The Good and the Bad in 8.6 Percent



Tags: percent, november, unemployment, number, million, employment, unemployed, increased, seasonally, adjusted

The Obama administration got an early Christmas present, a month of great PR saying 8.6 percent unemployment. Republican presidential candidates on the other hand are probably upset about the jobs number—ironically, they probably are hoping for a terrible economy over the next 12 months. But lets dig into the BLS numbers to see what the true positives and negatives are in the employment situation report, because while 8.6 percent unemployment certainly sounds better than 10 percent, it is not all roses.

Summary: Cautiously non-optimistic. I don't think this employment report should be taken as evidence that the jobs market is getting better. What gains we saw were small. And 64 percent of the seasonally adjusted jobs (120,000) added this month were retail (50,000) or leisure sector (22,000) jobs—not exactly building in the most sustainable sectors. Little has been done to change the reality of the structural problems in the American economy.

Headline stats: Good

Unemployment has been between 9 percent and 9.2 percent since April, but for November it fell to 8.6 percent. Why? According to the BLS, "Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. Government employment continued to trend down." In general this is a positive sign. We've seen the weekly unemployment claims falling over the past several weeks (yesterday's 400,000+ claims not withstanding and a bad omen for the future), so this number is not unexpected. It is important, though, that the employment gains come in fields of sustainable work, like health care, and not be temporary hires, like seasonal retail jobs, for this positive trend in unemployment to continue.

Participation Rate: Bad

The number of unemployed persons fell to 13.3 million, which is down about 600,000 from August's near 14 million. And it down significantly from last November's 15 million unemployed. But the labor force participation rate has continued to fall. In November of 2010 it was 64.5 percent and this November it was 64 percent. The total number of people not in the labor force increased from 84.7 million last year to 86.5 million this year, and also increased by 500,000 from last month. According to the household survey there are 350,000 more people that want a job today then there were last November. So the 8.6 percent unemployment stat is likely to be unfelt in many places around the country.

Long-term Unemployed: Neutral

Since the long-term unemployment situation didn't get any worse, this could be perceived as a positive overall. But the numbers are still pretty grim. The number of those without a job for 27 weeks or more fell from 5.8 million to 5.7 million, but increased from 42 percent of the jobless to accounting for 43.0 percent of the unemployed. The biggest upside is that the number of long-term unemployed is down from last November's 6.3 million. The biggest downside is that the average number of weeks unemployed has increased from 33.9 weeks in November 2010 to 40.9 weeks in November 2011. 

Non-farm Payroll: Neutral

The establishment survey indicated the private sector added 140,000 jobs, and the total increase in payrolls was 120,000. This is better than last month's 100,000 gain, but is a little less than the 12-month average gain of 131,000 a month. And that is still way below what is needed for a long-term turn around in unemployment that has a high labor force participation rate. 

Sectors Adding Jobs: Neutral

 

  • Construction jobs fell by 12,000 from October, but were up 18,000 from last November (seasonally adjusted).
  • Manufacturing jobs increased just 2,000 from October, and were up 210,000 from last November (seasonally adjusted).
  • Retail jobs were up nearly 50,000 from October, and up 226,000 from last November (seasonally adjusted). The danger is that the nominal (non-seasonally adjusted) number of jobs added to retail was 400,000 and many of those jobs, primarily added in clothing and general merchandise stores, will go away after the holidays. 
  • Financial sector jobs increased by 8,000 from last October, Professional services jobs were up 33,000, Educational jobs by 8,000, Leisure and hospitality jobs were up 22,000, and Health Care jobs by 19,000. Meanwhile net government jobs declined 20,000, even with the federal government adding 1,500 workers and state education workers increasing by 1,900. 

 

Demographics: Bad

According to the household survey, the jobless rate for men and whites declined to 8.3 percent and 7.6 percent respectively, but the rates for adult women (7.8 percent), teenagers (23.7 percent), blacks (15.5 percent), and Hispanics (11.4 percent) showed little or no change.

Productivity and Compensation: Neutral

 

Revised data for the third quarter of 2011 shows unit labor costs in nonfarm businesses fell 2.5 percent, reflecting the 2.3 percent increase in output per hour combined with a 0.2 percent decline in hourly compensation.

See all employment data from the BLS here.

 

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Crisstina said... Rating: 0   Vote +   Vote -  

Talks, thankfully are sceduelhd today as we face week three of the support staff strike on Monday.All in all, it's been quite an education. More than that, it's been a true chance for many of us to step back and reflect on things that sometimes are too easily forgotten.Was the strike costly? Sure. Individually and collectively, and in many what's work going to be like when we get back' ways, to be sure.But there's a cost to the spirit too a cost that for me was only revealed as important when I realized its absence in my life these last few weeks.This something' is what really drew me, and so many of my like-spirited colleagues to the field of education in the first place. And it's something that can not be contracted out, or put into a spreadsheet or even negotiated. In fact, it's a gift. A gift of spirit. A gift that appears en masse in every school, university, and college every September. A gift that most givers of the gift are not even aware of giving us. But it's this generous and real gift that fills, sustains, and compels us to give back. A gift that reminds us how important it is to show trust, support, kindness, patience in our work and the people we work for and with and us to show as much respect as we can manage under whatever circumstances and whomever we face.The older you get, the more precious the gift becomes. It has the incredible power to transform you from a naggingly cynical, and wrinkling curmudgeon to a wide-eyed and nervous youth again in an eye-blink. It reveals to you the truth that despite the mind-numbing speed of technical change in our lives and in our workplaces, that some things truly are universal and eternal to the human spirit.And that beyond a world corrupt with fear mongers and the fear-mongered, the terrorists and the terrorized, there is another vision. A vision that emerged long, long ago from visionaries who were probably just as wide-eyed and nervous as those faces staring back at you in the halls and classrooms of the first week of September. Somewhere in our collective past we decided to collectively acknowledge the nurturing of public knowledge not as a privilege, but a fundamental and critical human right as basic as shelter and food.In Ontario, 1967, the momentum of this vision and the celebration of our fresh-faced nations first centennial collided and created the community college system. An acknowledgement that investing in developing skills in future minds was not only necessary to sustain a healthy economy, but critical to sustaining a healthy society. This was a time when the whole country was filled with the very same gift that our students continue to shyly present to us, every day hope.Hope that change can be good. Good for oneself, good for all. Hope that the only meaningful growth is NOT economic or profit/tax-based driven but much, much, more personal. A growth of understanding, of connection to others past, present and future. A hope that even a sad story can have a happy ending. A story worth retelling not because it sells TV ads, or newspapers but because it gives to the listener, more hope in the telling.And maybe the most important hope of all, a hope of discovery. That somewhere in all of us students, teachers, support staff, parents, voters, taxpayers and (hopefully) management there remains, somewhere, a hope to live our lives as the best we can be for ourselves, and to give back to this world more hope than we receive. To not settle for complacency, to refuse to accept that we are limited to what others, or other interests, insist we must accept as our fate.January first may officially be the time to celebrate a new year, but there's no doubt in my mind that the time to celebrate a new future is the first day of school and the return to youthful hope to the world.And THAT, is what I missed most this September.Thank you students. The HOPE that you bring to me, my colleagues, our schools, and indeed the world is a true, and generously given gift. A gift that if honestly respected, should not be ignored, squandered, or exploited for any purpose other than the spirit it is given in.There's an old African proverb worth repeating: stay hungry, stay foolish.One can only hope.- College-trained support staffer married to a college-trained library worker (with a daughter in her 2nd year of a college program)

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