February Employment Review

The US Economy added 242,000 non farm payroll jobs in February continuing strong job performance in a period usually affected by seasonal layoff and weather.

The national unemployment rate stayed at 4.9%. The labor force participation rate increased to 62.9% as the labor force increased by more than half a million people (555,000). Of the 555,000 people who joined the labor market, 530K reported working. 

The Black unemployment rate was 8.8% while the Black participation rate moved sides ways. Younger employees enter the labor market while old works exited.

The black unemployment rate has also fallen below it's longer term average.

 
The Black U-6 which we have been calling the "Real Black Unemployment Rate" was calculated at 13.6%.

Manufacturing jobs shrank again in February losing 16,000 positions. In a positive sign temporary help positions also declined.

September Unemployment Report Review

Unemployment rate drops to 7.8%; Broad employment gains in most areas.

US national unemployment rate fell to 7.8% from an August rate of 8.1%. The BLS household survey reported an additional 873, 000 people found employment in September. The number is a crazy, high number and well above the yearly average of 150K.  You can bet it will be reduced in later reports. The establishment (non farm payroll) survey showed companies hired an additional 114000 more workers. The NFP number is from the BLS business survey and is considered more accurate than the household survey. All major employment rates declined from the previous month. The president reacted positively to the numbers. Mitt Romney said they were too low and the country could do better. The stock market was slightly down on the news.

Adding some comedy to the mix were the wacky comments of Jack Welsh (CEO of GE – 1981 to 2001). Jack said in a twitter message that the numbers were manipulated to benefit Obama. The funny part is that Neutron Jack’s public ignorance of unemployment statistics calls in to question his reputation and leadership at GE. Was firing 100,000 GE employees strategic or lucky ? Either way, Jack Welch, like Donald Trump, has moved from business leader to entertainer.

The black unemployment rate moved down to 13.4%. The historic average since 1972 is 12.3%. The size of the black labor force dropped by about -34K overall and was affected by 84K additional people who found jobs and 70K who dropped out of the labor market. Add in the fact that the black population grew by 37K and you get a declining black unemployment rate. The national labor force participation rate rose to 63.6%. Black labor force participation was 61.7 (67% for Black men, 62% for Black women and 29% for black teenagers) Unemployment by race dropped in all major groups. The black national rate shrank to 13.4%, the white rate dropped to 7.0% and the Hispanic rate also fell to 9.9%. The black teenage unemployment was reported at 37%.

The long-term unemployed (27 weeks or more) decreased to 4.84 million people which represents 40% of the unemployed. The “work part-time wants full-time” number was 8.6 million. These people are considered under employed. Two and a half 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. And there were 802K discouraged workers (part of marginally attached) who are not looking because they believe there is no jobs for them.

Non-Farm Payroll Increased by 114,000 jobs. It was the 24th straight month of job growth.

The economy has recovered more than half of the jobs lost during the recession.

A very rough estimate predicts all recession jobs will be recovered by about June 2014 regardless of who is president. Below is a crude regression line based on job gains in the household survey and the business survey which is used to predict the June 2014 date.

Non-Farm Payrolls

As we mention in the summary, non-farm payrolls added 114,000 jobs.  Private sector hiring added 104,000 jobs (vs. 142,000 last month) and government employment added 10K jobs. Job growth was concentrated in healthcare and transportation.   The losers were manufacturing(-16K), information technology and local government.

Manufacturing employment has continued to fall since president Obama mention a resurgence in US manufacturing.

Non-farm payrolls were revised in July upward by 40,000 (from 141K to 181K) and upwards for August by plus 46,000 from (96K to 142K). That’s an addition of 86,000 jobs additional jobs.

The chart below shows the job growth was broadly based with healthcare creating the highest number of jobs.

Average work week was unchanged at 34.5 hours and wages added 7 cent in September.

ADP reported an increase in private payrolls of 114,000 positions for September.

US Monster Employment Index moved down 2% to 153 from 56 in August. Hiring was down 2% compared to same month last year. 

The October’s report shows slow employment growth but positive details

The report for September unemployment shows slow growth but positive details.

The report has a couple of positive highlights: A drop in Black unemployment, some upward revisions of non farm payrolls, hiring in education and temp help sectors and an increase in private employment index. The big news was a near 1% drop Black unemployment rate now 15.1%. The second high light was the major upward revision (plus 50%) for non farm payrolls for August(57,000 to 104,000) and September (103,000 to 158,000).

Non farm payrolls increased 80,000 (104,000 private jobs offset by a loss of -24,000 public jobs). However, 80K is below the new benchmark of 100K jobs, so the report is rates as “poor”.

