Percent Job Losses During Recessionsthe employment situation report from the BLS for febraury was delayed till this friday of this week, apparently because february had one less day than most other months…the headline number from the establishment survey showed a seasonally adjusted increase of 227,000 non-farm jobs, based on preliminary responses from about one third of all US businesses and agencies (and which has a 90-percent level of confidence with a confidence interval of plus or minus 100,000)…the December report was revised upward from an increase of 203,000 jobs to 223,000, and the change for January was revised from an increase of 243,000 to up 284,000private sector jobs grew by 233,000 in february, offset by only 6000 government job losses, the best we’ve seen for govt totals since the census; strong private sector increases included business services with 82,000 jobs added, more than half of which were temporary help services; health care & social assistance, with 61,000 jobs added, food services and drinking places with a 41,000 increase, and 31,000 in durable goods manufacturing..since seasonally adjusted construction employment declined 13,000, this positive report doesnt seem to have benefited from the much warmer than normal february, although we cant dismiss the overall positive effects of the 4th warmest winter on record on the reports of the past three months…the average workweek for all nonfarm workers was unchanged at 34.5 hours, although the manufacturing workweek edged up by 0.1 hour to 41.0 hours, & average hourly earnings for all employees rose by 3 cents, or 0.1 percent, to $23.31…recall that we get the headline unemployment numbers from the other section of this report, the household survey, which is based on surveys of 60,000 households; again, on a seasonally adjusted basis, this survey showed an increase of 428,000 employed; meanwhile, the civilian labor force rose by 476,000, as those “not in the labor force” decreased by 310,000 and the working age population increased 166,000; thus, even with the large increase in the employed, the U-3 unemployment rate remained unchanged at 8.3%…the broader U-6 measure, which includes those working part-time who want full time work, dropped to 14.9% from 15.1% in january; since anecdotal reports indicate an increase in temporary & part time jobs, this U-6 decline might also be indicative of workers becoming satisfied with less than full time work…notice this reported decrease in those “not in the labor force” indicates that those who hadnt been looking for work are now searching for work once again, accordingly, the labor force participation rate, the metric we’ve been watching for real signs of improvement, increased from 63.7% to 63.9, & the employment-population ratio also was up from 58.5% to 58.6%…this was the first time we’ve seen those “not in the labor force” decrease in a while, and if those discouraged workers continue to return en masse, there’s the potential for the number of employed to increase significantly yet still have the unemployment rate rise as they join those who are counted…we still have a way to go; for perspective, i’ve included above a chart from calculated risk showing the job losses from the start of this employment recession, in percentage terms, compared to other post-war recessions; of the 8.8 million net jobs lost between January 2008 and February 2010, 3.5 million nonfarm payroll jobs have been recovered…

Unemployment Duration looking at other numbers from the household survey, the number of long-term unemployed (ie, those jobless for 27 weeks or more) was nearly unchanged at 5.4 million in february; these individuals accounted for 42.6 percent of the total number of unemployed, barely down from a peak far greater than at any time in our recent history, as is illustrated in red on the second chart to the right, which also shows the number of unemployed less than 5 weeks (orange), 6 to 14 weeks(blue), and 15 to 26 weeks (purple)…the household survey also breaks out unemployed by race, sex and age in table A-2; noteworthy from that table is youth unemployment at 21.3%, with the rate for white youth at 14.1% and for black youth at 34.7% — remember, by BLS methodology, these young people arent counted as unemployed unless they are actively seeking work, so the actual numbers of idle teens are likely much higher….BLS also notes that among those not counted as being in the labor force (& hence not counted as unemployed) there were another 2.6 million people who they call “marginally attached” to the labor force, ie, that they had looked for work sometime during the past year, but not during the 4 week timeframe referenced by this month’s report; of those, 1.6 million reported they wanted & were available for work, and another million were classified as “discouraged”, meaning they were not currently looking for work because they believed that no jobs were available for them – again, remember, none of these “marginally attached” workers count as unemployed…

