The monthly employment report roughly showed the economy to be still stagnated as the trends that have been in place so far this year continued. Private payrolls increased modestly by some 67,000 jobs. But the drop in census temporary employment caused total nonfarm payroll employment to fall 54,000.
The year over year gain in jobs as reported by both the payroll and the household survey is now near zero.
The unemployment rate at 9.6% was essentially unchanged and has remained in a range of
9.5% to 9.7% for several months.
The average workweek was unchanged so hours worked increased 0.3% from 99.2 to 99.5. On a smoothed basis the three month growth rate of hours worked slipped to 1.4% versus the recent peak of a 3.7% growth rate in June.
Average hourly earnings growth continued to moderate and average weekly earnings actually ticked down this month. With energy prices and overall inflation weakening this low level of wage growth is generating some modest gains in real earnings. As of last month the year over gain in real average hourly earnings of production and non supervisory
employees was 0.7% and real weekly wage were up 1.6%. While encouraging, by historical norms this is very weak for the first year of a recovery.
Teh jobs report was better than expected, but worse than what we need. That is the short summary. Here is my full analysis for those who are interested.
between the two of them its pretty long, but I think it is about the most comprehsive analysis around.
“the inventory adjustement GM was doing did not generate orders in July and August” = building to inventory goals does not create demand for product, it only puts the product on the shelf in the hope it is sold. Both Chrysler and GM are doing this and I assume Ford is also. Chrysler was off a week and some plants 2 weeks. Automotive still builds to a flawed push demand forecast rather than a demand pull reality. It will be interesting to see what automotive does once it reaches inventory goals.
Chrysler has huge forecast increases for 1st quarter 2011, mostly on All Terrain Grand Cherokee. Electronics companies still have 26-30 week lead times on mosfets, caps, and other electronic components. Vishay, Fairchild, ST, NXP have not added capacity to meet the surge in demand and have justed lengthened the lead times forcing people to get into line for their product. They expect the market to collapse next year. Chrysler, GM, and Ford pull heavily from the companies as well as the tier ones. These same companies also expected a collapse this last quarter and again in 4th quarter. I suspect it will be somewhere in between or a return to normalcy; however, Chrysler must meet certain manufacturing goals in order to maintain its loans.
It is a nice summation of what has happened since 2000. Spencer, Laurent Guerby, PGL, myself, and others have touched upon the relationship between Participation Rate and U3 numerics. The impact on the 25-54 age group of men has been rather dramatic as Laurent Guerby shows here: http://guerby.org/images/bls-men-25-54-200912.png “Dec 2009.”
I do not believe she has reconstructed it; but and since men traditionally are manufacturing, construction, etc. oriented, I suspect it has not declined by much. This would be more of the stuctural issues faced by the population today. The other issue is job creation as it has not reached the levels to match population growth going into the Civilian Labor Force and also reduce Not In Labor Force (~5 million people sitting here). While you cite 67.3% as the high water mark for Participation Rate, this numeric has been accused of being to high because the irrational exurberance of the economy then. Perhaps a better mark to compare to would be the 66.7 or 66.8% achieved immediatelt after the recession or a similar marker from before the high of 67.3%.
In any case Particpation Rate is down 2% and has been on a downward trend since October 2001. This does not bode well for tax revenues or the nation’s costs