May 2014 Jobs Reports: Good News, Bad News

According to this article this morning from CNNMoney, the official BLS Jobs Report for May, due this Friday morning, will show that the US economy will finally have recovered all the jobs lost in the Great Recession:

Set your sights on this number: 113,000.

That's how many jobs the U.S. economy needs to hit its break-even point, to finally recover all the jobs lost in the financial crisis.

Get ready, because we're about to get there this Friday.

That's when the U.S. Department of Labor will release its May jobs report, and the outlook is rosy. Economists surveyed by CNNMoney expect the U.S. economy added 200,000 jobs in May.

I guess that's the good news. But as the article also notes, it is a purely symbolic measure:

Breaking even is a key milestone, but was a long time coming. It took just two years to wipe out 8.7 million American jobs, but it took more than four years to recover them all, making this the longest jobs recovery on record since the Department of Labor started tracking the data in 1939.

Plus, the jobs that have returned are not necessarily the same ones we lost, nor are they in the same regions.

Here's the key - through all these four plus years of job growth to get back to where we were at the start of the Great Recession, we have been falling behind as it takes roughly 90,000 new jobs each month just to keep up with the new people entering the job market each month. If we take it back to the beginning of the Great Recession in December 2007, we are still in the hole on needed jobs by a bit over 7M (6.5 (years) x 12 (months per year) x 90K (jobs per month) = 7,020,000.)

The current month report from ADP continues the good news/bad news. The good news is 179K new jobs in the private sector (though fewer than "economists predicted.") The bad news (although painted as good news by Reuters):

U.S. companies hired far fewer workers than expected in May, but an acceleration in services sector growth supported views the economy was regaining strength after sagging early this year.

While other data on Wednesday showed the trade deficit hit its widest point in two years in April, a rise in imports to record highs underscored the economy's resilience.

Why is the increase in service sector jobs bad news? Because service sector jobs tend to be lower wage.

This blog post from the Washington Post's Wonkblog from 8/31/2012 covers this:

The United States lost about 8.1 million jobs after the recession began in late 2007. The economy has since recovered about 3.3 million of those jobs, starting in early 2010. That, in itself, should alarm policymakers. The labor market is still in a deep, deep hole.

But in some respects, the situation is even bleaker than that. The types of jobs that have come back so far don't seem to be paying as well as those that were lost.

A new report (pdf) from the National Employment Law Project finds that low-wage jobs, paying $13.83 per hour or less, have dominated the recovery to date. In many cases, they appear to be replacing higher-paying jobs that were lost in the first place.

That article was not the first time the Post had noticed the low wage aspect of the "recovery" as I noted in this blog post from April 2011.

The CNN article linked at the top of the page also showed a little "moving of the goalposts" in the world of economic and jobs reporting. Buried way down at the bottom of the page were these two paragraphs:

Back in 2006 and 2007, the unemployment rate hovered between 4% and 5%, but that work level was associated with an overheating housing market. Aiming for that rate may not be an achievable goal now, as baby boomers retire and some of the long-term unemployed may be permanently out of work.

Instead, economists surveyed by CNNMoney now define "full employment" in the economy as an unemployment rate at 5.5%. At that level, there's still normal turnover in the job market, which is considered healthy. The unemployment rate was 6.3% as of April, and economists expect it could take at least two years to get to 5.5%.

The official "unemployment rate" is already a fiction as it does not account for the long term underemployed, those who are "self-employed contractors" and the people who have given up looking for work. It does show how bad things are though that the economists feel the need to redefine "full employment" while recognizing that we are still a couple of years away from achieving even this revised figure.

As Bloomberg was reporting on the trade gap in April hitting the highest point in two years, Reuters was reporting that WalMart is once again trying to push "American Made." Not surprisingly, it is not going to happen easily:

When Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America's putative manufacturing renaissance from rhetoric to reality.

But suppliers trying to reshore production as part of the initiative by the world's largest retailer are running into practical problems as they try to restart long-idled corners of U.S. manufacturing.

Companies that make the leap have to grapple with a host of challenges, including a shallow pool of component suppliers, an inexperienced workforce, and other shortcomings that developed during the country's long industrial decline.

