Relevant and even prescient commentary on news, politics and the economy.

December JOLTS report continues the trend of confusing jobs data

December JOLTS report continues the trend of confusing jobs data

The December JOLTS report came out this morning, and it continues the streak of confusing employment data.

To recapitulate, the JOLTS report decomposes the jobs numbers into openings, hires, quits, layoffs and discharges, and total separations. Since the series is only 20 years old,  however, it only covers one full business cycle, so is of limited forecasting use.

The order in which the JOLTS series peaked during the 2000s expansion was as follows:

  • Hires peaked first, from December 2004 through September 2005
  • Quits peaked next, in September 2005
  • Layoffs and Discharges peaked next, from October 2005 through September 2006
  • Openings peaked last, in April 2007

I’ll treat these in that order, below.

So to start, here are YoY hires (blue, left scale) and quits (turquoise, right scale) for the entirety of the series:<

For the last nine months, hires have formed what in the stock market would be called a “pennant” pattern of lower highs and higher lows, i.e., the range is compressing and could break out in either direction.

Comments (1) | |

Why I expect further declines in manufacturing jobs

Why I expect further declines in manufacturing jobs

This is the week I highlight further information from last Friday’s jobs report.

One thing that struck me is that we’ve now had two months of declines in manufacturing jobs. This is something I have been anticipating since about the middle of last year, because the manufacturing work week had been declining significantly, and it has a reliable 80+ year history of leading manufacturing jobs. Here’s the entire history measured as YoY% changes:

The manufacturing work week is down -1.4% YoY. So in the next two graphs I’ve added +1.4% to that number so that it is exactly equal to the zero line. Here is that data split up into two 40 year intervals:

 

Comments (1) | |

Live-blogging the Fifteenth Amendment: February 8 – 9, 1869

Live-blogging the Fifteenth Amendment: February 8 – 9, 1869

Note: I fell a little behind on this project. I hope to be fully up to date by the end of this weekend.

On February 8 and 9, 1869, the Senate did something I daresay it would never consider now: it pulled an all-nighter! Despite numerous requests to adjourn, the session ran nearly 24 hours straight, only ending at about 11:30 AM on the 9th (and picked up again at 1 pm).

The text goes on for close to 100 pages, so I can only hope to hit a few highlights here. Numerous subjects were addressed.

Several members, e.g., Sen. Hendricks again posited that the Congress did not have authority even to amend the Constitution if it impinged on the ability of States to pass laws with regard to suffrage:

There is a particular proposition in the Constitution of the United States that it may be amended. Where … does the power of amendment stop? I say the power of amendment is limited to the correction of defects that might appear in the practical operations of the Government; but the power of amendment does not carry with it the power to destroy one form of overnment and establish another.

This was a small minority opinion, which was quite sensibly met with the Supremacy Clause. For example, here is Sen. Freylinghuysen:

Comments (0) | |

January jobs report: why I am discounting the headline strong jobs number

January jobs report: why I am discounting the headline strong jobs number

HEADLINES:
  • +225,000 jobs added
  • U3 unemployment rate up +0.1% to 3.6%
  • U6 underemployment rate up +0.2% from 6.7% to 6.9%

Leading employment indicators of a slowdown or recession

 

I am highlighting these because many leading indicators overall have strongly suggested that an employment slowdown is here. The following more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were mixed to slightly negative:

  • the average manufacturing workweek was unchanged  at 40.4 hours. This is one of the 10 components of the LEI.
  • Manufacturing jobs declined by -12,000. Manufacturing gained only 26,000 jobs in the past 12 months.
  • construction jobs rose by 44,000. In the past 12 months construction jobs are up 142,000, a deceleration from 207,000 in 2018. Residential construction jobs, which are even more leading, rose by 2400.
  • temporary jobs declined by -1500. Last months initial +6400 was revised downward to +5900..
  • the number of people unemployed for 5 weeks or less declined by -6,000 from 2,065,000 to 2,059,000.
Wages and participation rates

Here are the headlines on wages and the broader measures of underemployment:

Comments (2) | |

Jobless claims continue to show a healthy economy

Jobless claims continue to show a healthy economy

I’ll keep this brief. This morning’s weekly report on initial jobless claims continues to show no danger of any imminent downturn.

