Unemployment is up a fraction of a percent.

The January Jobs reports are out and for once, there is a modicum of (somewhat) good news. The Labor Department reported 157K new jobs for January 2013 and significantly revised both November and December 2012 numbers upwards:

Employers added 157,000 jobs in January, the Labor Department said, which was right in line with analyst expectations. The best news, though, was that revised estimates put job creation in November and December much higher than earlier estimated; the nation added a whopping 247,000 jobs in November and 196,000 in December, revisions that place those numbers a combined 127,000 jobs above earlier estimates.

The unemployment rate ticked up to 7.9 percent, from 7.8 percent, however, as both the number of people reporting having a job and the number looking for one edged up.

I’m sure we will hear a lot about how the January figures were “…right in line with analyst expectations” given how they are usually “surprised” that their predictions are wrong.

The .1% uptick in the unemployment rate (from 7.8% to 7.9% is not all that much of a surprise – or shouldn’t be – if the economy truly is improving after all these years. The BLS U6 figure for the un/underemployed and marginally attached folks was unchanged at 14.4% (a figure that I believe is low but can’t prove). Bloomberg reported the jobs news as:

Sustained hiring gains will give incomes a lift, buffering American workers from the sting of higher payroll taxes and helping them keep spending. At the same time, bigger employment advances are needed to drive down a jobless rate that Federal Reserve officials say is too high.

We can but hope Bloomberg is correct in this analysis that incomes will be lifted.

This past Wednesday, ADP reported 192K private sector jobs for January (versus 166K reported by BLS – see Bloomberg link).

One of the areas that seems to escape a lot of notice is how the jobs reports impacts the Social Security Trust Fund. Bloomberg touches on this with the mention of higher wages offsetting “…the sting of higher payroll taxes” but still seems to miss how higher employment will provide more funds to keep Social Security running without needing to be “fixed.”

Of course, this in no way will stop people like Robert Samuelson of the Washington Post from offering up his fantasy of cutting Social Security as part of a “sequestration”:

To be effective, a sequester has to hit millions of Americans so hard that, if it took effect, mobs of outraged voters would storm Capitol Hill.

Here’s my modest proposal to do that. Unless congressional negotiators agreed on at least $1 trillion in deficit cuts over a decade — personally, I’d go higher — then the desired amount would be raised in two ways: half from across-the-board income-tax increases and half from across-the-board Social Security cuts. People would see their take-home pay and retiree benefits reduced. There would be no mystery.

…snip…

It won’t happen. Truth in journalism: I have proposed this before. There were no takers. It would astonish me if there were any now. But the point is that there is a path to agreement. The fact that our so-called leaders don’t take it reflects their calculation that disagreeing is better politics.

Thankfully, he has had no takers so he has a sad

Allison Linn at NBC News offers a counter to Samuelson and his gibberish with this report of a survey with results that fly in the face of so much Beltway Conventional Wisdom:

Read the rest of this entry →

Photo: Doug Geisler / Flickr

The ADP Report on private sector jobs came out today and showed an increase of 158K jobs. David Dayen at the FDL News Desk discusses this report and the Bureau of Labor Statistics report that will be issued tomorrow morning (Friday, November 2):

Plug this all in and what have you got? The consensus forecast calls for an increase in 125,000 jobs. That would be an increase from last month’s increase of 114,000, but below the increases in July and August (August and September will get revised in the report). This generally matches what we’re seeing in the ancillary reports, and shouldn’t be a number that would arouse joy or sadness in either Presidential campaign. However, with the volatility of last month’s topline unemployment rate, derived from the household survey, I wouldn’t be surprised if you saw it increase from the current level of 7.8%.

Either way, it’s a preliminary report, and we probably shouldn’t put as much weight on it as we will, especially with the political implications headed into the election.

While the weekly report of initial unemployment claims was lower than expected (economists surprised!), even this moderately good news is not all that great.

The reality for many millions of us among the long term un and underemployed is the good jobs just are not there. At the end of August, Catherine Rampell of the NY Times had an article headlined “Majority of New Jobs Pay Low Wages, Study Finds.” As I noted in this post, it was very similar to an earlier post from April ’11 I had written that was based on a Washington Post article. Both the Times article and the Post article were based on reports from the National Employment Law Project.

