Friday, February 03, 2012
January Employment 2012
I think I mentioned this last month, but every January the population basis is adjusted for the Household Survey.
This introduces discontinuities. These numbers honestly are not directly comparable to the previous month. Some of the basic ratios shouldn't be that affected. Those are labor participation rate, which at 63.7% is a new low and may well have been affected (last month was 64%), the emp/pop ratio, which at 58.5% did not change from November or December but should be affected, and the unemployment rate, which fell again to 8.3%. That may have been affected. Nonetheless, the previous January the rate was 9.1%, so you can't say that this isn't improving. Also there was steady improvement in the previous few months, so another fall would not be unexpected.
But instead of babbling on about the changes, here is the table listing the effect:
In the next two months it will all smooth out and the running totals will become comparable again.
There's a strong hint in these adjustments that retirements are having a pretty big effect. Many of those retirements are from public employment, and those retirees are far more likely to actually exit the workforce and be replaced by younger workers. We also have a growing number of small business owners who can qualify for Medicare and thus will shut down their businesses, so it's not quite as positive a net effect as it appears. If you don't have retirement medical benefits, and if you can continue to work, you will do so.
Turning to the Establishment Survey, and ignoring the headline number of 243+ jobs, some observations:
- I expected the substantial increases for construction/reconstruction labor in the last two months. These are positively affected both by the pace of activity and highly favorable weather. Construction was +21K in January and +31K in December, and I think that those numbers are a bit overstated by seasonal adjustments, but do contain real increases.
- Increases in manufacturing are likely to be real, and probably highly associated with autos and derivatives, based on freight patterns. They are almost solely in durable manufacturing.
- Manufacturing increases create a lot of subsidiary jobs, and when you look at the whopping reported increase in private services of 176K, it's notable that there was a big increase in professional and business services. This makes sense - temporary help is up too.
- The retail and warehousing/transport categories saw healthy gains. I think these numbers are strongly supported by the claim activity we saw in January - these sectors ramped up and probably retained some of the new hires.
- Information, financial and government were the weak categories. The information drops may be mostly related to financial activity.
The number of discouraged workers reported increased from last January, rising from 993,000 to 1,059,000. Long term unemployment numbers are still excruciatingly high. It's very worrisome - that number barely drops, and probably contains a high proportion of older workers and those with some labor limitations.
Unemployed over 27 weeks:
\Full-time workers - you can make a good case that part-time employment will inevitably rise as older workers seek part-time employment, but what about younger workers that can't make a living, have no possibility of medical benefits from their job, and no hope of really improving matters? A lot of people think we have slackers galore, but you are going to see food stamp usage and so forth rising with labor stats like these:
I don't even want to think about Obamacare subsidies in 2014. The whole plan has to be reworked. There is not a chance in hell we can afford it.
Links to this post: