Thursday, July 26, 2012

Where We Are: Employment

From the Beige Book:
Employment levels grew at a tepid pace for most Districts since the last report. The Boston, Cleveland, Atlanta, Chicago, and Dallas Districts said employment levels were flat to up slightly, with most contacts citing U.S. fiscal policy uncertainty or weak demand for their conservative approach to hiring. Kansas City said employers were reluctant to increase wages or hire full-time staff until economic uncertainty diminishes. A Richmond District employment agency contact noted an increase in temporary employment turning into permanent positions since the last report. The Atlanta District noted some smaller chain stores with low price points were expanding and hiring at a significant pace. Several Districts noted that employers were having difficulty filling highly skilled positions
From Ben's Testimony:
Conditions in the labor market improved during the latter part of 2011 and early this year, with the unemployment rate falling about a percentage point over that period. However, after running at nearly 200,000 per month during the fourth and first quarters, the average increase in payroll employment shrank to 75,000 per month during the second quarter. Issues related to seasonal adjustment and the unusually warm weather this past winter can account for a part, but only a part, of this loss of momentum in job creation. At the same time, the jobless rate has recently leveled out at just over 8 percent.
There really is little more to say about the US employment situation, except to say it's terrible.  However, let's look at the data to get a clear picture.

The top two charts show the 4-week average of initial unemployment claims.  The top chart places this number into historical perspective.  Overall, the series isn't too bad, but it certainly could be better.  However, the middle chart shows that this data series is -- instead of dropping sharply -- is actually meandering lower.  This, in turn leads to a chart of the overall unemployment rate, which is still stubbornly and persistently high 4 years into a recovery.

The above chart shows the median weeks unemployed.  While this number has moved lower over the last few weeks, it is still far too high by historical standards and has remained incredibly high for the duration of the recovery.

The above four charts are a great data series; the percent of the unemployed who have been unemployed and for what period of time.  The real crime in these charts is the lowest chart, which shows that over 40% of the unemployed have been that way for over 27 weeks.  In addition, there has been little, meaningful movement in this number.  Also note that in the top numbers, we've seen a little spike up over the last few weeks -- not a healthy development, as it indicates more people are entering the ranks of the unemployed.

Finally, in breaking the jobs market down into the government, manufacturing and service sector, we see that government job losses are by far the primary reason for the weak unemployment picture.

What more can anyone say that hasn't already been said about employment?  It's terrible and needs improvement.  Of course, note that Congress has done absolutely nothing to improve this picture.