Sunday in the NY Times, Steven Greenhouse had this article on how employers in retail and hospitality industries use (and abuse) part time workers:

But in two leading industries — retailing and hospitality — the number of part-timers who would prefer to work full-time has jumped to 3.1 million, or two-and-a-half times the 2006 level, according to the Bureau of Labor Statistics. In retailing alone, nearly 30 percent of part-timers want full-time jobs, up from 10.6 percent in 2006. The agency found that in the retail and wholesale sector, which includes hundreds of thousands of small stores that rely heavily on full-time workers, about 3 in 10 employees work part-time….snip…

A 2011 survey of 436 employees at retailers in New York City, as diverse as luxury establishments on Fifth Avenue and dollar stores in the Bronx, found that half of the city’s retail workers were part-time and only one in 10 part-time workers had a set schedule week to week. One-fifth said they always or often had to be available for call-in shifts, according to the survey, which was overseen by researchers at City University of New York.

…snip…

Mr. Flickinger, the retail consultant, said companies benefited from using many part-timers. “It’s almost like sharecropping — if you have a lot of farmers with small plots of land, they work very hard to produce in that limited amount of land,” he said. “Many part-time workers feel a real competition to work hard during their limited hours because they want to impress managers to give them more hours.”

What? Could someone have actually spoken a truth here? The modern day wage slave, complete with sharecropping as the ideal.

While CNN has an article this morning attempting to paint the rosy glasses scenario on how the jobs are not all part time minimum wage, even they have to acknowledge the reality of the lower wage since 24% of the “new” jobs are in hospitality and retail:

Read the rest of this entry →

Employment Population Ratio, Participation and Unemployment Rates (calculatedriskblog.com)

This week has seen the final jobs reports that will be available to make a possibly measurable impact prior to November 6. Wednesday’s report from ADP had 162K new private sector jobs. Yesterday’s (Thursday, October 4) Jobless claims report had a slight increase to 367K new jobless claims and 4 week rolling average of 375K new claims. Finally, today’s (Friday, October 5) Bureau of Labor Statistics report has an increase of 114,000 jobs for September and the jobless rate falling to 7.8%.

It seems the fall in the overall unemployment rate has some folks on the right, led by Neutron Jack Welch, claiming the numbers have been cooked. David Dayen at FDL News puts it this way:

Because data is just fungible to the political leanings of whoever confronts it, we predictably saw a number of conservatives question today’s jobs report, suggesting that the Bureau of Labor Statistics fudged the data to help the President’s re-election campaign. Leading this charge was former GE CEO Jack Welch on Twitter. I think the government should make a deal with Welch – they’ll admit to massaging the data if he cleans up all the PCBs in the Hudson River personally.

On a more serious note, this is really pretty outrageous, and Labor Secretary Hilda Solis, whose department includes the BLS, is right to be insulted. The BLS is a civil service agency that until recently was still run by a Bush appointee. It now has a career bureaucrat in charge. The political team plays no role whatsoever in the derivation of or announcement of the jobs data. And if, despite all this, BLS cooked the books, they’re terrible at it, because they shifted the data in the household survey without corresponding in the establishment survey.

My WAG on this is that the adjustment of the number of jobs for July and August probably had as much affect on the September jobless rate as the actual numbers for September. As far as I can see, this opinion piece from Jay Schalin at Fox News pretty much covers the basic point of the “unemployment” figures:

One thing the current economic slump has made painfully clear is that the unemployment rate is an imperfect tool for gauging the health of the economy. Washington should replace it with a more meaningful and useful benchmark: the labor-force participation rate.

The widely publicized unemployment rate, eagerly awaited each month by pundits and policy wonks, has become little more than a shell game in which officials keep the public guessing about the real state of the economy.

Please do go and read the entire piece, he makes some excellent points.

One item that I find still glaringly obvious is that for the most part, most of the people in charge or talking about jobs and the economy have no more clue about what is happening than they do about what the surface of the moon feels like. Just the past few days, I have seen these headlines as I have surfed the toobz (links embedded in headlines):

“Fiscal cliff” fears may impede faster job growth (Reuters October 2)

‘Discouraged’ workers face tough road back to employment (NBC News, October 4)

S&P 500 on verge of 5-year high day ahead of jobs data (Reuters October 4)

S&P 500 dips after four days of gains; earnings eyed (Reuters October 5)

I think the bottom line point here is any attempt to tie jobs reports, favorable or unfavorable, to the stock market is attempting so much witch craft. There IS no connection or the stock market would not be trading. As Reuters reported back in August, the market is up for the Obama administration by 74% since he took office January 2009:

At 1,400, the S&P 500 on Friday was closing in on a four-year high and was up 74 percent since January 20, 2009, the day Obama took office. Not since Dwight Eisenhower’s first term has a president had such a strong run for their first term.