The rate itself moved down to 9.0%. The rate has been stuck at approximately 9.0% for the whole year. It has bounced around between 8.8% and 9.2% since January, 2011.

Politically, the house republicans continue to block any stimulus measures. The Fed has said it will keep interests rate at zero for the next two years. Banks continue to be reluctant to lend.

The overall unemployment rate was 9.0% and the Black unemployment rate stayed at 15.1%. The rate for Whites (8.0%) and Hispanics (11.4%) was little changed.
The long-term unemployed dropped by 366,000 to 5.9 million (42.4% of total). The part-time employed for economic reasons rose to 8.9 Million and the marginally attached stayed the same at 2.6 Million.

Non farm payroll employment increased by 103,000 jobs with growth in business services, education and transportation and utilities. Health care added only 16,000 jobs. There was good news in two future oriented sectors: education (long-term ) at 11,000 and temp help (short term) added 15,000.

Average work week was unchanged and wages by $0.05 cents in October following a $0.06 raise in September. The employment diffusion index (a hiring signal) was still positive (55.4) but down 0.2.

There was some good news on revisions. August NFP was raised from +57K to +104K and September NFP was raised from 103K to 158K.

ADP reported a 110,000 payroll increase and also revised upward, it’s August to September number to 116,000 payroll jobs.

Monster Employment Index increase to 151, up 11% compared to last year and up 2% for the month. Monster said the index was pushed up by retailers hiring temporary workers for an early Christmas season.

June unemployment report is worse than May. Black unemployment rises to 16.2%; National rate 9.2%

June unemployment report is worse than May. Black unemployment rises to 16.2%; National rate 9.2%

The June unemployment report was flat out bad. You have to wonder how much bad news is enough and when will something be done about unemployment. Only 18,000 net new jobs were created. That is the lowest since September 2010 when the economy was still losing jobs. The national unemployment rate rose to 9.2% and the Black unemployment rate rose to 16.2%. Economists had predicted over 100,000 new jobs. The lower than expected number has caused a stock market drop. You have to ask if anyone really cares about the unemployed.

Private non farm payroll increased +57,000 which was off set by a drop of -39,000 government workers. Employment increased in business services by just +12,000 while healthcare went up by +17,000. Manufacturing added +6K(durable +15K, non durable -9K). Construction also lost -9K. The biggest drop was in local government jobs which fell by 28,000.

Black Unemployment Up Again

Black unemployment increased again to 16.2%. It was 15.3% in Feb. 2011. The 16.2% was close to the BU peak of 16.5% in Mar/Apr 2010. In Jan 2007, the rate was 7.9 percent. About 2.88 million Black people remained unemployed in June, 2011 about the same number as May. The Black labor force participation rate was reported at 61.0%. In February 2010, it was 62.7. The number of Blacks holding jobs shrank by 15,000. An additional 47,000 Blacks dropped out of the labor force in June.

In other bad news, the long-term unemployed (out of work for more than 26 weeks) increased to 89,000 to 6.29 million. The long term unemployed are 44.4% of the total unemployed.

The number of part-time workers for economic reasons was 8.6 Million. These are people who would like full-time work but cannot find it. Marginally attached workers stayed around 2.7 million. These are people who have looked for work in the past 12 month but are not counted as part of the labor force. If they were included in the labor force, unemployment rate it would be 1.4% higher: 10.6%.

The number of discouraged workers dropped year-to-year. Last June there were 1.2 million. Currently there are 922,000 discouraged workers, a 18% drop. Discouraged workers have stopped looking for work because they believe no work is available for their skills.

Establishment Data

Non farm Payrolls recorded a token increase of 18,000. The private sector added only 57,000 jobs which were offset by a -39,000 drop in government jobs Retail trade stores added +5,000 and business and professional services added a meager 12,000. Health care added 17,000 and manufacturing added 6,000.

In other bad news, Temporary Help Services(THS) shrank by -12,000 jobs. THS is a closely watched, bell-weather category. Traditionally, it has grown during recessions as employers are unwilling to make the investment of hiring long term employees, then when the economy picks-up, the demand for temporary help drops. Lately, as employers’ use of “temps” has changed, temporary help has stayed strong.
The drop in THS coupled with a slow economic growth singnals a widespread lack of job opportunities across the economy. “Even temps can’t find jobs!”

Construction was down -9,000 jobs.. Construction employment is also closely watched as an economic indicator. Construction employment has been depressed since the collapse of the housing “bubble” in 2007.

And finally some downward revisions of prior month payrolls. The April new job creation number was revised down from +232,000 to +217,000 and May was revised down from +54K to +25K.

ADP reported 157,000 new jobs were added.