The weekly number was 202,000, close to its 50 year lows last year. The 4 week average was 211,750, also close to its recent 50 year lows. Below are the monthly (blue) and moving 4 week averages (red):

Figure 1

Comments (1) | |

Live-blogging the Fifteenth Amendment: January 29, 1869 (3)

Live-blogging the Fifteenth Amendment: January 29, 1869 (3)

Later in the evening debate, Representatives Boutwell (who supported the narrow 15th Amendment language) and Shellabarger (Republican from Ohio) (who supported broader “right to vote” language similar to that espoused by Bingham) had the following exchange on the issue of State voter registration laws:

Boutwell [discussing the narrow non-discrimination based on race proposal]: I am not sure that it will not go so far as to put it out of the power of States to establish a registration law. It certainly does abolish those qualifications in some States which require the voter to pay a small capitation tax …. I think that by arraying against this proposition all the peculiarities of the different States we put the proposition itself in danger. I think it better, therefore, as a matter of practical wisdom, to address ourselves exclusively to those great evils which have existed [already].
….
Shellabarger: [T]he [braoder, right-to-vote] proposition which I submit is not amenable to the objection … that by it the States would be deprived of the power of passing registration or election laws. Plainly that cannot be so. The Constitution itself in express terms provides that ‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to the people.’

Comments (0) | |

The Philly Fed state-by-state diffusion index of economic expansion

The Philly Fed state-by-state diffusion index of economic expansion

This comes from the Philly Fed’s state-by-state coincident index, via Bill McBride. The graph below shows the number of states showing increasing economic activity:

In December the number of states in expansion was 39. Historically over the past 40 years, that number dropping to 35 or below has (with the exception of one month in 1986) been the marker of the onset of a recession.

Note the number is below the lowest level from 2015-16, in which weakness was generally confined to the Oil patch. It is yet another marker of a slowdown, but not of a recession.

Later this morning we’ll get the January ISM manufacturing report, and over the next 48 hours we’ll get reports on January auto and truck sales. Both of these will help tell us if the weakness in the production sector has been spreading or not.

Comments (3) | |

Live-blogging Congressional power to ensure fair federal elections: January 28, 1869

Live-blogging Congressional power to ensure fair federal elections: January 28, 1869

As I described in my earlier post today, the power of Congress to determine the manner in which Congressional elections are to be conducted, including power over the districting process, came up in a speech by Rep. Stewart on January 28, 1869. Since this is of critical importance as to Congress’s ability to prohibit gerrymandering of at least Federal elections, below are selections from another important speech.

James B. Beck, Democrat from Kentucky, discussing the proposed Civil Rights Act, addressed the issue of Congress having the power to set the “time, place, and manner” of voting for Representatives. After declaiming at length about the States having the right to determine who formed their electorate, and to determine the times, places, and manner for elections to the State legislatures, he turned to the issue of elections for the US Congress:

Comments Off on Live-blogging Congressional power to ensure fair federal elections: January 28, 1869 | |

Live-blogging the Fifteenth Amendment: January 28, 1869

Live-blogging the Fifteenth Amendment: January 28, 1869

Note: I have fallen a little behind, due to traveling. My apologies! I am making a concerted effort to catch up. Today’s installment is particularly important on the issue of gerrymandering.

On January 28, Rep. Charles Stewart, a Republican from New York, spoke with reference to the proposed Amendment that had been voted out of the Judiciary Committee, which had been amended from:

No State shall deny or abridge the right of its citizens to vote, and hold office, on account of race, color, or previous condition of servitude.

to read:

The right of citizens of the United States to vote, and hold office, shall not be denied or abridged by the United States or any State on account of race, color, or previous condition of servitude.

Here is a brief excerpt from his speech:

Comments Off on Live-blogging the Fifteenth Amendment: January 28, 1869 | |

December 2019 real personal income and spending

December 2019 real personal income and spending

Real personal income and spending are both coincident indicators. They don’t tell us where the economy is going, but they do give us a snapshot of how ordinary Americans are doing.

In December, real income declined by less than -0.1%. Real spending rose by less than +0.1%:

Figure 1

Real personal spending excluding government transfer payments is one of the four indicators used by the NBER to determine if the economy is in recession or not. In December this was flat. Overall in 2019 there was a slow uptrend:

Comments (1) | |