As most folks reading this know, I am and have been among the long term un/underemployed. The reality for me and many millions of others is, we want to work in decent paying jobs, preferably in our chosen career fields. The dithering in DeeCee from both sides of the aisle, the constant calls for cuts to the budget, “Grand Bargains” to “save” Social Security, Medicare, and Medicaid (especially the non-existent “Bowles-Simpson” plan since there was no formal report and plan adopted by their namesake committee) personally drives me nuckin’ futz. As Mr Pierce often says, “Fck the deficit. People got no jobs. People got no money.”

It really is a simple concept. People want to work. We want to work at decent paying jobs with halfway decent benefits and contribute to the overall commonweal of the nation. Working two or three part time barely above minimum wage jobs does NOT fit this definition.

And because I can:

Cross posted from Just A Small Town Country Boy by Richard Taylor

Percent Job Losses in Post WWII Recessions, calculatedriskblog.com

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Once again, the economic community is scrambling to find the reasons why they were suprised by the March 2012 jobs report. The monthly report from ADP had private sector jobs at 209K increase for March 2012 which apparently led many economists to predict a similar number for the official report from the Bureau of Labor Statistics that was released on Friday.

Oops. Wrong again.

We have been seeing stories such as this from today’s NY Times about the “strong” jobs growth from earlier this year:

Although signs pointed to a strengthening economy earlier this year, the jobs report on Friday came with a message: don’t get ahead of yourself.

The country’s employers added a disappointing 120,000 jobs in March, about half the net gains posted in each of the preceding three months. The unemployment rate, which comes from a separate survey of households rather than employers, slipped to 8.2 percent, from 8.3 percent, as a smaller portion of the population looked for work.

120K jobs is not much more than is necessary to maintain the status quo of population growth (90K is the figure Dean Baker uses) and even 200K, while growing, does not appreciably put a dent in the long term un and underemployment rates. When there are 13M to 14M unemployed and 25M to 30M un and underemployed, 200K jobs is just not going to help all that much.

Surprisingly to me, the Benbernank may have been more realistic than many others (via Bloomberg.) Of course, the article goes on to quote Fed regional presidents as saying that the numbers, no matter how soft, probably won’t cause the Fed to actually, you know, do something to ease the un and underemployment problem. No matter that a primary part of the stated Federal Reserve Mission statement is to pursue “maximum” employment.

It does appear that the consensus being reported is to blame the warm weather from January and February for the lighter number for March. Here’s Dean Baker’s take: Read the rest of this entry →

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In this post I wrote Tuesday, I predicted that the ADP Jobs report for June would come in at around 50K private sector jobs versus the economists prediction of 100K. Well the report is out (via Reuters) and I was way wrong while the economists were also under:

Payrolls processor ADP said on Thursday private sector employment increased 157,000 after a modest 36,000 gain in May, and beating economists’ expectations for a 68,000 rise.

The original report in May (as I quoted and linked to Reuters in this post) was actually at 38K jobs so 36K is a downward revision. For what it’s worth, I do like when I am wrong on these points, especially when I’m wrong and the numbers come in far better than I thought.

Now 157K jobs sounds like something to cheer about and I guess in a way it is but we shouldn’t get all giddy with excitement quite yet. After all, the economy needs to add 100K to 150K jobs each month just to absorb new folks coming into the work force each month so 157K jobs does not dent the long term un and underemployment numbers by much. Tomorrow’s numbers from the BLS for June will include public sector as well as private sector and it is likely the public sector jobs lost will push the 157K number down significantly. And I’ll say right now that July will be worse. How can I say that? Many states start their fiscal years on July 1 and the budget axes will be showing the results as Politico discusses here: Read the rest of this entry →

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The economic reports are starting to come out for May and while there are those economists and Beltway Village Idiots Pundits who are making “gee, everything is just fine” predictions, the verifiable numbers easily refute this attitude.

First up is the monthly report from payroll processor ADP on the private sector jobs creation for May (via Reuters):

The ADP report showed private employers added a scant 38,000 jobs last month, falling from a downwardly revised 177,000 in April and well short of expectations for 175,000. It was the lowest level since September 2010.

