US Unemployment: Another Good Month

Part of me wants to celebrate what appears to be strong sustained job growth signaling the steady march toward normalcy.  The other part is sobered by the realization that at his pace that march will take many years.  But every journey starts with a single step - or something like that - so I am still in glass half full mode.

The BLS reports today that another 227,000 jobs were created in February while the unemployment rate held steady at 8.3%. Actually both side of this is good news, the jobs numbers are great and at 200+ K we are creating many more jobs than new working age people, and the fact the new job seekers kept the unemployment rate up is good because it likely shows that people are perceiving that the job market is improving and starting to look for work again.

So is is another good month and we are definitely on the path back, plus good news in Europe as the Greek mess looks at least reasonably contained leaves me reasonably optimistic.

But this is the dismal science so here is the sobering graph courtesy of the New York Times which compares job losses in the post war recessions:

Source: New York Times from Bureau of Labor Statistics Data. Chart by Amanda Cox.
Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

Good, Very Good: Almost 250,000 Jobs Added in January

The United States' unemployment rate fell to 8.3% in January, which is nice, but the real news is, of course, the jobs number and there the news was very encouraging - 243,000 jobs were added.  The BLS report also included upward revisions to the November and December numbers as well, adding another 60,000 jobs.  The private sector actually added 257,000 jobs in January but the public sector shed 14,000 jobs.

Last month I was sounding hopeful and got some blowback.  I remain hopeful that we are heading in the right direction and we are slowly, very slowly, gaining some momentum.  If we were able to sustain job numbers like these it would still take three years to get back to five percent unemployment.  But given how bad the economy got, given all of the 'overhang' of foreclosed houses keeping a lid on the housing market and given the banking cataclysm we went through, I think you have to be a realist and understand that it is not all going to get unwound in a few months and take comfort in the clear indication that the economy is now heading in the right direction.

Now let's all hope Europe can figure out its problems and we can all start rowing in the same direction.    

Yes, the Employment Report is Very Good

The report out today from the Bureau of Labor Statistics is excellent.  200,000 net new jobs is not just a good number but a great number.  As a rule of thumb, you need at least 100,000 new jobs a month to keep up with population growth, so double that is great given the economy we are in.  Why do I say great?  Remember that state and local governments are still in crisis mode: severely cutting services, to the tune of 280,000 job losses in 2011.  Thus 200,000 with government on the sidelines is very healthy private sector job growth.

The unemployment rate is less important fundamentally, but important psychologically, and it fell to 8.5%.  In this day and age that qualifies as good news (anyone even remember the days of 4% unemployment?). [That was 2000, by the way, when we last had a annual average unemployment rate of 4% but 2006 and 2007 had 4.6% annual rates]

It is good to keep in mind that this is an ocean liner we need to turn around and start building up speed.  First come private sector employment and consumption, fueled in part by folks starting to make the purchases they have been putting off on things like cars that wear out and where we have seen a strong sales bump recently.  Then with tax revenues increasing governments can stop the bloodletting and even start to restore services.  Investment starts to pick up as the economy gains steam and so forth.  In other words we are still in the early days of a process that will take a few years, but this is how it begins.

The big storm cloud continues to be Europe and the Euro zone.  Let's hope they can prevent crisis there.

US Unemployment Holds at 9.1%

The BLS's August unemployment report is out today and the report makes for some sobering reading.   I am going to quote from the report as it is remarkable:

Nonfarm payroll employment was unchanged (0) in August, and the unemployment
rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today.
Employment in most major industries changed little over the month. Health
care continued to add jobs, and a decline in information employment reflected
a strike. Government employment continued to trend down, despite the return
of workers from a partial government shutdown in Minnesota.

Yes, that is a zero. No new jobs. None. Zilch. This means of course that we are losing ground as we need more than 100,000 a month just to keep up with population growth.  And we are worrying about the deficit right now.  Sigh...

US Unemployment Falls to 9.1% in July

The news that the US economy added 117,000 jobs is welcome indeed. I, for one, was dreading another weak report.  But there was a time when such a number, barely enough to keep up with population growth, would have been a big disappointment.  And in this lies the main problem right now with the US economy - we are not making any forward progress.  To me, discussions of whether there is going to be a double dip recession is misguided, whether we stay at excruciatingly low growth or actually see negative growth is beside the point.  In either case we remain at unacceptably high levels of unemployment and have a significant number of long term unemployed whose unemployment insurance is running out.  Which is why Congress' infatuation with debt and spending in the midst of a historic recession is very very frustrating to me.

But not to be too dismal, there are some very good aspects of the report.  First, it is a huge improvement over the June report which, even at the revised number of 46,000 was simply terrible.  Second, this comes at a time of massive cutbacks in most states so the number is net of all of the public sector job losses which means that the private sector is adding jobs at a reasonably healthy pace.  

