January 4, 2013

Population Adjusted Jobs Growth Totals 14,000 for past 12 Months

January 4, 2013

Population Adjusted Jobs Growth Totals 14,000 for past 12 Months

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 included 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 +155,000. (E). The two previous months’ gains were revised to +161,000 (November) and +137,000 (October). Those had been 141,000 and 138,000. That is a gain of 19,000 from the previous report making the net gain in jobs since the last report 174,000.
– Real (population adjusted) job growth in December was 43,000.
– the Unemployment Rate was 7.849% up from 7.775% in November 2012 (B)
– Average hourly earnings was $23.76 up from $23.63 in November 2012 (E)
– Average work week was 34.5 hours up from 34.4 hours in November 2012 (E)
– Private jobs were +168,000. Government jobs were -13,000 (E)

-Good producing jobs were +59,000. The two previous months were revised to -1,000 and -+26,000. (E)

-The size of the civilian labor force rose from 155,319,000 to 155,511,000 an increase of 350,000. (H)

The month to month migration of folks surveyed in the Household Survey into and out of the labor force has caused the unemployment rate to move about as much as jobs growth has making it more difficult to asses the employment situation.

-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) was flat at 63.6%. It was 64.0% a year ago. (H) This, not the unemployment rate, is the number which should get everyone’s attention.

– the size of the civilian noninstitutional adult population increased by 176,000 in December to 244,350,000 (H). With a labor participation rate of 63.6% 111,900 more jobs were necessary to keep pace with population growth. We had 43,000 more jobs added than that. (H) The Employment/Population ratio was 58.6% a decrease of 0.1% in the past month.

The civilian noninstitutional population is 3,766,000 (H) more that 12 months ago. With a labor participation rate of 63.6% we require 2,395,000 more jobs in the past 12 months to keep pace with population growth. We had 2,409,000 more folks working. The increase in real (population adjusted) jobs in the past year is 14,000.

99.44% of the gain in jobs in the last year is attributable to population growth.

According to the 4 week moving average of Initial Jobless Claims, 1,440,000 people lost their jobs in the last 4 weeks. That normalizes to 1,560,000 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 1,632,000 jobs lost/month.

In December 2012 BLS measured 4 sets of people entering or leaving the jobs market:

– Job losers and persons who completed temporary jobs was 6,408,000 down 21,000 from November’s Job Losers and down 1,079,000 from December 2011. (H)

– Job leavers was 983,000. This includes anyone who retired or voluntarily left working. This up 57,000 from previous month and up 40,000 from December 2011. (H)

-Reentrants was 3,587,000. Reentrants are previously employed people who were looking for a job and found one. This was +262,000 from previous month and +228,000 from December 2011.(H)

-New entrants were 1,291,000. These are people who never worked before and who are entering the labor force for the first time. This was -35,000 from previous month and +5,000 from December 2011.

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

– 155,000 more people are working

– 176,000 fewer people are in the civilian labor force

– 21,000 fewer people lost their jobs

– 57,000 more people left their jobs

– 262,000 more reentrants obtained jobs.

Real jobs growth remains anemic. The health of the economy is best measured by the percentage of the adult noninstitutionalized civilian population who are working.

I want to thank all of the folks who have sent positive message about my continued look inside the Jobs Report. Like most economic topics discussed in the media the picture is vastly more complex than 2 numbers.

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