the other reports released this week were not as encouraging as the unemployment report; the one we’re going to look at first is the consumer credit report for january…you may recall we first started looking at this report a few months ago, when contrary to the “consumer deleveraging” meme, we saw an 9.9% seasonally adjusted surge in borrowing, which was the biggest surge in consumer borrowing in 11 years; december’s borrowing was high as well, which was when we first noticed it was being driven by escalating borrowing for student loans; this month’s report show more of the same; the top line growth of consumer borrowing in january rose by $17.8 billion, an annual rate of 8.6%, but while some of the media is reporting this as credit card driven, revolving credit (ie credit card borrowing) actually decreased 4.4%, while non-revolving credit (cars, yachts, mobile homes, student loans etc, but not mortgages) jumped by 14.7%; this compares to rates of increase for revolving credit of below 1.5% for the 3 year period between 2008 & 2010…if you look at consumer credit outstanding, the second table in the Fed report, you see that of this non-revolving credit, the increase coming from banks was less than 1%, with no increase from finance companies, yet the increase in consumer borrowing from the federal government was $27.9 billion; that means that ex-student loans, all other consumer borrowing actually fell by more that $10 billion dollars…and federal student loans, which were a small part of consumer borrowing at $316.4 billion in the 4th quarter of 2010, have ballooned to $453.0, a 43% increase in less than a year & a half…this has drawn the attention of the NY Fed, which has a new report out on student debt (“Grading Student Loans”); they show total student debt to be about $870 billion—more than credit card balances ($693 billion) and auto loans ($730 billion); and furthermore, most of student loan borrowers were not paying down their balances…the chart i’m including here, which shows the growth of student loans compared to other consumer credit since 1999, is from an article on student loans at zero hedge, which alleges, among other things, that many people are now taking out student loans just to live; that the loans have become essentially a form of welfare that must be paid back…

U.S. Trade Deficit another report we should look at this week is for the US trade deficit for january (pdf), which jumped to the widest imbalance in more than three years as our imports hit an all-time highexports of $180.8 billion and imports of $233.4 billion resulted in a deficit for the month of $52.6 billion, an increase from a revised $50.4 billion in december and the biggest trade gap since october 2008…part of the problem was that our exports to europe fell while our imports of oil and of cars & computers from asia rose, with imports from china alone rising 4.7 percent to $34.4 billion; and it’s accelerating as well, as the 3 month rise in the deficit is the largest ever on record, with a $9.4bn increase over that period…i’m including another calculated risk chart (to the left) because it illustrates it the best; blue is the total trade deficit; black is oil imports, and red is the trade-deficit-ex petroleum…oil averaged $103.81 per barrel in january, so this looks to be getting worse…& this trade deficit was considered bad enough that even with the decent jobs report out on the same day, goldman sachs lowered their first quarter GDP forecast from 2.0% to 1.8%, as did Macroadvisors, and J.P. Morgan Chase economists lowered their forecast for first-quarter GDP to 1.5% from 2%

Foreclosure Starts and Sales the Mortgage Monitor for January (pdf) was also finally released this week by LPS (Lender Processing Services); according to this report there was a sharp increase in both foreclosure starts and completions in january; they reported that 2.08 million loans, or 4.15% of all outstanding mortgages, were in the foreclosure process in january, which was up from 4.11% in December, and an additional 7.97% of all mortgages were delinquent in January, which was down from 8.15% in december, and down from 8.90% in January 2011; of those 4 million mortgage loans that were delinquent, 2.23 million were less than 90 days delinquent and 1.77 million loans were over 90 days delinquent, meaning a total of 6.08 million homeowners, or 12.12% of all homeowners with mortgages, were not making payments on their home loans in january…LPS reports that 203,458 foreclosure actions were started in january, up 28% from december (some banks had holiday moratoriums), and 91,086 foreclosures were completed in january, which was up 29% from december…the adjacent graph from LPS Applied Analytics (from p8 of the pdf) shows foreclosure starts and completions by month going back to the beginning of 2008; you’ll note that in every month over the 4 year period that foreclosure starts (blue) far exceeded the completions (red); accordingly, from the bar graph on page 9 of the pdf, we can see that in non-judicial states, the average length of time a home has been in the foreclosure process has been 17.2 months, and in judicial states, where banks have to prove ownership of the mortgage in court, homes have remained in the foreclosure process 24.1 months, or over two years; nationally, over 40% of all homes in foreclosure have been there over 2 years without making a payment (see that graphic p 19 of the pdf)…the foreclosure process is expected to accelerate with the completion of the foreclosure fraud settlement, which as of the latest still hasnt been inked…if you have any interest in further details as to the condition of home mortgages in this country, the LPS Mortgage Monitor is a 34 pp pdf, which includes state by state tables and graphics which will explain it all…

LPS also has a home price index which they reported on this week; it’s for prices in december so it appears to lag other reports, however, they report closings, whereas other indexes report recorded sales, so they’re actually in front of the pack; they reported home sale prices, now down for 6 months in a row, accelerated their decline by 1% in december, with their early data suggesting a further 1.2% drop in home prices took place in january, with prices increasing in only 8.0 percent of the ZIP codes they cover…CoreLogic also reported their home price index for january, which is a weighted 3 month average of Nov thru Jan prices; they show national home prices declined on a year-over-year basis by 3.1% in january and 1% when compared to december’s report, also their sixth consecutive monthly decline; however, excluding distressed sales, year-over-year prices only declined by 0.9% in january and without distressed sales, january home prices actually increased 0.7% from december

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)