For a nice illustration I turn to the New York Times' David Leonhardt who has a couple of nice graphs:

First the decline in government employment:

Next the increase in private sector jobs:

Annual private-sector job growth (blue) vs. population growth (red).

And no, I don't think this has anything to do with crowding out.

US Unemployment Climbs to 9.2% in June on Dismal Job Growth

The BLS reports today that the US economy added only 18,000 jobs in June and the unemployment rate was essentially unchanged at 9.2%.

There is really not much to say other than this is as dismal as it gets.  Energy prices seems to be the main culprit most business economists are citing but I think it has a lot to do with all of the drastic cutting going on in the states.  Just as fiscal stimulus can help bump aggregate demand and stimulate the economy, states cutting back can depress aggregate demand and depress the economy.

Maybe now the folks in Washington can start to focus on jobs again and stop spending all their energy on the debt.  

Update: It turns out David Leonhardt beat me to it - he makes the same point about state austerity.  We have lost about a million jobs due to state and local government cutbacks.

Horrible: The May Jobs Report

The US economy added only 54,000 jobs in May and unemployment is up to 9.1%.  54K is not enough to even keep up with population growth.  In other words we are losing ground not gaining.

More and more do I worry about the lost decade that Krugman has warned of repeatedly.  I have thought him a bit alarmist, but his insistence that the government is not taking this seriously enough and doing too little looks pretty prescient right now.

Let's hope this is true:

The dismal numbers may change the economic debate in Washington and potentially revive calls for the Federal Reserve to engage in another round of asset purchases, Mr. Ashworth said. Democrats and labor-oriented groups have also amplified their pleas for Congress to delay deficit-reduction measures.

“Living here in Washington, in the past few weeks there has been all this talk about deficits and the debt ceiling as though that were the biggest problem right now,” said Heather Boushey, a senior economist at the Center for American Progress, a liberal research organization. “My fervent hope is that this shocks policy makers into realizing the most urgent problem in front of us right now is jobs.”

Some smart analysis from the Economist:

It's not too difficult to spot the sources of economic weakness in the details of the report. Manufacturing employment fell by 5,000 jobs in May after rising steadily in previous months, a testament to the worsening outlook for exports in a weakening global economy. Retail trade employment growth also tumbled, as nervous consumers trimmed spending. America's job woes have also been self-inflicted. Private firms have added over 1.7m jobs in the past 12 months, but the government has shed nearly half a million over the same period (not counting the loss of temporary Census jobs last year). Local governments alone have cut 446,000 positions since September of 2008. Some of those government jobs losses reflect a sensible rationalisation of workforces. Too many of them reflect the damaging effect of pro-cyclical budget cutting due to balanced-budget rules in cash-strapped states. More federal aid to states might have dampened the reductions, easing the drag on national growth.

Budget issues at the federal level may also be contributing to the slowdown. Unexpectedly large federal budget cuts are chipping away at quarterly growth rates with less of a cushion than previously imagined. The 0.5 percentage point drag due to slashed spending seems less problematic when the economy is expected to expand at 4%—as was once hoped for the first half of 2011—than when it's growing at less than 2%, as America's did in the first quarter, and as forecasters are increasingly predicting for the second quarter.

I have, for my part, warned of the problem of 50 states making drastic budget cuts simultaneously and argued for some very quick and VERY easy fiscal stimulus: block grants to the states. Now, I think, we are beginning to see the problem manifest itself. Bad days.

US Unemployment Rises to 9% in April but Job Growth Strong

The BLS has released the April employment numbers and the news is good again - 244,000 new jobs added, all from the private sector (which actually added 268,000 jobs).  The unemployment rate actually edged up to 9% as more job seekers returned to the job market.

This rate of job growth is healthy and strong, but not fantastic and at this rate, as I have mentioned previously, it will take a long time to get back to pre-recession levels of employment.

This graph from the New York Times' Economix Blog is a sobering reminder of this fact:

Source: Bureau of Labor Statistics. Chart by Amanda Cox.Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

Recovery is Solidly Underway but There Remains a Big Hill to Climb

The national unemployment picture is improving with over 200,000 jobs added in March. [Note: this is the last link to the NY Times I provide before the pay wall goes up - I'll try and take that into account in the future]  Yes, the rate didn't budge much and is still high at 8.8%, but this is expected as more and more job seekers return to the job market.    This is also happening at a time when state and local governments are shedding jobs at a brisk pace (15,000 jobs lost) which tempers the recovery but also signal that private sector job gains are good.  Still at this pace it'll be a number of years before we recover fully.  Truly good news would be to break the 300,000 mark for a number of months.  