It is not at all a surprise that there are these types of problems. As the article further notes:

Now, the retailer is asking companies to come back home - though they need little prompting. The forces pulling production back to the United States are powerful and real and include lower domestic energy prices, increasingly competitive wage rates, the benefits of greater automation, and a renewed appreciation for the value of being able to respond quickly to shifting U.S. customer demands.

My bold. "Increasingly competitive wage rates" = squeeze salaries down to as close to minimum wage as possible.

CNNMoney headline that 6 in 10 Say American Dream Is Unreachable is not a surprise at all.

And because I can:

Life in the Safety Net

If you have been reading my posts, you know I am among the long term un/underemployed. I was laid off from my then employer in April 2004. I know most economists place the official start of the Great Recession in December 2007 but given their continual "surprise" at how the economy does not conform to their expectations, the reality is a bit different. When I was laid off, I had spent the past seven to eight years working within IT on various State and Local Government social service projects. Unfortunately for me, many states had started cutting back in this area starting around 2001. Declining tax revenues led to cut-backs to contracts led to further declining revenues, etc.

Over the past nine years, I spent my unemployment benefits (I only received 6 months of unemployment benefits since my layoff preceded the official recession and advent of extended benefits.) I spent my savings. I cashed in my 401K and SEP/IRA (the best benefit there was even with paying the early cash-in penalties, I still got to spend more of the funds on myself instead of seeing the balances swirl down the toilet when the market crashed.) In 2007, I landed a part-time, online job that has been a god send.

I finally swallowed my pride in January of 2012 and applied for Supplemental Nutrition Assistance Program (SNAP) benefits (formerly known as Food Stamps). I was approved for benefits of $200 per month from Florida from February 2012 through June 2012 when I would have to be re-certified. I did not re-certify at that time as I was dealing with my late sister's estate by June and was able to pay myself a nominal salary. Since then, I have moved from Florida back to my home state of Kentucky. After I wrote this post in early July, documenting my soon to be homelessness, a friend from my hometown of Cynthiana, KY offered me a room in her home for Dan'l (my cat) and me. I am paying a nominal rent, my share of the utilities plus helping around the house. I have since applied for SNAP benefits here in Kentucky. I was initially denied due to lack of information, then approved for $159 per month then after a review after the state had received the remainder of my supporting information, the benefit amount was upgraded to $189 per month starting November 1. I do not know if the cuts to the over all SNAP program will affect my benefits but if there is a cut, so be it. I am fortunate enough to know how to cook and purchase food for myself so I can generally live within the benefit. I most likely would have to cut out the occasional treat of cookies or soda.

At this point, I am just trying to hang on until I reach age 62 next June and can apply for early Social Security. According to the SSA, my benefit for Social Security at age 62 is $1,371, a little above the current average overall benefit of $1,271 (as of September 2013.)

I do not have a car any longer. Maybe next year when I start the social security, between that and my small salary from my online job, I might be able to buy something (and pay the taxes and title and upkeep and maintenance and gas and insurance.) Once I am collecting social security, I will most likely no longer qualify for SNAP benefits and that's OK as I will have been able to use them to stay alive until I reached the "retirement" point.

Through all of this, I know I am still luckier than most. I have received help from family and friends that has kept a roof over my head. I am relatively healthy having had only a bad case of the flu back in early 2005 that I saw a doctor for, a cut on my hand in December 2005 that required an emergency room visit for four stitches (costing roughly $2,000 out-of-pocket as I am uninsured), and an infected tooth pulled at the dentist's in January 2013 for $175. The dentist gave me a 'scrip for free antibiotics to clear the infection before he pulled the tooth.

While I have been fortunate in many ways, I also know I am not alone. There are 900K veterans and 5K active military receiving SNAP benefits alone who will be impacted by the upcoming cut to the benefit level.

We hear all the stories about "fraud" in the SNAP program (and yes there is such a thing) but let me show a quick example. Let's pretend that one person has been receiving SNAP/Food Stamp benefits since age 18 at $150 per month and is now 70. Let's pretend this person has been committing fraud all along. If this person has received $150 a month for 12 months a year for 52 years, the total amount of fraud is $1,800 a year and $93.6K total. Compare that amount to the amount of farm subsidies that some members of Congress have been receiving. Which group is costing the tax payer more, my hypothetical SNAP fraudster or the recipients of hundreds of thousands of dollars annually in subsidies?

