Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government.
I had thought that we could continue to see a decline in the number of job losses. However, that obviously did not happen.
CBS Marketwatch summed the report up:
Details of the report were almost universally dismal, with the number of unemployed people rising by 214,000 to 15.1 million. Of those, 5.4 million have been out of work longer than six months, accounting for a record 35.6% of the jobless. The employment participation rate fell to 65.2%.
An alternative gauge of unemployment, which includes discouraged workers and those forced to work part-time, rose to 17% from 16.8%.
Total hours worked in the economy fell by 0.5%. The average workweek fell back to an all-time low of 33 hours. Average hourly earnings rose just 1 cent, or 0.1%, to $18.67. Average hourly earnings are up 2.5% in the past year.
Let's look at a few points from within the report:
Click for a larger image.
The overall trend in the rate of job losses from the beginning of this year is still lower. Also note we had the same situation in June when losses spiked only to move lower the next month.
Secondly,
The rate of job losses in three job categories is near 0. Oddly, the government lost 53,000 workers. That number seems a bit odd during the middle of a stimulus program.
All that being said, this is a clear step in the wrong direction. Considering the rate of job losses at the beginning of the year (600,000+/month) expecting an immaculate recovery is highly unrealistic. However, the bleeding has to stop at some point. So by the end of this year we have to be far lower than today's number for a recovery to be viable. Consumers cannot continue to hear news like this and expect to have a positive attitude about the economy. It's that simple.
7 comments:
I would also note that the employment-population ration dropped again and now stands at 58.8 a level not seen since 1983. This report was bad and is signaling another jobless and lackluster recovery, especially when coupled with the terrible factory orders report that was just released as well (down .8% month over month and 22% year over year).
government job losses are pretty steep right now at the state, county, city levels. The stimulus only has so much help for local governments in cash strapped areas.
"The stimulus only has so much help for local governments in cash strapped areas."
Recall that cutting the level of help for cash-strapped local governments was one of the "victories" in the Stimulus fight for "conservative" Democrats and "moderate" Republicans.
Helping cash-strapped local governments cope with the mismatch between their tax receipts and spending needs during a deep recession was argued to not be stimulusy enough.
From the BLS:
“The preliminary estimate of the benchmark revision indicates a downward adjustment to March 2009 total nonfarm
employment of 824,000 (0.6 percent).”
It was also noted that the average correction has been +/- 0.2%. Further, that the B/D correction was only +34,000 in September; the prior month being +118,000. Your data indicated that the workforce continues to decline even as demographics would suggest a monthly rise of 125,000.
Separately, the CFNAI fell in August, the ISM, as noted, eased slightly and initial claims, as noted, trended up.
Let’s be optimistic and call it a butt bumping fits and starts recovery for now and wait for more data.
Concerning the B/D model and requests for citations to back opinions I submit this.
http://www.bloomberg.com/apps/news?pid=20601068&sid=aGBkhROUjNds
No, I am not an economist my only argument was for the use of common sense in evaluating data. As always I appreciate your posts and the opportunity to discuss differences of opinions.
BruceMcF -- absolutely agreed. It was one of the biggest mistakes of the stimulus compromise, as far as I'm concerned. State and local government cuts are directly counteracting the stimulus that was passed, at least in terms of jobs and demand creation, and the scale of them across the country is huge.
OF
The Bloomberg article highlights something that happens with all government economic reports: revisions. Employment is not the only data that is revised. If memory serves, practically all data is revised at some point at various time increments after the original release.
The point I am making with the B/D model is this: I have yet to see a serious challenge to the model from someone (or better a group of highly qualified someones) saying the whole model is wrong/should be scrapped etc... That's what I'm looking for regarding the the B/D. I see lots of internet chatter from people who don't know anything about statistics. I don't see statisticians/economists etc.... saying they have an issue with it.
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