Employment report
While the employment report was weak, it was among the best we have seen this cycle. Nonfarm payroll employment rose by 151,000 and the unemployment rate was unchanged at 9.6%. Compared to the historic norm in earlier recoveries this employment gain was very weak, but compared to the same point in the last two jobless recoveries is was OK. Despite all the noise about uncertainty, employment growth is better than it was in the last cycle.
16 months from the end of the recession the index of payroll employment is down 0.1% as compared to a 0.8% drop at the same point in the last cycle. So if uncertainty is causing firms not to increase employment this cycle, what caused firms to not expand hiring the last cycle? It look to me like the change in the cycle commonly called the “great moderation” has caused a massive structural change in recoveries, not some political development.
The index of aggregrate hours worked increased 0.4% because both employment increased and the average work week expanded by 0.1%. This was the largest increase in hours worked since April. The smoothed, compound growth rate is now 2.4% versus 1.5% last cycle. This implies that the fourth quarter real GDP report could show stronger growth than last quarter.
Average hourly earnings and average weekly wages also improved this month so that last months actual decline in nominal personal income is unlikely to be repeated.
More significantly, average hourly earnings growth is showing signs of bottoming as the three month growth rate of 2.2% is now higher than the year over year gain of 1.7% over the last two months.
A number of Street economists have revised their Q4 GDP forecasts upward this week, at least one today on the strength of the jobs report. The revision to prior months payroll data was +100k, so in a sense we had 2 months of moderately better job gains in one report.
Retail is odd. A bunch of retailers have said they will do “just in time” temp hiring instead of seasonal hiring through this year’s holidays, but this was the best October for retail hiring in a very long time.
Here is my indepth analysis of the report, a bit on the long side, but fairly comprehensive
http://www.zacks.com/stock/news/42842/Employment+Report+in+Depth%2C+pt.+1
http://www.zacks.com/stock/news/42845/Employment+Report+In+Depth%2C+pt.+2
Hi Spencer:
Still the worst of the worst! What is the liklihood of ever returning to a Participation Rate of 66.7%. No economist has discussed a return to such a level which was experienced immediately after the 2001 recession and is probabaly the hallmark of the Bush administration’s jobless and economic recovery policies.
A return to Clinton-era participation rates is (even) less likely than a return to Clinton/LBJ unemployment rates: baby boomer retirements are just beginning.
Graph #1 is informative. How can the US consumer continue to ignore what is going on.
The US jobs have structurally migrated to the mercantilist nations. Mercantilism is an extremely good game plan when the “mark” is deluded about what is going on.
We can’t even float a stimulus program because the “leakage” to the developing nations and the multi-national corporations is so severe that domestic jobs growth remains flat. There is a large hole in the balloon.
There are various forms of warfare, including physical and economic. This is an economic war. Like the Bush tax cuts, as long as we continue the charade that the US is better off by importing deflation from the third world, we will reap the consequences of a deflating standard of living, the lowest common denominator.
Go ahead and buy that foreign made vehicle. Just don’t call yourself a patriot because you are putting other Americans out of work, increasing the budget deficit, and bringing your country to it’s knees. Let’s default on Social Security and Medicare, but not for the ones currently recieving it. (The ones that paid the least into it). It must be government’s fault.
Sheesh,
“A number of Street economists have revised their Q4 GDP forecasts upward this week, at least one today on the strength of the jobs report.“
Name a few of them. A google search didn’t indicate that.
“A number of Street economists have revised their Q4 GDP forecasts upward this week, at least one today on the strength of the jobs report.”
Name a few of them. A google search didn’t indicate that.
It’s interesting that the employment report post didn’t draw many comments.
Perhaps it would help if the employment and unemployment report links were included in the main post.
I have had many discussions with others today about the latest two reports. No point in going into that here if there is no interest in the details by the AB readership. First, the links should be available for the readers. And we’re not seeing that.
Not a Clinton level of employment which was substantially higher. October/November 2001 is beyond the Clinton Presidency and is the low point of the Recession. In most recoveries, the level of population participating in the Civilian Labor begins to increase. This time it started a descend which we are still experiencing today and which makes U3 numerics misleading as a measurement of true unemployment.
MG:
Unemployment has been sliced and diced umpteen different ways since 2001 which has been the start of this particular decline. Not sure how you could explain it any differently. The charts shown are readily available . . . Dirk shows them, Calculated Risk uses similar ones . . . its a “so what” in terms of links.
An interesting point would be as I stated, “what growth would have to be seen to return the Civilian Labor Force to what it was immediately after the 2001 Recession which was the starting point of this decline.
The ~150,000 jobs added is a positive as well as the moderation of state and local gov lay offs.
MG — I choose to report that 4 + 3 = 7.
If you want to report that 7 + 8 = 15, go ahead.
I have a style that I have followed since I was first writing for
LBJ many years ago. He would not read anything longer than
one page or three paragraphs long.
So that is my style, reporting the key points and conclusions
that I consider most important in a very short report.
If you have trouble with that style you are perfectly free
to go elsewhere. If you think there is something wrong with
what I have to say, point it out and I will pay attention to
what you have to say. But if you are criticizing me because
I did not write a 10 page report making the minor points
you seem to think are important, get your own blog.