The report boded poorly for the key U.S. non-farm payrolls report at the end of the week. Credit Suisse lowered its estimate for Friday’s employment number to 120,000 from its previous forecast of 185,000 and its private payroll estimate to 135,000 from 200,000.

ADP’s number has been weaker than the government’s private payrolls figure for 12 of the last 14 months, making Friday’s government numbers likely to come in above ADP’s report, Credit Suisse said.

Read the rest of this entry →

I would like to start today by pointing out an error I made yesterday. I assumed that since March was not finished with us, that the ADP jobs report for March would not be issued until next Wednesday. I guess ADP figures the last few days of the month don’t matter so long as they get a report out two days prior to the BLS report for the overall economy issued on the first Friday of the new month.

From Reuters on today’s (Wednesday, March 30) ADP report:

(Reuters) – Private employers added 201,000 jobs in March, while February’s figure was revised down slightly, a report by a payrolls processor showed on Wednesday.

The data was largely in line with expectations. Economists surveyed by Reuters had forecast the ADP Employer Services report would show a gain of 203,000 jobs. The report is jointly developed with Macroeconomic Advisers LLC.

February’s figure was revised down to 208,000 from 217,000.

“Basically the number was very much in line with expectations and shows that the labor recovery continues at a reasonable pace,” said David Katz, chief investment officer at Matrix Asset Advisors in New York.

Of course, Mr Katz is not accounting for the loss of jobs in the public sector. And there have been job losses in the public sector this past month.

But there have been a few articles I’ve seen during my daily surfing of the toobz, from today and earlier, that tell us a bit more about the state of the economy than the ADP report and the words of Mr Katz can tell us.

First up is this article from today’s Hartford Courant on New London, CT schools that are now providing free suppers (to go with free breakfasts and lunches) for students from low income families. From the article:

While many schools across Connecticut provide free or reduced lunch and breakfast to students from low-income homes, New London was the first to provide supper, too. Bridgeport recently launched a similar program, and Norwich is considering it.
Read the rest of this entry →

Since today (Wednesday March 2) is the first Wednesday of the new month, Automatic Data Processing (ADP) has released their monthly report estimating the new jobs for February for the private sector. As always, the economists were surprised. From Reuters:

(Reuters) – Private sector employers added more jobs than expected last month in a sign of steady improvement in the labor market, ahead of the closely watched non-farm payrolls report from the Labor Department on Friday.

Employers added 217,000 jobs in February, the ADP Employer Services report showed on Wednesday, above expectations for a rise of 175,000. January’s figure was revised higher by 2,000 to 189,000.

Economists said the private-sector hiring indicates improvement in the labor market, though they noted the month-to-month changes in ADP’s report are not always good predictors of Friday’s larger jobs numbers.

There is a quite simple explanation for why the month-to-month changes in the ADP report do not predict the larger report from the DoL Bureau of Labor Statistics. The BLS reporting includes jobs from all levels including the public sector which has been laying people off even as the pace of hiring has picked up a bit in the private sector.

Of course, even as there was some new hiring in February, layoffs also continued with Reuters also reporting this morning on a report from consultants Challenger Gray & Christmas on an increase in February of the numbers of planned layoffs:

(Reuters) – The number of planned layoffs at U.S. firms rose in February to its highest level in 11 months as government and non-profit employers let workers go, a report showed on Wednesday.

Employers announced 50,702 planned job cuts last month, the highest level since March 2010 and a jump of 32 percent from January’s 38,519, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were 20 percent higher than the 42,090 announced in February of last year, marking the first year-over-year increase since May 2009.

This doesn’t even begin to get to the jobs that will be lost with the budget cuts pushed by the Republican controlled House of Representatives. According to a report by Moody’s Analytic’s Mark Zandi (via the Washington Post), these cuts will mean 700,00 jobs lost from now through 2012:

A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.

The report, by Moody’s Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.

Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.

Being the good little doobie that he is, the Benbernank is quoted by Reuters as testifying earlier today that the cuts will cause only 200k jobs to be lost. Now isn’t that special. From the Reuters report:

(Reuters) – Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs.

Bernanke said that a $60 billion cut along the lines being pursued by Republican in the House of Representatives would likely trim growth by around two-tenths of a percentage point in the first year and one-tenth in the next year.

“That would translate into a couple of hundred thousand jobs. So it’s not trivial,” he said in response to questions from members of the House Financial Services Committee.

Don’t you just love the parsing of his words there. The cuts won’t make a big dent but they aren’t trivial. Nothing like trying to please everyone and pleasing no one.