The NY Times' Economix blog has a nice graph (reproduced above) that shows just how bad the unemployment situation got in historical perspective and how far we still have to climb.

US Unemployment Falls to 9% in January but Job Growth Slow

NY Times Graph

The BLS released its latest monthly report today and the news is mixed.  While unemployment in January fell to 9%, the monthly job growth number (36,000) was terrible.  In general, economists believe the economy need to add well over 100,000 jobs a month just to keep up with work force growth.  Yes, bad weather certainly played a big role in the disappointing jobs number, but even still the number is bad.

So once again we are repeating the same mantra: the economy is recovering but painfully slowly.

US Unemployment: Rate Unchanged in October but...

The US economy added a very surprising 151,000 new jobs in October, much higher than most economists expected.  The rate was unchanged at 9.6% but this is not surprising.  Let's suppose that we can sustain this kind of job growth, many people who have been waiting out the recession will be induced to rejoin the labor force to look for a job.  Thus both the supply of jobs and the demand for the jobs increases.  So, right now, the number you should focus on is the new jobs number.

In fact, the news in even better when you consider that the government sector shed 8,000 jobs so the private sector job growth was 159,000.  This is almost startlingly robust.  Still, there are plenty of bad things to point out: the U6 rate which includes underemployed and discouraged workers is still at 17% and the number of long-term unemployed (for a year or more) keeps increasing rapidly.

One interesting question is whether this suddenly makes QE2 unnecessary and dangerous.  After all the main argument against QE2 is sparking uncontrolled inflation and the core mechanism of stubborn inflation is wages.  But as David Leonhardt points out wages are not keeping pace with productivity gains at the moment, so it is hard to see were inflation is getting traction.

The September Jobs Report: Depressing

The US lost 95,000 jobs in September while the unemployment rate held steady at 9.6%.  There is no other way to say it, this is really awful.  There is no sign of momentum in the economy at all leading to very little doubt now that this is a U shaped recession, so called because of the extended period spent at the bottom.

It is hard to imagine that the Fed will not start to get more aggressive in quantitative easing with the now numerous signs that the economy remains moribund.

The US August Unemployment Report

The US August unemployment report came out today and it shows that nation's unemployment rate essentially holding steady at 9.6% (up from 9.5% in July).  More importantly perhaps it shows that the economy lost another 54,000 jobs.  But there is a silver lining, albeit thin: the private sector actually added 67,000 jobs.  Unfortunately this level of growth is anemic and will not do anything to dent the unemployment rate. So we wallow in the swamp at the bottom of this recession, still looking for something to lift us out.  I suppose the takeaway is that it still looks to me that we are stuck in a U shaped recession rather than a double dip recession.

Unemployment

Since I am otherwise occupied, here is some smart writing on the US jobs report for July.

Catherine Rampell in the NY Times Economix Blog:

The chart above shows job changes in this recession compared with recent ones, with the black line representing the current downturn. The line has ticked upward since last year, but still has a long way to go before the job market fully recovers to its prerecession level. Since the downturn began in December 2007, the economy has shed, on net, about 5.6 percent of its nonfarm payroll jobs. And that doesn’t even account for the fact that the working-age population has continued to grow, meaning that if the economy were healthy we should have more jobs today than we had before the recession.

David Leonhardt, in the NY Times Economix Blog:

This morning’s jobs report is not easy to decipher. All in all, it suggests that economic growth remained slow in July, but it also offered a reason to hope the economy might be on the verge of picking up speed again.

The most important indicator was private-sector employment. (Overall employment fell, by 131,000, because so many Census workers completed their work last month.) Here are the changes in private-sector employment over the last six months:

February: 62,000
March: 158,000
April: 241,000
May: 51,000
June: 31,000
July: 71,000
You can see a clear change starting in May. Some unknown combination of events — the debt crisis in Europe, still-soft consumer spending, the BP oil spill — caused employers to pull back significantly on hiring, based on the data we now have. And employers remained reticent in July.

State and local governments also cut jobs — 48,000, combined — which is yet another sign that federal aid to states is needed.

Last month’s unemployment rate — based on a survey of households, which is much smaller than the survey of employers — remained steady, and it actually fell in June. But that’s not meaningful. In both months, the share of the population with jobs dropped. The unemployment rate did not only because a significant number of people stopped looking for work, according to the Labor Department’s household survey, and thus were not counted as officially unemployed.

The bottom line is that job growth has not been fast enough to keep up with normal population growth.

As I mentioned above, though, there were some glimmers of hope in this jobs report.

