less whites are in the workforce
I was working on a longer term project on data from the Equal Employment Opportunity Commission. The EEOC is the only source for private employment data by race. The idea is to measure how under-represented blacks and Hispanics are in different fields. If you are going to measure a difference then you need a standard. So the benchmark I chose was the percentage of whites, blacks and Hispanics employed in the general economy. For example: in May 2012 approximately 75% of the workforce was white, 14% were Hispanic and 11% of workers were black. So we would think that 75% of managers are white, 14% Hispanic and 11% are black.
While building the standard, I realized that during the recession, white employment had dropped by close to 5 million workers from the beginning of the recession. The actual drop during the recession was 6.2 million workers but has since recovered to closer to 5 million. Definitely time for some quick charts.
This chart shows the total number of employed people during the recession. You can see about 5 million whites have left the workforce. Black and Hispanic employment is starting to rebound.
This is a chart of the percent composition by race of the work force since 2007. The end of year "bumps" is the chart come when the census bureau adjusts the population totals.
For some perspective, here are the longer term trends since 1980. While the work force has grown, the largest percentage of new employees comes from the black and Hispanic populations.
The chart below show the big historic drop in white workers.
Here is the long term percentage of work force compositions.
Note: Since Hispanics can be of any race they can be double counted in the black / white statistics. So we typically compute the total white + black + Hispanic employment (which is more than 100%) then divide each groups individual employment amount by the total employment which reduces or "normalizes" the totals.
I was working on a longer term project on data from the Equal Employment Opportunity Commission. The EEOC is the only source for private employment data by race. The idea is to measure how under-represented blacks and Hispanics are in different fields. If you are going to measure a difference then you need a standard. So the benchmark I chose was the percentage of whites, blacks and Hispanics employed in the general economy. For example: in May 2012 approximately 75% of the workforce was white, 14% were Hispanic and 11% of workers were black. So we would think that 75% of managers are white, 14% Hispanic and 11% are black.
While building the standard, I realized that during the recession, white employment had dropped by close to 5 million workers from the beginning of the recession. The actual drop during the recession was 6.2 million workers but has since recovered to closer to 5 million. Definitely time for some quick charts.
This chart shows the total number of employed people during the recession. You can see about 5 million whites have left the workforce. Black and Hispanic employment is starting to rebound.
This is a chart of the percent composition by race of the work force since 2007. The end of year "bumps" is the chart come when the census bureau adjusts the population totals.
For some perspective, here are the longer term trends since 1980. While the work force has grown, the largest percentage of new employees comes from the black and Hispanic populations.
The chart below show the big historic drop in white workers.
Here is the long term percentage of work force compositions.
Note: Since Hispanics can be of any race they can be double counted in the black / white statistics. So we typically compute the total white + black + Hispanic employment (which is more than 100%) then divide each groups individual employment amount by the total employment which reduces or "normalizes" the totals.
Saturday, June 2, 2012
May jobs report: Only 69K new jobs. New Normal.
The new normal: 69,000 net new jobs; Black rate up to 13.6%. National rate increased to 8.2%
Jobs report shows 69,000 net new jobs created in May. This is statistically near the new standard rate of 100,000 but below the 12 month average of 150,000. Economists and commentators said the low figure was due to low demand domestically and internationally.
On June 1st, 2012, the BLS announced the US economy created only 69,000 net new jobs in May. The jobs number is a large drop from the 12 month average of 150,000 since June 2011. We also got negative revisions of the March and April jobs reports. March was reduced by -11,000 to 142,000 new jobs and April was reduced by -38,000 to 77,000 new positions. The slow jobs growth is linked to weak demand both domestically and internationally. The US GDP growth rate was reported at 1.9% on May 31st, 2012.
The BLS Jobs report has become the one economic statistic everyone watches. The press headline coverage was "poor" with some reports calling the report "dismal","gloomy" and a "train wreck". However, coverage of the details was quite good. The Romney immediately attacked the president on jobs. He called the report “devastating.” However he appeared a little overzealous and gleeful at the bad news. The administration called for additional stimulus from congress. A more likely scenario is stimulus activity by the Federal Reserve.