We have workers at McDonalds being directed on how to apply for SNAP benefits and Medicaid through the company's own Hot line. WalMart is the largest employer in the country yet is subsidized by the taxpayer nationwide paying for various welfare programs for the WalMart Working Poor.

It is not going to get any better anytime soon. The US economy needs roughly 90K each month just to keep pace with population growth. The ADP Jobs Report for October 2013 estimated a whopping 130K jobs for October while revising their September figures downward from 166K jobs to 145K. Add in the effects of the Government Shutdown and Sequester, I am willing to go out on a short limb and predict the official numbers from the BLS tomorrow (Friday, November 1) may well be down around 50K jobs for the month.

Some of the Beltway Village Idiots Politicians, Pundits, and Courtiers like to talk about how the numbers of people on Food Stamps and Medicaid are so high under President Obama while they avoid talking about people like Lloyd Blankfein quoted a couple of months ago at the Clinton Global Initiative:

In another remark likely to generate controversy, Blankfein praised the U.S. for having "accepted a higher unemployment rate" over the past few years, even as it bailed out the banks. Labor market flexibility—reflected in the ability of U.S. companies to fire workers—is one of the reasons the U.S. is doing so well despite many headwinds in the economy, he said.

Yep, there surely is no cause and effect between the rise in the folks using the Social Safety Net and the desire of people like Blankfein to keep unemployment higher so that wages and benefits can be kept lower.

And because I can:

Jobs and Social Security

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:

Most Americans think it’s important to preserve adequate Social Security benefits for younger generations — and they may even be willing to pay more taxes to get that assurance, a new survey finds.

The survey, released Thursday by the nonprofit National Academy of Social Insurance, found that about eight in 10 Americans think it is critical to support Social Security even if it means that working Americans have to pay more in taxes. A slightly higher percentage of the 2,000 people surveyed said they think it’s critical to save Social Security even if wealthy people have to pay more.

But here’s the thing: Many Americans also want something in return.

The study found broad-based support among both younger and older Americans for a plan that would gradually increase the amount of payroll taxes everyone pays and also eliminate the cap on the amount of income that can be taxed for Social Security. In return, that plan would call for raising minimum benefits and increasing cost-of-living-adjustments.

Raise minimum benefits, remove the cap on wages subject to Social Security, and increase cost-of-living-adjustments! Whocoodanode? Just the opposite of what Samuelson and the Washington Post (read: Pete Peterson) have pushed to get. It is only inside the beltway, with people who do not need Social Security, do we see the push to eviscerate it. Out in reality land, people understand the value of Social Security.

Now if we can just stop electing people who want to operate in Bizarro World.

And because I can:

Economists try to explain why they were wrong on March jobs forecasts

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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:

The slower job growth shown in the establishment survey in March likely reflected the fact that good weather pulled forward a lot of hiring so that workers who might typically have been hired in March instead found jobs in January and February. This is most obviously the case in construction, which showed a loss of 7,000 jobs after showing an average gain of 13,000 in the prior three months. Weather may also explain the decline of 14,200 jobs in employment services (the broader temp category) after the sector added an average of 45,600 jobs the prior three months.

The Washington Post presented this perspective this way:

Economists say the mild winter has artificially inflated job growth. February alone stole as many as 72,000 positions from March and future months, according to Macroeconomic Advisers.

Translation: The surge in hiring early in the year may not be as strong as it appeared.

The Post then goes on to "explain" things in an attempt to cushion the problem:

Typically, these bumps in demand are evened out through a process called seasonal adjustment. That allows researchers to compare one month’s economic activity with the next for a more accurate picture of the nation’s health. But this year’s weather was so abnormal that those models fell short, and economists are now scrambling to figure out how much of the growth over the past three months was simply due to a glitch in their systems.

Ah, just a "glitch in the system!" The Post ends their reporting with the rose-colored glasses firmly in place:

Typically, these bumps in demand are evened out through a process called seasonal adjustment. That allows researchers to compare one month’s economic activity with the next for a more accurate picture of the nation’s health. But this year’s weather was so abnormal that those models fell short, and economists are now scrambling to figure out how much of the growth over the past three months was simply due to a glitch in their systems.

