Today, the BLS released the Employment Situation Summary for January 2012.  The report showed a gain of 243,000 jobs (257,000 private sector gains) and showed the unemployment rate falling to 8.3% on both increases in the number of employed and a decrease in the number of unemployed.  The U-6 unemployment fell again to 15.1% and the number of discouraged workers is unchanged from a year ago, while those labeling themselves as not in the labor force, but want a job fell slightly from last month.  The November report was revised up from 100,000 to 157,000 and the December report was revised up from 200,000 to 203,000.  Also, the benchmark revision was released this month and it showed that the BLS underestimated job gains by 162,000 for 2011 (not big, but the first positive revision in 4 years I believe).  This report showed strong gains in manufacturing (up 50,000), business services (up 70,000), mining (up 10,000), healthcare (up 31,000), construction (up 20,000), and travel/leisure (up 44,000).  The participation rate was unchanged at 63.7% and the employment-population ratio increased slightly.  The seasonal adjustment for the month was right in line with its 5 year average.  Finally, the birth/death adjustment SUBTRACTED 367,000 jobs from the employment number this month.

Overall, this was a pretty good report with strength in many areas (especially important are construction and manufacturing, as these were the leaders in the Reagan recovery of 1983).  The unemployment rate continues to fall along with all of the other measures of unemployment (U-4,5, and 6).  The benchmark revision being positive for last year means that the birth/death adjustments were essentially spot on and the total we actually created roughly 13,000 more jobs a month than the original estimates.  Hopefully, the employment situation has finally turned a corner and with the decline in the productivity growth rate we saw last quarter, it is likely that any increases in demand are going to have to be met with more job creation rather that increased automation/technology at least for a while.

For anyone interested in what has been behind the 13 year drop in the labor force participation rate, here is a good resource from the St. Louis Fed.

The BLS released the Employment Situation Summary for December today and it was another relatively good report overall.  The U-3 unemployment rate decline again to 8.5% (8.3% without the seasonal adjustment) and the more inclusive (but not ideal) U-6 rate declined even more from 15.6% to 15.2%.  The Establishment Survey portion of the summary (a survey of businesses) showed job creation of 200,000 for the month (212,000 private sector with a 12,000 loss from government) with strong input from logistics and distribution and manufacturing.  October was revised up slightly and November was revised down slightly (November still gets one more revision next month).  The Household Survey (the one we get the unemployment rate from) showed that the labor force participation rate stayed at 64% and the employment-population ratio stayed at 58.5%, although the number of discouraged workers fell (with the BLS noting that “Among the marginally attached, there were 945,000 discouraged workers in December, a decrease of 373,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.”).  That is a pretty big decline and shows that while people may not be returning to the workforce in droves, they have appeared to have adjusted their lives so that working is no longer something they are considering pursuit of (ie retirement, stay at home parents, etc).

Overall, this was a pretty good report and showed that job growth is continuing (1.9 million private sector jobs created last year in the Establishment Survey) and may even be accelerating with the continued declines we have seen in the initial unemployment claims data that has been coming out (Thursday’s was down the the 370′s for the week, not seen since May of 08).  I personally believe that the labor force participation rates are not going to climb much this year, as due to the severity and length of the recession, many of those that dropped out have likely made adjustments to their lifestyles (ie retirement/stay at home/etc) and will not have a desire to return to the workforce just yet (and this appears to be bearing out int the data with the large yearly decline in the discouraged workers numbers).  With a labor force participation rate between 64 and 64.5, we should see continued declines in the unemployment rate with current levels of job creation.  While not ideal, the economy should benefit as more people who want/need to work find jobs coupled with the reduction in debt levels we have seen on personal balance sheets.

Finally, make note of next month’s report, as it will feature the benchmark revisions to the last year of Establishment Survey data (based on actual tax returns).  I expect this to show that the BLS actually UNDERESTIMATED job creation last year and that the revision will add to last years job creation totals.

The BLS today released the Employment Situation Summary for November 2011, which showed private sector job creation (as measured by the Establishment Survey) of 140,000 and an unemployment rate of 8.6% (U-3, U-6 fell from 16.2 to 15.6% as well).  The internals of the report were somewhat mixed, as the Establishment Survey showed relatively modest job creation (although September was revised up again to +210k an increase of 52,000 and October was revised up by 20k to 100k), while the Household Survey showed relatively robust job creation of 278,000 and a decline in the unemployed of 594,000.  This good news was somewhat offset by an decrease in the labor force of 315,000, which gets us to our 8.6% U-3 unemployment rate.

Overall, this report will only be a good one if the unemployment rate doesn’t subsequently rise in future months and if the job creation can continue to expand (in either survey).  I would personally also like the BLS to start adding some data to the Household Survey on those leaving the labor force, so that each month we can see a breakdown between retirements/returning to school/staying home with kids/etc.