Economists had expecting 100K to 150K new jobs, however the actual number can vary by plus or minus 100,000 jobs. The Dow Jones equity index lost about 274 index points on the announcement but recovered early next week based on expected Fed intervention.
As always, employment figures must be considered over several months. Some of the changes are due to random statistical variation. The average work week declined by 0.1 hours to 34.4 and average hourly wages were stagnant at $23.41. (I don’t even know why I bother to write stagnant, wages adjusted for inflation, have not changed in more than 30 years. See chart below).
Average Weekly Earning from Jan 1979 to May 2012
There was a little good news in the report: the household survey said the number of people who self reported they were working increased by 422,000. An additional 622,000 people came back into the labor market which pushed the unemployment rate up.
The national labor force participation rate increased 0.2% to 63.8%.
Black Unemployment
The black unemployment rate rose to 13.6%. The black labor force participation rate was 61.3 (68.1% for black men over 20 and 62.1% for black women over 20). The black teenage unemployment was reported at 36%. The white unemployment rate stayed at 7.4% and the Hispanic rate jumped up to 11.0%.
Employment Stats
The long-term unemployed (27 weeks or more) rose to 5.4 million people which represents 43% of the unemployed. The “work part-time, wants full-time” number was 8.1 million. These people are considered underemployed. The same monthly number of people: 2.4 million were marginally attached to the labor pool. They want work but have not looked in over four weeks. And there were 830K discouraged workers (part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
As stated earlier, only 69,000 jobs were added to the US economy in May. The private sector added 82,000 jobs (vs. adjusted 77,000 last month) and government employment dropped again by -13K. Job growth was concentrated in durable goods manufacturing, trade and transportation and healthcare. The losers were construction (-28K).
Now let’s look at some of the key areas of the economy. Manufacturing added 12,000 spots; Construction lost -28,000 jobs; Business services was flat at -1K jobs and healthcare added 46,000 new positions.
Average work week shrank 0.1 hours to 34.4 hours and wages added 2 cent in May.
ADP reported an increase in private payrolls of 133,000 positions.
Monster Employment Index moved up to 147 in May from 146 in April. Hiring was up 1% compared to same month last year.
Jobs report shows 69,000 net new jobs created in May. This is statistically near the new standard rate of 100,000 but below the 12 month average of 150,000. Economists and commentators said the low figure was due to low demand domestically and internationally.
On June 1st, 2012, the BLS announced the US economy created only 69,000 net new jobs in May. The jobs number is a large drop from the 12 month average of 150,000 since June 2011. We also got negative revisions of the March and April jobs reports. March was reduced by -11,000 to 142,000 new jobs and April was reduced by -38,000 to 77,000 new positions. The slow jobs growth is linked to weak demand both domestically and internationally. The US GDP growth rate was reported at 1.9% on May 31st, 2012.
The BLS Jobs report has become the one economic statistic everyone watches. The press headline coverage was "poor" with some reports calling the report "dismal","gloomy" and a "train wreck". However, coverage of the details was quite good. The Romney immediately attacked the president on jobs. He called the report “devastating.” However he appeared a little overzealous and gleeful at the bad news. The administration called for additional stimulus from congress. A more likely scenario is stimulus activity by the Federal Reserve.
Economists had expecting 100K to 150K new jobs, however the actual number can vary by plus or minus 100,000 jobs. The Dow Jones equity index lost about 274 index points on the announcement but recovered early next week based on expected Fed intervention.
As always, employment figures must be considered over several months. Some of the changes are due to random statistical variation. The average work week declined by 0.1 hours to 34.4 and average hourly wages were stagnant at $23.41. (I don’t even know why I bother to write stagnant, wages adjusted for inflation, have not changed in more than 30 years. See chart below).
Average Weekly Earning from Jan 1979 to May 2012
There was a little good news in the report: the household survey said the number of people who self reported they were working increased by 422,000. An additional 622,000 people came back into the labor market which pushed the unemployment rate up.
The national labor force participation rate increased 0.2% to 63.8%.
Black Unemployment
The black unemployment rate rose to 13.6%. The black labor force participation rate was 61.3 (68.1% for black men over 20 and 62.1% for black women over 20). The black teenage unemployment was reported at 36%. The white unemployment rate stayed at 7.4% and the Hispanic rate jumped up to 11.0%.