...snip...

And despite the hand-wringing over the weather, economists seem to agree that the fundamentals of the recovery are solid. Bob Baur, global chief economist for Principal Global Investors, said he believes that the second half of the year will pick up steam as state and local governments enjoy rebounds in tax revenue and layoffs slow down.

MSNBC is showing the pretty face of the jobs picture in a similar fashion as the Post with it all just being "quirks" in the data.

The NY Times did have a report on what they termed "permabears," i.e., those economists who are skeptical of the strength of the US and global economies.

I'm on an email list from Monster.com and received one a couple of days ago on "Industry News." It included a link to an article on "Five High-Paying, Low-Stress Jobs":

1. Optometrist
2. Materials Scientist
3. Economist
4. Aeronautical Engineer
5. User Experience Designer

Since Economists seem to personify the old cliche, "Often wrong but never in doubt" it is no surprise at all that they are both highly paid and low stress. They suffer no repercussions for being wrong. Unlike the 25M to 30M long term un and underemployed who have to listen to their tap dances.

And because I can:

Sorry, but these numbers do not add up

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So, you may have noticed that the November jobs report from the Bureau of Labor Statistics is out today (via CNN):

Hiring accelerated in November, and the unemployment rate unexpectedly plummeted to its lowest rate in nearly three years.

Employers added 120,000 jobs in November, the Labor Department reported Friday, marking a pick-up in hiring from October.

Meanwhile, the unemployment rate fell to 8.6%, the lowest rate since March 2009 and a significant decline from 9% just a month before.

Sounds great, right? Well not so fast there Bunky (from the NY Times):

Still, serious concerns remain about the economy’s ability to weather a potential meltdown in Europe.

American governments at all levels continued to bleed workers, for one. And the decline in the unemployment rate had a down side: It fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force. That left the share of Americans actively participating in the work force at a historically depressed 64 percent, down from 64.2 percent in October.

Even excluding these hundreds of thousands of dropouts, the country still had a backlog of more than 13 million unemployed workers, whose spells of unemployment averaged an all-time high of 40.9 weeks.

Think about that for a moment. There were 120K new jobs for November while 315K left the workforce because they had given up on finding a job. It takes nearly 100K new jobs each month just to maintain the status quo. 120K new jobs for the month, while positive, is still a pittance of what is needed. And more than 2 1/2 times the numbers of folks who got jobs left the workforce discouraged.

MSNBC notes that even the "good news" needs to be tempered as:

The average number of hours worked remained flat in November, while wages fell by 0.1 percent.

More than half the new jobs November were added by retailers, restaurants and bars. Retailers added 50,000 jobs, the sector's biggest gain since April. Restaurants and bars hired 33,000 new workers. The health care industry added 17,000.

"The quality of jobs is not as great as you would like to see," said Mark Vitner, a senior economist at Wells Fargo Securities. "A lot of the jobs were probably part-time positions and that is one of the reasons average hourly earnings fell."

Besides the fall in the official unemployment rate from 9% to 8.6%, the U6 number as reported has also fallen for November from October's 16.2 to November's 15.6. I'm not at all sure how this can be unless the U6 has been undercounting folks (which is my supposition). Without having been undercounting people for both the U3 (official unemployment number) and U6 (un and underemployment along with 'marginally attached' i.e., those who have given up looking), it just does not seem like both U3 and U6 could fall for November when so many have left the workforce.

Wednesday (November 30), the LA Times had this opinion piece that seems to have a clearer perspective than the official number.

Yesterday's weekly Initial Unemployment Claims report was back above 400K.

While my prediction of a double-dip recession by the end of the year (made back in June) may not happen quite as soon as I thought, the overall economy is still struggling and there are still millions of people wanting to work, without work available.

Meanwhile, Newt Gingrich apparently wants to make children the primary wage earners for their families.