The monster help wanted index was at 146 , the highest level of demand since October 2008.

The weekly initial unemployment claims was at 427,00 for the week ending July 7th, 2011, still above 400,000 below which the US economy is considered to be adding jobs.

v2

Another worrisome jobs report: Unemployment drops for the wrong reason

The US Bureau of Labor Statistics announced on Friday, January 7th, 2011 the results of the December household and establishment employment survey. The general unemployment rate dropped unexpectedly to 9.4% of the labor force. Non-Farm payroll grew by 103,000 jobs. The biggest gains were in health care and leisure and hospitality.



The lower rate was based on 123,000 workers who have dropped out of the labor force in December. The labor participation rate was 64.3% overall down from 64.7 a year ago. Between December 2009 and December 2010 the working age population increased from 236.9 million people to it was 238.9 million: about a 1.95 million increase. However the number of people participating in the labor market increased only 500K a difference of 1.45 million. In other words 1.5 million people dropped out of the labor market.

The economy grew less than expected adding only 103,000 jobs. Many economists expected around 140K – 150K jobs. In addition, most of the jobs came from the retail section which is heavy influenced by seasonal trend. Private payrolls added 113,000 jobs while government dropped 10K.

Here us a graph of Non-Farm Payroll since the recession.



The economy is still "short" 7 million jobs from the beginning of the recession.




While the the general unemployment rate dropped 0.4%, the Black Unemployment rate was little changed at 15.8%. The rate for Hispanics was 13.0%.



The Non Farm Payroll employment numbers showed an increase of 103,000 jobs. Job gains in private services were slighty offset by a 10,000 job decrease in the government sector and a loss of 2,000 in manufacturing.



Average unemployment duration also increased. The average was 34.2 weeks and increase of 0.3 weeks and the median (half under / half over) increased 0.7 weeks to 22.4 weeks. 6.4 Million people (44% of the total) were out of work for more than 27 weeks. The figure also represents a jump of 113,000 in the long-term unemployed.

There are other revealing statistics: The number of people working part time for economic reasons was approximately 8.9 million. The number of discouraged workers increased from 1.28 million to 1.32 million (about 40,000). Discouraged workers have increase 389,000 since the same period last year. Discouraged workers are people who have not looked in the past 4 weeks because they believe no work is available, could not find work, lack training or employer discrimination. Part-time for economic reasons” workers dropped by 29,000.

Of related interest, ADP, released it’s employment report on Wednesday, Jan 5th, 2011 which showed an increase of 297,000 jobs created between November and December. Economist believe employment must grow by 150,000 jobs to keep up with population growth. However, most models have fixed labor participation rates.

v2

A bad jobs report for November; unemployment rate is 9.8%

On Friday, December 3rd, 2010, the Bureau of Labor Statistics reported that the rate of unemployment was 9.8% of the total labor pool. There were bad unemployment signs across the board.

Non-farm payrolls were almost unchanged adding only 39,000. Unemployment rates for many major population groups increased for adult men, adult women, whites and Hispanics. The Black unemployment rate was 16.0%.

The number of long-term unemployed (6 months or longer) was 6.3 million. The number of marginally attached workers (people who looked for a job in the last 12 months but are not currently working) was reported at 2.5 million up from 2.3 million a year ago.

U-3 Unemployment Rate




U-6 People who want full-time work plus people working part time who want full-time.




In the establishment data categories, non farm payrolls increased by 39,000. Private firms added 50,000 jobs while government cut 11,000. Temporary help and healthcare added jobs while retail shed 28,000 positions. Manufacturing dropped 13,000 jobs. The average work week remained unchanged. Average earning increased by 1 cent.

The only positive item was the upward revision of the September and October Non-farm payroll numbers.

The misery rate, or the percent of the labor force who want work and cannot find it, grew to 17.0 . This is about 1/6 of the people in the labor force.


The jobs "deficit" is an incredible 8 million jobs lost since the start of the recession. Worse, job growth is flat for the past 5 months, with the growth rebound stopping in May.



Job growth has been flat on average since May 2010.



The Black unemployment rate was 16.0%.

This chart is always incredibly sad. This chart is the "real" black underemployment reate. If you take the trend for people who want work and cannot get it plus the black unemployment rate you get "real" underemployment rate: about 25%.



Another view of same data.




In related (unrelated ?) news, based on the unemployment report, the Dow-Jones index moved up 20 points, the NASDAQ closed higher by 12 points, and the S&P moved 3 points higher. The rise of the indexes shows the increasing separation of the jobs and unemployment issue from world of investments and corporations.

Finally, the consensus forecast from economists predicted a rise of 130,000 jobs for the month. Not even close to the actual rate of 39,000.