Employment Stats
The long-term unemployed (27 weeks or more) rose to 5.4 million people which represents 43% of the unemployed. The “work part-time, wants full-time” number was 8.1 million. These people are considered underemployed. The same monthly number of people: 2.4 million were marginally attached to the labor pool. They want work but have not looked in over four weeks. And there were 830K discouraged workers (part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
As stated earlier, only 69,000 jobs were added to the US economy in May. The private sector added 82,000 jobs (vs. adjusted 77,000 last month) and government employment dropped again by -13K. Job growth was concentrated in durable goods manufacturing, trade and transportation and healthcare. The losers were construction (-28K).
Now let’s look at some of the key areas of the economy. Manufacturing added 12,000 spots; Construction lost -28,000 jobs; Business services was flat at -1K jobs and healthcare added 46,000 new positions.
Average work week shrank 0.1 hours to 34.4 hours and wages added 2 cent in May.
ADP reported an increase in private payrolls of 133,000 positions.
Monster Employment Index moved up to 147 in May from 146 in April. Hiring was up 1% compared to same month last year.
Sunday, May 20, 2012
Black Labor Force Participation Rate
We have been watching the labor force participation rate closely as it falls during the recession. The rate, which be blow the long term average, measures how many Black people have jobs and are participating in the labor force.
Saturday, May 19, 2012
Total New Jobs: 115,000; Black rate drops to 13.0%; US rate at 8.1%
BLS April Unemployment Report Review
The BLS announced the US economy created only 115,000 new jobs in April. Economists had expected at least 150,000 new jobs, however the number can vary by plus or minus 100,000 jobs. The amount of new jobs was below what was expected but in line with US GDP growth rate of 2.2%. The US national rate was reported at 8.1%.
The US national rate continues to slowly drop which is good news for President Obama's election campaign.
The Dow Jones equity index lost about 100 points on the announcement (and 400 index points for the week) based on the poor job creation news. Almost every other employment indicator was the same as the previous month.
The biggest news was a large increase in people who were not in the labor force. An additional 522,000 people dropped out of the labor force. The national labor force participation rate decreased 0.2% to 63.6% which is the lowest since December 1981. Black labor force participation was 61.3 (63.2% for Black men and 59.7% for Black women) which is also similar to the rate during the early 1980s. The black rate peaked at over 66% during the late 1990s. Both the participation rate and the “not in the labor force” rate affect the unemployment rate which dropped by 0.1%. Rate is dropping for the wrong reason: people leaving the labor force not growth in the jobs market.
The black unemployment rates is displayed below.
The black rate bounced down to 13.0% because of a drop in the size of the labor force and an increase in the number of people working. The white unemployment rate increased ten basis points to 7.4% and the Hispanic rate stayed at 10.3%. The black teenage unemployment was reported at 38%.
The "real" black underemployment rate was above 20% but declining. It has dropped by 15% in the last year.
There was no major news from the Obama or Romney campaigns on jobs or economics.
The long-term unemployed (27 weeks or more) dropped slightly to 5.1 million people which represents 41% of the unemployed. The “work part-time wants full-time” number was 7.9 million. These people are considered under employed. Two million, four hundred thousand people were marginally attached to the labor pool. They want work but have not looked in over four weeks. And there were 968K discouraged workers(part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
Private sector hiring added 130,000 jobs (vs. 166,000 last month) and government employment dropped again by -15K (local government -12,000). Job growth was concentrated in durable goods manufacturing, business services and healthcare. The losers were construction (-2K) and transportation and warehousing(-16,600 jobs). Government employment was down by -15,000.
Let’s review some of the key areas of the economy. Durable goods manufacturing added 16,000 spots; Construction lost -2000 jobs; Business services added 62K(21K temp help) and healthcare added 18,000 new positions.
The chart below shows the breakdown by minor category. You can see that the biggest jump was in business services. Growth was broad based coming from several technical areas. Construction is still hurting. Construction is about 5% of GDP. Manufacturing continue grow.
You can see from the chart below that job growth slowed this month compared to the recent winter months where more than 200,000 jobs were created.