Of course, things are also not helped when the Law of Unintended Side Consequences comes into play as it has with the recent extension of the Bush (now Bush/Obama) Tax Cuts. It seems the tax cuts are also hitting state budgets to the tune of $5.3B.

Struggling states could lose as much as $5.3 billion in tax collections during the next few years in an unintended consequence of one of the lower-profile federal tax cuts that President Obama signed in December, according to a report released Tuesday.

The tax-cut package the president signed in December is best known for extending the Bush-era tax rates for two years and giving a one-year payroll tax cut to most Americans. But it included a business tax cut that could blow a hole in state budgets: a provision allowing businesses to deduct the full value of new equipment purchases from their taxes through 2011.

That cut, intended to spur the economy by encouraging businesses to spend more money on equipment, could end up costing 19 states as much as $5.3 billion in lost revenue over the next few years, according to the report, by the Center on Budget and Policy Priorities, a research organization based in Washington.

The 19 states stand to lose money because they link their state tax laws to federal tax law. So the newly allowed federal tax deductions that businesses in those states take will lower their taxable incomes, which would in turn have the effect of driving down state corporate and income tax collections.

Oopsie.

So we wait until Friday for the official BLS Jobs Report. I usually don’t put a number on the figure of new jobs since I’m not an economist that is always surprised that my figure is wrong. I will however make the bold prediction that the number of new jobs reported Friday for February will be less than half the 217k reported by ADP today. But we shouldn’t worry, Tom Brokaw tells us that all we need are new skills and all will work out in the end.

And because I can:

Cross posted from Just A Small Town Country Boy

graphic: Mike Licht, NotionsCapital.com via Flickr

The official Department of Labor Bureau of Labor Statistics employment numbers for January 2011 are out and guess what? Same shit, different day.

According to the report (via Reuters) the jobs increase for January 2011 is 36K. This is compared to Wednesday’s report from ADP (from my post on Wednesday), that the private sector created 187K jobs in January. Since the BLS number includes public sector as well as private sector, it looks like governments at all levels shed approximately 150K jobs. The same thing as happened last month, where the number of private sector jobs was initially reported as 297K (later downgraded to 247K) while the overall number from BLS was 103K.

Of course, what will be reported heavily is that the “unemployment rate” has “dropped” to 9% from 9.4%:

There was some good news in the employment report as the jobless rate fell to 9 percent from 9.4 percent in December. The household survey from which the unemployment rate is derived showed the number of unemployed dropped by about 600,000 last month.

The unemployment rate had previously declined largely as a result of people giving up the search for work, but in January the labor force was unchanged, even after adjustments for updated population controls.

The reality appears to me to be that all the numbers are probably fudged and no one in any position to do anything or comment on it has a clue. As I said, same shit, different day.  . . . Read the rest of this entry →

Well, the January Jobs Report that is issued by ADP each month, detailing the number of private sector jobs created the month before is out. Last month, the ADP report had this number at 297K new jobs. When the official Department of Labor Bureau of Labor Statistics report came out a couple of days later, the real number of jobs was pegged at 103K new jobs for the month. Of course, the difference is because ADP only evaluates private sector jobs while the BLS report details all jobs, including those in the public sector where a lot of state and local governments have been cutting jobs.

Today’s ADP report (via Reuters):

The private sector added 187,000 jobs in January, compared with a downwardly revised 247,000 jobs in December, a report by payrolls processor ADP Employer Services showed on Wednesday.

The ADP figures come ahead of the government’s more comprehensive January labor market report on Friday, which includes both public and private sector employment.

But ADP figures for December — both initial and revised — turned out to be much stronger than the government report showed, adding to doubts about the reliability of ADP as a predictor of payrolls.

Now as I mentioned above, the differences between the ADP numbers and the BLS numbers are most likely due to the addition of public sector jobs being included in the BLS figures. I do though find it a bit interesting that ADP revised their December numbers down 50K jobs, an almost 17% downward revision from the original report. If that happens for January, then the 187K jobs becomes 155K jobs, which is just above the jobs break even point of 125K to 150K needed each month just to maintain status quo on employment and absorb new people entering the work force each month. And with the public sector most likely showing a decline again it will still keep the official unemployment rate well above 9% and the un and underemployment rate in the official area of 17% (which I believe is an under count myself). So we still will be in the 25M to 30M range of un and underemployed with millions of people out long term (defined as more than six months).  . . . Read the rest of this entry →