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Friday, October 05, 2012


A very good employment report. Last month I was expecting much better, but the survey week timing probably pushed all this into September. 

The reason I expected much better last month was due to school reopenings. Due to seasonal adjustments, the Household survey has picked all that up and magnified it, so reporting a massive employment gain of 873K this month. That is really spread between September and August. 

Household. Establishment. Table A-10

This is a good employment report, and if you average the three months on the Household you'll get closer to reality. Over the course of the last few years, education has assumed a much larger role relative role in the economy, so you see it show up disproportionately in these reports.

Over on the establishment side, one gets a much less vivacious picture, although we got an upward revision in August numbers. Yet I believe there is real underlying improvement in money flows and thus employment.

I don't have time to do this thoroughly today, and it will probably be Sunday before I get to it. 

The forces driving down the unemployment rate are dual. Over the last year according to the population survey, the non-in-labor-force number grew by over 2.6 million. We also added over 2.5 million jobs. The emp-pop ratio rose to 58.7% this month. It is probably 5.6, but that is still a real improvement. Over the course of the year, labor force participation dropped by another half a percent (64.1 -> 63.6), and that reflects retirements. 

The women-who-maintain-families unemployment rate dropped to 11.3%, after having risen since the spring. 

Most of the net new jobs "found" in the Household survey were part-time - part-time workers for economic reasons rose by 582K. Most of that was due to slack work conditions. So paradoxically, we are seeing both a worsening employment environment and an improving employment environment. 

In general, the take-up for part-time jobs improves, thus improving the employment numbers, in the early stages of a recession. You see the increase in part-time jobs numbers. You also see the drop in temp workers, which we are seeing now.

However, during most periods of economic slack we simply do not have the tremendous demographic forces at work that we do now. These demographic forces literally HAVE to drive unemployment down.


only 140,000 jobs added...

but 873,000 more people working? 550,000 part-time?

as europe and asia tumble downward?

it doesn't add up.

welch and santelli smell a skunk.


Mom, I'm feeling whipsawed by conflicting data. I read your posts regularly and it seems that based on some of your recent comments, you've been hinting that we're on the verge of a recession if not already in one. Now, happy days are here again? Could you do a post that puts recent economic data in some sort of context?
I appreciate all the work you do to enlighten some of us semi-literate (in the economic sense) types. Thanks.
here's weird for ya.

In Canada, in the same time period, the economy add 52,100 jobs and the rate went up from 7.3% to 7.4%

52,100 jobs in Canada translates into 521,000 jobs in the USA.

Seems very strange that the very weak US data produces a .3% drop and the very, very strong Canadian data produces a .1% increase.

I smell cooking at high pressure.
Everyone - I don't think these figures are manipulated.

Third Coast - will do. The economy seems to be almost at a standstill; moving parts have to do more with demographic shifts/goverment benefits than anything else. But not today - this weekend, when I get the time.

The last two months have shown no growth in temp employment, which kind of gives you a clue.

Not sure I follow your thought that demographic forces must necessarily drive unemployment down. That would be true for previous generations, but is it true for the baby boomers? With advances in health care and reductions in old-age benefits, might they not stay in the work force rather than retiring completely?

Or maybe I completely missed your point.


This is a good employment report...

I agree that it is a good employment report compared to recent history, but it is a horrible employment report during an economic expansion compared to long-term history.

40.7 Million Missing Jobs

I've added a new chart at the end of the post. Check out the growth trend since 1984.

I'll remain a permabear. Sigh.
I work in the tech field and I can tell you that all the talk is about layoffs, not added positions. This is true in a number of companies/divisions I deal with. The situation has become worse this fall relative to the spring 2012/ late winter of last year, when there were some open positions.

It does not feel like a recovery in any way. All of the local things in small businesses I see are of further cutbacks and attempts to cut expenses.

I like others here, have to suspect these figures being published. If we have ~122 million workers and we fall 0.3 percent in one month, I would expect that we have added something like 360,000 plus jobs above and beyond any job losses. But the stats show a gain of less then 120,000. Hmmmm……..

Would the folks at the BLS fudge figures? I do not know but the timing of this report is very strange. The Government just spent 8 days trying to say the Benghazi attacks were spontaneous, a claim that has been shown to be false and known to be false from the start of the narrative. That says the current executive branch has been caught in a lie, a lie whose purpose could only have been to dampen any comparison of the loud foreign policy success crowing at the Democratic convention one week before. That says they will lie to retain the favorable narrative going into the election.

This is the same executive branch that has been caught in numerous lies over fast and the furious in the last two years. At the end of the day it would appear this program was a cynical attempt by the administration to sell guns to criminals, to have them misused and in turn use this as grounds to enact additional gun control laws. An administration that would willingly see folks die to further such laws really has no scruples when it comes to any actions that it sees as furthering its path to a desired end.

Given the above, why would a sane person not believe they are telling the true now? I think it is an active attempt to influence the election cycle by manipulation. I cannot prove it but it fits the facts far better then any other explanation.

U6 didn't budge.


I echo Mr sensitive. I work in electricity generation. According to the government, we just saw the biggest increase in employment (using the household survey) in 30 years. This implies new businesses, expansion, etc. We are not seeing this is electric demand. We are still well below peak demand, which occurred in 2007.
There are two types of jobs in America. The government backed, affiliated or sponsored ones and their derivative cousins, with COLA indexed wages and merit pay raises. And then, all the others. The governmental supported employee middle class has been and continues to grow while the other side has stagnated. Obama's/Bernanke's plan seems to be push the inflation pedal enough that the trickle down from the government supported sectors lifts up the other half over time. That's the true 47% home field advantage the incumbents have. And with Obamacare on the horizon that should be over 60% soon enough.
...When it reaches 100% and we're all employed by the government, then hopefully we call all have jobs paying 150% of the median income and retire with full benefits after 20 to 30 years...

Anon PA
The only meaningful stat is Food Stamp rolls. I'll believe in a meaningful recovery when those numbers stop going up.
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