The US is making progress in recovering from the recession. We are still down about 5 million jobs since the start of the recession. Approximately 2.5 million jobs have been created since the end of the recession.
At the current rate of growth, we will regain the lost jobs some time in the year 2016 based on a linear forecast. However, are more realistic recovery curve would flatten as the recovery continues, so we expect the real date to be around 2018.
Non-farm payrolls were revised in February upward by +19K (from 240,000 to 259,000) and in March by +34,000(from 120K to 154K).
Average work week was unchanged at 34.5 hours and wages added 1 cent in March.
ADP reported an increase in private payrolls of 119,000 positions.
Monster Employment Index moved up to 146 in April from 143 in March. Hiring was up 1% compared to same month last year.
The BLS announced the US economy created only 115,000 new jobs in April. Economists had expected at least 150,000 new jobs, however the number can vary by plus or minus 100,000 jobs. The amount of new jobs was below what was expected but in line with US GDP growth rate of 2.2%. The US national rate was reported at 8.1%.
The US national rate continues to slowly drop which is good news for President Obama's election campaign.
The Dow Jones equity index lost about 100 points on the announcement (and 400 index points for the week) based on the poor job creation news. Almost every other employment indicator was the same as the previous month.
The biggest news was a large increase in people who were not in the labor force. An additional 522,000 people dropped out of the labor force. The national labor force participation rate decreased 0.2% to 63.6% which is the lowest since December 1981. Black labor force participation was 61.3 (63.2% for Black men and 59.7% for Black women) which is also similar to the rate during the early 1980s. The black rate peaked at over 66% during the late 1990s. Both the participation rate and the “not in the labor force” rate affect the unemployment rate which dropped by 0.1%. Rate is dropping for the wrong reason: people leaving the labor force not growth in the jobs market.
The black unemployment rates is displayed below.
The black rate bounced down to 13.0% because of a drop in the size of the labor force and an increase in the number of people working. The white unemployment rate increased ten basis points to 7.4% and the Hispanic rate stayed at 10.3%. The black teenage unemployment was reported at 38%.
The "real" black underemployment rate was above 20% but declining. It has dropped by 15% in the last year.
There was no major news from the Obama or Romney campaigns on jobs or economics.
The long-term unemployed (27 weeks or more) dropped slightly to 5.1 million people which represents 41% of the unemployed. The “work part-time wants full-time” number was 7.9 million. These people are considered under employed. Two million, four hundred thousand people were marginally attached to the labor pool. They want work but have not looked in over four weeks. And there were 968K discouraged workers(part of marginally attached) who are not looking because they believe there is no job for them.
Non-Farm Payrolls
Private sector hiring added 130,000 jobs (vs. 166,000 last month) and government employment dropped again by -15K (local government -12,000). Job growth was concentrated in durable goods manufacturing, business services and healthcare. The losers were construction (-2K) and transportation and warehousing(-16,600 jobs). Government employment was down by -15,000.
Let’s review some of the key areas of the economy. Durable goods manufacturing added 16,000 spots; Construction lost -2000 jobs; Business services added 62K(21K temp help) and healthcare added 18,000 new positions.
The chart below shows the breakdown by minor category. You can see that the biggest jump was in business services. Growth was broad based coming from several technical areas. Construction is still hurting. Construction is about 5% of GDP. Manufacturing continue grow.
You can see from the chart below that job growth slowed this month compared to the recent winter months where more than 200,000 jobs were created.
The US is making progress in recovering from the recession. We are still down about 5 million jobs since the start of the recession. Approximately 2.5 million jobs have been created since the end of the recession.
At the current rate of growth, we will regain the lost jobs some time in the year 2016 based on a linear forecast. However, are more realistic recovery curve would flatten as the recovery continues, so we expect the real date to be around 2018.
Non-farm payrolls were revised in February upward by +19K (from 240,000 to 259,000) and in March by +34,000(from 120K to 154K).
Average work week was unchanged at 34.5 hours and wages added 1 cent in March.
ADP reported an increase in private payrolls of 119,000 positions.
Monster Employment Index moved up to 146 in April from 143 in March. Hiring was up 1% compared to same month last year.
Thursday, May 3, 2012
All Labor...
All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.
Martin Luther King, Jr.
Martin Luther King, Jr.
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