unemployment
The best summary is here:
“This was an OK report; a little better than most recent reports, but still a long ways to go.
If we average the last three months together that gives about 160,000 payroll jobs per month. That is more than enough to keep up with the growth in the labor force, but it will only push the unemployment rate down slowly. Private payrolls were a little better at an average of 188,000 per month, as state and local governments continued to lay off workers (something we expect all year).
The decline in the unemployment rate from 8.9% to 8.8%, was good news, especially since the participation rate was unchanged at 64.2%. Note: This is the percentage of the working age population in the labor force.
However the increases for the long term unemployed, and for the number of part time workers for economic reasons, was not welcome news – although U-6 declined to 15.7%. All of these levels are very high.
The average workweek declined slightly to 34.1 hours, and average hourly earnings was flat. Both very disappointing. http://www.calculatedriskblog.com/
Average figures are deceiving:
Food stamps at an all time high:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM ( Data as of March 31, 2011) Fiscal PARTICIPATION BENEFIT AVERAGE MONTHLY BENEFIT Year Persons Households COSTS Per Person Per Household ANNUAL SUMMARY FY 2011 43,766,713 20,501,213 23,348,337,586 133.37 284.73 FY 2010 40,301,666 18,618,363 64,704,748,421 133.79 289.61 FY 2009 33,489,975 15,232,115 50,359,917,015 125.31 275.51
http://www.fns.usda.gov/pd/34SNAPmonthly.htm
The U.S. economy is producing jobs, that much is clear. But whether those jobs are good jobs is less certain. Of the 230,000 private-sector jobs created in March, 199,000 of those were in the service sector. A large chunk of those jobs are in fields that are likely to provide a stable livelihood for those lucky enough to snag them – like some of the 78,000 added in professional and business services. But that’s less certain for, say, the 37,000 new workers in the leisure and hospitality industry.
To be sure, having a job is better than not having one, both for the individual and for economic output. But this recovery seems to be going hand-in-hand with workers taking lower-paying jobs. More than half of those full-time workers who lost jobs between 2007 and 2009 and then found full-time work by early last year said their new jobs came with lower wages. Some 36% saw a pay cut of 20% or more.
That can be good news for companies, who are able to keep their labor costs low and hire talented workers, which can increase productivity. The flipside: it can downshift Americans’ spending and their standard of living.
Academics have pointed out that, as jobs are coming back, they’re returning at the highest and the lowest levels. But the middle-class is being squeezed.
That’s evident in the wages numbers in today’s jobs report. Average hourly earnings for private non-farm payrolls were flat at $22.87 in March, in part because temporary hiring and leisure jobs – both low-paying sectors — made up such a large share of the jobs added, David Greenlaw, a Morgan Stanley analyst points out.
As Americans return to the labor force, more could end up in positions like the 17,700 added in retail trade in March. Such jobs not only tend to come with lower pay, but they are also less likely to offer health benefits or retirement plans that provide an added layer of economic stability. http://blogs.wsj.com/economics/2011/04/01/more-jobs-doesnt-necessarily-mean-more-good-jobs/
The employment-population ratio still is terrible.
The Anatomy of Slow Recovery: Between 1950 and 1990 – the days of old-fashioned inflation-fighting downturns engineered by the United States Federal Reserve – America’s post-recession unemployment rate would fall on average 32.4% over the course of a year from its initial value toward its natural rate. If the US unemployment rate had started to follow such a path after peaking in the second half of 2009, it would now stand at 8.3%, rather than 8.9%. Unfortunately, none of the net reduction in the US unemployment rate over the past year came from increases in the employment-to-population ratio; all of it came from declining labor-force participation. Unemployment has fallen from 10.1% over the course of the past 18 months, but the employment-to-population ratio has remained stuck at 58.4% http://delong.typepad.com/sdj/
the length of time the typical unemployed person has been out of work has been getting longer and longer. And in March, the duration of unemployment again rose, to an average of 39 weeks:
Source: Bureau of Labor Statistics
That’s the longest on record, even when you account for the fact that the Labor Department changed its methodology for calculating average unemployment duration at the start of this year. (The numbers produced by the department’s old methodology are shown in very light blue in the chart above; as you can see, they’re still higher than they were at any previous month on record.)
So what accounts for the interminable length of unemployment?
Layoffs during the Great Recession were unusually concentrated. Whereas in previous recessions a large swatch of American workers churned in and out of unemployment, this time around the ax fell on relatively few Americans. And as the economy has marched onward, this smaller group of workers has been left further and further behind.
Some of those people had been structurally displaced — that is, they were in occupations or industries that were disappearing more permanently, or they were less productive workers to begin with — and that’s why it’s so hard for them to get new work. But for many Americans, unemployment begets unemployment. The longer a person is out of work, the less likely he is to find new work in the coming few weeks, whether because of stigma, less intensive searching, skill deterioration or other factors.
So while American employers have picked up hiring, they are disproportionately hiring workers who have spent less time looking for a job. That leaves more of the long-term unemployed in the jobless pool — right now nearly half of those unemployed have been unemployed for at least six months — with each of those individual workers racking up even more weeks. The net effect is to pull up the overall average length of unemployment.
Here’s a chart showing the breakdown of unemployed workers, by how long they have been looking for work:
Source: Bureau of Labor Statistics, via Haver Analytics
http://economix.blogs.nytimes.com/2011/04/01/average-length-of-unemployment-rises-again/
The unemployment rate, meanwhile, edged lower, to 8.8%, its fourth straight drop. It has now fallen a full percentage point since November. That’s a surprisingly fast drop, given the unimpressive pace of concurrent GDP growth of about 2% to 3% annualised. Two factors can explain the unusually rapid decline in unemployment. One is that the household survey used to calculate the unemployment rate shows much more rapid employment growth since November (1.4m) than the separate survey of establishments that yields payroll employment (630,000). Exactly why is a mystery.
