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October 25, 2013

Jobs Report – Late and Lousy.

October 25, 2013

Jobs Report – Late and Lousy.

Inside the BLS Employment Situation Report

This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which includes the 12th of the month.

Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.

– Nominal Nonfarm jobs was +148,000. (E). The two previous months’ gains were revised to +193,000 (August) and +89,000 (July). Those had been +169,000 (August) and +104,000 (July.) That is a loss (for July and August) of +9,000 from the previous report making the net gain of +147,000 in jobs since the last report.

– the size of the civilian noninstitutional adult population increased by 209,000 in September to 246,168,000 (H). With a labor participation rate of 63.2% 132,000 more jobs were necessary to keep pace with population growth. We had 15,000 fewer jobs added than that including the changes from July and August. (H) The Employment/Population remained at 58.6%.

The Labor Participation Rate was steady at 63.2%. It was 63.6% a year ago.

The civilian noninstitutional population is 2,396,000 (H) more than 12 months ago. With a labor participation rate of 63.2% we require 1,514,000 more jobs in the past 12 months to keep pace with population growth. We had 1,329,000 (H) more folks working. The decrease in real (population adjusted) jobs in the past year is 185,000.

– Real (population adjusted) job loss in September was -15,000. This accounts for the changes for July and August. – the Unemployment Rate was 7.235% down from 7.278% in August 2013(B). – Average hourly earnings was $24.09 up from $24.06 in August 2013 (E) – Average work week was 34.5 hours unchanged from 34.5 hours August 2013 (E) – Private jobs were +126,000. Government jobs were +22,000 (E)

-Good producing jobs were +26,000. The two previous months were revised to +18,000 and -12,000 (E)

-The size of the civilian labor force rose from 155,486,000 to 155,559,000 an increase 73,000. (H)

-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) was flat at 63.2.%. It was 63.6% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention. It is this 63.2% of the adult noninstitutionalized population who get pay checks and contribute to GDP.

 

According to the 4 week moving average of Initial Jobless Claims from 10/3, 1,220,000 people lost their jobs in the prior 4 weeks. That normalizes to 1,321,700 lost jobs in a calendar month (there are about 13 4-week periods in a 12 month year.) This is down from the previous month’s 1,423,500 jobs lost/month.

In September 2013 BLS measured 4 sets of people entering or leaving the jobs market:

– Job losers and persons who completed temporary jobs was 5,844,000 down 126,000 from previous month’s Job Losers and down 645,000 from September 2012. (H)

– Job leavers was 989,000. This includes anyone who retired or voluntarily left working. This up 96,000 from previous month and up 27,000 from September 2012. (H)

-Reentrants was 3,181,000. Reentrants are previously employed people who were looking for a job and found one. This was +52,000 from the previous month and -132,000 from September 2012.(H)

-New entrants were 1,222,000. These are people who never worked before and who are entering the labor force for the first time. This was -77,000 from previous month and -132,000 from September 2012.

One line in the BLS Report is termed “people employed part-time for economic reasons.” These are people who want to work full time but their employer, for whatever reason, decide to employ them only part-time. In this month’s report there were 15,000 more people working part-time. This is a negative from the previous month when there was a drop of more than 300,000 in part-time jobs. We may be returning again to the “most of the increase in jobs is part time” headache.

The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:

– 147,000 more people are working.

– 73,000 more people are in the civilian labor force

The unemployment rate decreased 0.053%. We are -185,000 real (population adjusted) jobs for the past 12 months.

This is another disappointing report.

20,800 of the new jobs were in retail. 20,200 were temporary jobs. The unemployment rate for people with less than a high school diploma dropped 1.0% to 10.3%. Manufacturing jobs were +2,000. This is a profile of jobs gain at the bottom end.

There has been a significant change in the jobs market. Many jobs including manufacturing jobs require technical skills and a college degree. The very large increases in the cost of college education are making education less affordable as it becomes more necessary. The people graduating from college do not have the right skills for the tech-oriented jobs which are out there. We are producing (to oversimplify) too few engineers. The jobs being added are low paying jobs. Some of the problem is with our education system. It has gotten much more expensive while the value (in terms of ability to get a decent job) has decreased.