And because I can:

Grasping at Straws on the Economy

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So, I guess it has been a rather eventful week in the world economy and the lives of the Beltway Village Idiots Politicians, Pundits, and Courtiers. I'll let Paul Krugman and Jane Hamsher do the honors of eviscerating the Standard & Poor downgrade of the US credit rating but do want to add my 2¢ in agreement that supposed neutral arbiters who sold their souls and "independent analysis" for the banksters crappy mortgage based securities should be well advised to STFU rather than interject themselves politically.

To the non-surprise of most folks living in the reality based world, the passage of the debt ceiling increase did absolutely nothing towards improving the overall economy and the budget slashing accompanying the increase is likely to push the economy back into recession (at least that's my prediction here, here, and here). Reuters had this on the "small blessings" of the debt deal:

The More Things Stay the Same

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Well, instead of being "surprised" by the June (lack of) Jobs Report, it seems the economists were "stunned" by the numbers (via Bloomberg):

Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said he was “stunned” by today’s U.S. employment report.

He wasn’t the only one.

Not a single economist among 85 surveyed by Bloomberg News correctly forecast the 18,000 increase in payrolls in June reported by the Labor Department. Estimates ranged from a low of 60,000 to a high of 175,000. The median was 105,000 -- almost six times the actual number.

...snip...

It’s not unusual for payroll figures to fall outside of the range of economists’ forecasts. The same thing happened last month, as well as in October, November and December of last year.

That last paragraph should become a mantra for economists looking for excuses, but it most likely will not. As I've mentioned in earlier posts, there are always extraneous reasons for things happening within the economy. Like bad weather. And there will always be extraneous impacts that should be accounted for in any economic forecasting.

"Good News" but Not that Good.

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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:

New budgets from 24 states will impose severe cuts, according to the Center on Budget and Policy Priorities.

To make ends meet, Arizona will drop Medicaid coverage for 130,000 childless adults. Michigan will slice public school funding by $470 per student. New York will reduce education aid by $1.3 billion. Wisconsin plans to chop into the Earned Income Tax Credit, which hurts household budgets of the working poor.

And Minnesota? Its government shut down after state lawmakers failed to pass a budget.

Those cuts can reverberate through the private sector, since contracts with vendors and payments to businesses also get slashed.

According to this article from Reuters on the Initial Unemployment Claims report for last week, the Minnesota shutdown is already hitting the numbers:

May Economic/Jobs News Will Not Be Good

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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.

There is a reason that ADP's number has been different from the government's numbers (I will not say ADP's number is weaker though), since the government numbers cover all of the economy and not just the private sector.

The Economy Stays Muddled

I've been a bit distracted this past week or so, what with moving into a new place and getting things settled in but it sure does look like things are going on pretty much as they have been with the economy. Of course, the Economists are surprised at the figures being reported. Economists are always surprised by the figures reported.

First up is the private sector jobs report from payroll processor ADP that came out Wednesday, May 4. Via the NY Times:

Private employers in the United States added 179,000 jobs in April, while the pace of growth in the services sector unexpectedly eased in April to its lowest level since August 2010, according to economic reports released on Wednesday.

In the jobs report, the ADP Employer Services report fell short of economists’ expectations for a gain of 198,000, according to a Reuters survey. March private payrolls were revised up to an increase of 207,000 from a previously reported 201,000.

Then the economists were really surprised when the Initial Unemployment Claims report for last week that came out yesterday showed another big job in claims. Via Reuters:

While the surprise jump in initial claims for unemployment benefits was blamed on factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.

New claims for state jobless benefits rose 43,000 to 474,000, the highest since mid-August, the Labor Department said on Thursday. Economists had expected claims to fall.

...snip...

"We do not think that the entire rise in claims over the last month can be explained by special factors alone," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. "It seems instead as if the improvement in the labor market slowed a bit."

The data, a day before the U.S. government's comprehensive employment report for April, was the latest to suggest a softening in the jobs market.

Doncha just love the phrase "...softening in the jobs market"? As if the jobs market for the last few years hasn't already been closely resembling a marshmallow in strength.

February Jobs Reports Coming Out

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.

So Much for Those 297K New Jobs

Today's report on jobs creation for December 2010 is out and the numbers are not particularly good. While Wednesday's report from ADP declaring that there were 297K new jobs in the private sector in December (discussed in yesterday's post here), today's report says there were a net new jobs of 103K for December with the "official" unemployment rate falling to 9.4% and the Un and Underemployed number at 16.7% (Table A-15 here). Of course, the economists were surprised at the figures reported.