The length of the workweek increased in July, to 34.2 hours, from 34.1 hours. It had shrunk in June. The workweek is now longer than it has been since January 2009. It’s common for employers first to increase the work of their existing employees before they begin hiring new ones.

Wages also rose in July. Average hourly pay increased to $22.59, from $22.55. Hourly pay, even after adjusting for inflation, is now at a high, despite the terrible recession. However many employers are cutting pay, more are evidently increasing it.

And for the third consecutive month, there was a drop in the number of people working part-time because they could not full-time work. Slightly more than 8.5 million workers were in this category last month, down from 9.2 million in April. When the recession began, in December 2007, only 4.7 million people were.

Conor Dougherty in the Wall Street Journal's Econ Blog:

State and local governments shed 48,000 jobs in July, the biggest drop in a year and almost double last month’s drop, according to today’s employment report.

State and local government have cut a combined 169,000 jobs this year, including 102,000 over the past three months. Friday’s report suggests job losses could continue to accelerate as states grapple with weak tax revenues and the loss of federal budget support later this year. July is the first month of most states’ 2011 fiscal year, so the month’s job losses reflect budget decisions that were made months ago but don’t translate to job losses until the fiscal year turns.

Local governments shed 38,000 jobs in July. States cut 10,000. Local government — everything from cities to school boards and transportation districts — account for 14.3 million jobs, compared with 5.1 million for states. More people work in local government than in the entire manufacturing sector.

US Unemployment: Depressing

How can 431,000 new jobs and a declining unemployment rate be depressing? When almost all of those new jobs were temporary Census jobs meaning that private sector employment was completely moribund just a month after a very strong private sector expansion.

This might be evidence that the temporarily strong jobs numbers were due to an inventory bounce.  An inventory bounce is when firms that see declining demand in a recession cut back production to drain down bulging inventories.  To do so they have to cut back more than is appropriate for the new lower demand and so eventually when they successfully draw down inventory they will have to ramp up production but only to the new lower level.  In other words, manufacturing is not recovering just adjusting to an over-correction.

It is also very troubling due to the fact that states across the nation are in fiscal crisis and are about to shed jobs and spending like crazy.  Suddenly, this weakness along with trouble in Europe makes me worried about a double dip recession - something I have been sanguine about in the past.  I think there should be very real consideration of a second round of stimulus in the form of block grants to the states.

This is, of course, very terrible news for Oregon, which has yet to gain any real traction in the job recovery front.

Things are just bad all over...

US Unemployment: Even Better News in April

Forget the fact that the unemployment rate increased to 9.9%, the real news is the pretty stunning 290,000 news jobs number.  This is a sure sign that the recovery is gaining strong momentum and that momentum is finally hitting the jobs picture.  The unemployment rate increase is due to the many discouraged workers who have decided it is worth looking for work again.  The is no two ways about it, this is great economic news...finally.

Now that I have said that, it is going to take many many strong months to get us back to where we started before the recession hit so we still have a long, long way to go.

Now let's hope that the national picture will translate to Oregon when we get our own numbers in a couple of weeks.

US Unemployment: Finally, Some Truly Good News

The US added 162,000 jobs in March and even when accounting for the large number of jobs provided by the Census, there were still well over 100,000 new jobs.  The fact that the unemployment rate didn't budge from 9.7 percent is not unexpected - new jobs bring job seekers back into the job market - and it will start to budge if this level of job gains can be sustained.  If it can be sustained is a real question at the moment, but a big headline job gain helps inspire confidence in financial markets, businesses and households and from this confidence the recovery will build momentum.  But, like a 100 car freight train, it takes a lot of juice to get it moving - in other words, it will be a slog for some time to come.  

US Unemployment: Another 36,000 Jobs Lost

NY Times graph. Source: Bureau of Labor Statistics Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

The US unemployment rate held steady at 9.7%, but again the economy shed jobs: this time 36,000. This was better than expected after the snowstorms caused substantial disruption in the east, but it still means we have yet to turn the corner to strong job gains.

US Unemployment Falls to 9.7%

And this is not good news. Once again we are still losing jobs, 20,000, when the expectation was that we would finally be adding them. So the downturn in the unemployment rate is a supply side response - those who stopped actively looking for work.

There are some good signs, manufacturing added 11,000 jobs and (as The New York Times reports) temporary workers and hours worked increased. SO there are continually improving metrics but not the one that matters most. We need to start seeing net job creation and it need to get robust.

So still we wait.

US Unemployment: Ugh

I don't have a whole lot to add to the report of continued 10% US unemployment and the surprising (and horrendous) 85,000 job loss number. It is bad, bad, bad. Count me as one of the economists who was thinking we might see positive job numbers in December.

Sputtering along, the question is for how long?