The second reason for the rapid drop in unemployment is that the number of people either working or looking for work (the labour force) has not grown since November, which is a surprise: typically, you’d expect that the return of discouraged workers to the job hunt would buoy the ranks of the officially unemployed. The fact that it has not is, counterintuitively, a bad sign. March did provide a faint signal of improvement as the labour force grew 160,000. However, that’s only about as fast as the working-age population grew. The participation rate, the share of the working-age population in the labour force, remained stuck at 64.2%, the lowest since 1984. Economists keep expecting participation to rebound, which is one reason they were anticipating a higher, not lower, unemployment rate. The fact that participation refuses to rise is a troubling sign.
Manufacturing employment grew for the fifth straight month, continuing the factory sector’s encouraging rebound. Construction employment was flat, which isn’t a surprise, and temporary employment, considered a leading indicator of permanent hiring, rose.
This report is solidly positive for the economy: bit by bit the pieces of recovery are falling into place. No doubt, it will reinforce expectations that the Federal Reserve should either call an early end to its quantitative-easing programme of bond purchases (now scheduled to end in June), or start raising interest rates soon. That indeed was the message a bevy of hawkish Fed presidents delivered in the past week.
That seems premature, for two reasons. First, other economic data is not as upbeat as employment. Recent reports on durable goods, housing and so on all suggest the economy is growing at just a 2% to 2.5% annual rate in the current quarter, well below the 3.5% to 4% rates that many forecasters were anticipating for the year as a whole. What explains the divergence? For one thing, while employers are hiring more workers, they haven’t added to their hours in recent months. Total hours worked grew at only a 2% annual rate in the first quarter. Another explanation might be that productivity growth has ground to a halt, which is neither surprising, given its rather feeble performance to date, nor bad. Nonetheless, in sum the data point to an economy growing at or slightly above its potential rate, but hardly surging, which is likely to be the pattern for the next several years while deleveraging proceeds apace. If underlying demand remains stubbornly sluggish, because of higher oil prices for example, employment could peter out again, as it did a year ago.
The other reason for caution is pay. Average hourly earnings were flat last month, and are up just 1.7% from a year earlier, half the rate at which they were growing before the recession. Inflation expectations have risen a bit, but there is no sign that workers have been able to leverage their concern about higher food and petrol prices into higher wages. The surge in oil prices is eating into disposable income and being felt in consumer spending.
There may be a case for the Fed to back away from its ultra-easy monetary stance sometime this year; however, it will take many more months of good economic news like today’s. The more dovish, and influential, William Dudley, president of the New York Fed, said as much today. “This is welcome and not a reason to reverse course,” he said. The economy, he noted, is performing much as the Fed expected. “We must not be overly optimistic about the growth outlook.” This recovery’s serial disappointments suggest he’s right.A person with a PhD in physics driving a cab is employed.
The teen unemployment rate rose to 24.5% from 23.9% in February, but is down from 26.0% a year ago. The percentage of teens that actually have a job rose to 25.8% from 25.5% in February, but this is down from 26.5% a year ago.
The unemployment rate for people 20-24, those who are just entering the full-time workforce, was 16.4% — unchanged from last month, and down from 18.2% a year ago. This year-over-year decline is good news. If these people cannot get jobs, they tend to remain living with Mom and Dad. This slows the rate of household formation, and hence the demand for housing. That makes it difficult for the economy to absorb the huge housing inventory overhang. http://www.zacks.com/stock/news/50503/Jobs+Report+In-Depth,+pt.+2
Leo Hindery who I have done battle with in past lives writes:
The monthly BLS announcement regarding unemployment, however, as we note each month:
1. Uses only a “survey of households” rather than much more accurate payroll data;
2. Excludes changes in employment among the nation’s 11.0 million farm and self-employed workers; and
3. Most important, does not take into account the 14.7 million workers who are:
i. “part-time-of-necessity” (i.e., underemployed) because their hours have been cut back or they are unable to find a full-time job (8.4 million);
ii. “marginally attached” to the labor force because while wanting a job, they have not searched for one in the past four weeks because of availability, skill or personal reasons (2.4 million); or
iii. “discouraged” and who have removed themselves from the labor force although they “currently want a job” (3.8 million).
Our Summary of U.S. Real Unemployment [attachment 1] makes these three adjustments. It also identifies average weeks unemployed, job openings, and the all-important “Jobs Gap” that needs to be filled in order to be at full employment in real terms. With the three adjustments made, in March:
· The number of real unemployed workers in all four categories – official BLS, part-time-of-necessity, marginally attached, and discouraged – decreased by 193,000 workers to 28.2 million, which remains more than twice BLS’s official figure of 13.5 million. Significant changes in real employment included: private service-providing sector employment increasing by 199,000 jobs; manufacturing increasing by only 17,000 jobs; construction employment flat after increasing by 37,000 jobs in February; and government employment, mostly local, again declining, this month by 14,000 jobs.
· The real unemployment rate is 17.7%, compared to last month’s real unemployment rate of 17.8% and to BLS’s dramatically lower ‘official’ rate of 8.8%.
· The number of real unemployed workers has increased by 11.5 million since the start of the Recession, and just since December 2008 by 3.7 million. The latter figure and the Jobs Gap figure that follows are of significant political import, since the economy needs to add at least 150,000 new private sector jobs each month simply to keep up with population growth.
· The Jobs Gap, in real terms, is 20.2 million.