I just wanted to update with a bit more data from the report (this table wouldn’t load for me earlier), but once again virtually all of the job gains (in the Household Survey) were for those with some college or higher.  We are simply having no luck creating jobs for those with only high school educations or less.

Today, the BLS released the September Employment Situation Summary, which showed a headline number of 103,000 new jobs created for last month (from the Establishment Survey).  This can be broken down into a gain of 137,000 new jobs by the private sector and a loss of 34,000 jobs by government (mostly state and local).  Since September of 2008, government employment is down by 535,000.  Other interesting data from the Establishment Survey included upward revisions to the past two months, with July going from +85,000 to +127,000 and August going from 0 to +57,000 and a gain of 26,000 in construction employment, which had been essentially flat since February.  Both wages and hours worked ticked up slightly for the month as well.

The Household Survey portion of report included a headline U-3 unemployment rate of 9.1% (unchanged from last month), but this was primarily caused by an increase in the labor force (the participation rate was up .2%) as the Household Survey measure of jobs created increased by 398,000 for the month and both the number of people not in the labor force and those not in the labor force but want a job both decreased in September.  That being said, U-6 ticked up to 16.5% from 16.2% mostly due to an increase in part-time employment.

Overall, this would have to go down as an unexpectedly good (in a relative sense, these numbers overall are pretty poor for an expansion, but considering expectations and the current expansion these aren’t bad) report with positive signs showing from both the upward revisions to past months, the increase in the labor force, the increase in construction jobs, and the large increase in the Household Survey job creation number.  The negatives would be the continued increase in part-time work, the lack of enough job creation to bring down any unemployment rate, and the point in the “expansion” at which this report is happening.

The BLS released the July Employment Situation Summary today (the combination of the Establishment and Household Surveys) and the results were mixed.  The seasonally adjusted numbers showed an increase (in the Establishment Survey) of 117,000 jobs (with a gain of 154,000 from the private sector) and a unemployment rate (U-3) ticking down slightly to 9.1% (from the Household Survey).  The more inclusive (but not entirely appropriate to use for all occasions) U-6 number also ticked down one notch to 16.1%.  The labor force participation rate was down again to 63.9, a level we haven’t seen since 1984 and the employment population ratio also dropped by one tick to 58.1.  While the net job creation from the Establishment Survey was pretty good (and beat expectations), the underlying numbers from the Household Survey were fairly bleak, with the labor force declining and the number of employed (seasonally adjusted) declining as well (by 38,000).

The good news from the report is that both May and June were revised up sharply (as has been the pattern since job creation resumed, with the sole exception of last month) to a +53,000 in May (from 25,000) and +46,000 in June (from 18,000).  Other good news from the report was that manufacturing employment grew again adding 24,000 jobs in July and that most of the state layoffs were due to the Minnesota shutdown and thus roughly 20,000 of the 23,000 state job losses will likely come back next month (in other words discount it in both).  Finally, the unadjusted (for whatever worth you put in unadjusted numbers) Household Survey numbers were really strong showing a +250,000 job growth for July.

The bad news from the report was that labor force participation continues to decline and that the job growth we are seeing simply is not enough to bring our economy back online and would otherwise lead to a stagnant unemployment rate but for the falling labor force numbers (the denominator in the unemployment rate calculation).  Also, while the unadjusted Household numbers were good, the unadjusted (again for whatever worth you place in unadjusted numbers) private sector Establishment numbers were not, as they showed a loss of 4,000 jobs.

The ugly news is that the distribution of unemployment doesn’t look to be changing anytime soon, with college graduates experiencing only a 4.3% unemployment rate, while those with only a high school diploma are at 9.3% and those without a high school diploma are at 15% (this is the real tale of two economies).  Also, in the ugly news category is that the number of those not in the labor force but would like to work also rose slightly last month and the mean duration of unemployment rose again to 40.4 weeks.

The economic numbers from this report, coupled with those from other recent reports suggest that the economy is entering (has entered) a period of stagnation and with the recent take downs of third quarter/full year GDP estimates from some of the big Wall Street Houses (like JP Morgan), it appears that we could stay in this stagnation for a while.

The BLS released the April 2011 Employment Situation Report today (http://www.bls.gov/news.release/pdf/empsit.pdf) and it showed a gain of 244,000 jobs (268,000 private sector) in the Establishment Survey and a decline of 190,000 jobs (but only a loss of 58,000 private sector) in the Household Survey, which lead to the unemployment rate rising to 9%.

However, there were huge seasonal adjustments this month, as the unadjusted unemployment rate fell to 8.7% and the Household Survey showed the creation of 699,000 jobs.  The more inclusive U-6 measure of unemployment rose by 2 tenths of a percent to 15.9% in seasonally adjusted terms, but fell 7 tenths to 15.5% in unadjusted terms.