Here's the NY Times on the jobs report:

Federal, state and local governments continued to shed jobs — cutting another 10,000 last month after trimming 8,000 in November, revised from 11,000 mostly on the local level. States and municipalities dealing with tighter budgets may be faced with further cuts as they try to shrink their deficits.

While the overall picture showed improving job growth, the additions in the private sector in December were not enough to significantly reduce the ranks of the unemployed or keep pace with people entering the work force. The outlook remains bleak for many workers. More than 14.5 million people were out of work in December.

Still, economists noted that the jobs data is a lagging indicator and pointed to other signs of a turnaround, though their outlook for 2011 remained varied.

Jobs: The Spin Continues

Well the December Jobs and Jobless reports are coming in and while there's still the big one from the US DoL's Bureau of Labor Statistics due tomorrow (Friday, 1/7/11), we can already see the spinmeisters in operation.

First off is the monthly report from ADP that is released on the first Wednesday of each month (yesterday) detailing the job growth or shrinkage in private sector employment for the previous month. Via McClatchy:

WASHINGTON — Private businesses hired new workers at a surprisingly energetic pace in December, according to a widely tracked job-tracking report released on Wednesday.

The ADP National Employment Report showed that private-sector employment rose by 297,000 in December. That's the highest monthly gain since the report's inception in 2000, and it's double or triple what was expected by mainstream economists.

Most important, job gains that high are what's needed to knock down the stubbornly high unemployment rate, which has been stuck at just under 10 percent for more than a year. Currently it's at 9.8 percent, with a new official BLS report on December employment due on Friday.

ADP Jobs Report for July

Yesterday, I wrote about the idiocy of the cheerleaders who keep making speeches about how wonderful everything is in the economy so they're not going to do anything different. Then today, ADP released their Jobs Report on private sector job creation for July 2010.

Private-sector employers added jobs for the sixth month in a row in July, according to a report by payroll processing firm Automatic Data Processing (ADP). ADP said private-sector employers added 42,000 jobs to their payrolls during the month, following an upwardly revised 19,000 increase in June.

Forty-two thousand jobs sounds good right?. Well, when you consider the economy needs to add 100K to 150K jobs each month just to absorb all the new folks coming in, no it doesn't sound all that good.

Then you combine this with a second report out early today (from the same CNN story linked above)

In a separate report, planned job cuts rose for a third straight month in July, fueled by continued weakness in the government and non-profit sector, according to outplacement firm Challenger, Gray & Christmas Inc. Employers announced plans to eliminate about 42,000 jobs last month, Challenger said. That was up 6% from June, when job cuts rose to 39,000.

Jobs Reports for 3 June 2010

Well, the Weekly Report of New Unemployment claims is out and it looks like there has been a drop for the second week in a row. Of course, when the new claims are still over 450K for the week, that isn't all that good since the four week average is still at 459K.

Surprisingly enough, the problems of folks in similar straits as myself, that is, long term un/underemployed is beginning to get a little visibility. Even when the TradMed would apparently prefer we pay more attention to shiny object stories like the separation of Al and Tipper Gore or the hunt for Joran Van Der Sloot.

At the moment, I think that the BP Oil Disaster and the Gaza Flotilla attack have overwhelmed even the TradMed's abilities to distract folks.

With all of the critical news stories happening, it is still a bit of a surprise that TradMed folks are actually reporting on the long term un/underemployeds. At the MSNBC web site, Allison Linn has had articles yesterday and today on the long term un/underemployed. Yesterday she covered the "99ers" (those who have exhausted 99 weeks of Unemployment Compensation.) For those who are mathematically impaired, a year is 52 weeks so 99 weeks of Unemployment payments is five weeks short of two years. And these folks have exhausted that level of benefits. (For the record, I collected 26 weeks of unemployment in 2004 into early 2005). Today Ms Linn covers "older workers," that is, those of us who have worked most of our adult life, who bought in to the myths that by working hard we could earn a living wage and be treated with respect only to discover that instead of being appreciated for our knowledge and experience, we are actually too expensive to keep around.