Most of the other data in this report were essentially unchanged from the previous report (hours worked, wages, participation rate, employment-population ratio, etc).

And once again, the revisions to previous reports were positive, with February being revised up to +225,000 and March being revised up to +221,000.

Overall, the trend here is pretty good on the employment front, and with a few more reports in line with what we have seen this year, it is quite possible that we may see a 7 handle on the U-3 unemployment rate by the end of the year.

The BLS released the Employment Situation Report for February 2011 today and it was another good report (that makes a string of 3 in a row.  Both December’s and January’s initial reports were revised up (by about 30,000 jobs each), and the unemployment rate (U-3) dipped slightly to 8.9% (with U-6 at 15.9%).  The Establishment Survey (the survey of businesses) showed a gain of +192,000 jobs (with private sector producing +222,000 jobs) and  the Household Survey (obviously the survey of 60,000 households) showed a gain of 250,000 jobs for the month.  Both the employment-population ratio and the labor force participation rate were unchanged in February.  Overall, this was a pretty good jobs report and the drop in the unemployment rate is now starting to mirror the quick drop that followed the end of the 1981 recession (we shall see how long this continues, but with initial unemployment insurance claims dropping precipitously, it may continue for a while unless oil continues to go nuts).

While many have been challenging the labor force numbers, it is worth noting that those “not in the labor force” ticked up slightly (the overall labor force grew by about 60,000) and those “not in the labor force, but want a job” stayed the same.  Along those lines I must note that since mid 2008 (when the data set began), those 65+ saw their numbers “not in the labor force” (ie those that have left the labor force) increase by roughly 2 million people, which makes up for a lot of the stagnation in labor force growth and falls right in to what we would expect as the boomer population continues to age (another reason why I am not that concerned about the low labor force participation rate, as it is getting back towards where it was prior to the peak boomer working years).

To take a further look at the participation rate, I have included a graph showing the data going back to 1972 (when a huge gain in the women part rate began):

As you can see, there was a huge spike essentially between the end of the 74 recession and the beginning of the 80 recession (which correlated with both the first boomers entering the labor force and an upward move in the part rate of women by about 5%), then a stagnation during the double dip recessions of the early 80s, which is followed by another huge rise in the participation rate as women continued to join the labor force (about another 8% move up) and the boomer generation peaked in terms of participation.  Following those major moves, the participation rate stays fairly stagnant throughout the 90s and then begins to move down again as the first boomers reach 62 (important because that is when you can claim reduced social security benefits) and really craters during this recession (which is likely a combination of the normal stagnation we would expect during a recession coupled with boomers exiting the labor force).  I would expect that the move down in the labor force will likely end up with a rate in the 63% area once the boomer move out is finished, but would not expect a big move back up like many suggest just because we are starting to see job growth again.

The Deficit Commission Co-Chairs Report was released today and overall I would say it is an excellent starting point to getting back to fiscal sanity, complete with a breakdown of all savings/costs involved.  The report makes some needed changes to social security (raises retirement age, changes cola, etc) that would bring it back to solvency, while at the same time not getting into any debate (that likely leads nowhere) on private accounts (even if these would be nice).  The report also suggest some reforms to medicare that would shore up the solvency of that program as well.  The commission found about $100 billion in (what I would consider) relatively easy to make defense cuts (none of which should jeopardize our ability to DEFEND ourselves and couples that with $100 billion in domestic discretionary cuts (although it counts $16 billion from eliminating earmarks, when in fact that money would likely still get spent, just not through earmarking).

In its best work, the report tackles the tax code in what I believe is an excellent reform by eliminating the AMT and all tax expenditures and using the bulk of that savings to lower rates across the board.  Even after adding back in the child tax credit (which I am not sold on as necessary) and the EITC (which probably is necessary), we would still end up with brackets of 9%/15%/24% with a corporate rate of 26%.  Those rates (which access a much broader base) should encourage increased economic activity and make the tax code infinitely simpler (also a money saver for anyone but accountants and H&R BlocK).  The elimination of dubious incentives like the mortgage interest deduction goes a long way to winning my favor on this report.

Of course, the completeness and relative partisan-neutral design of this report means that it has little if any hope of being adopted, as I can see both parties (read as special interest groups that fund the parties) entrenching themselves with ideology instead of taking a facts based argument that at least gets us back to a much more sustainable fiscal picture that would benefit us all.  I want to be clear in that while I personally do not agree with everything in the report, I would be more than willing to compromise in order to get back to a fiscally sustainable path (and then start fighting the battles again from strength).

Today the BLS released the Employment Situation Report for September, which showed a decrease of 18,000 jobs ex-census. This loss was predominantly generated from local governments who shed 76,000 jobs last month, while the private sector added 64,000 jobs over the same period. This report also included the primary benchmark revisions (how far off the Establishment Survey has been for the year of March 2009 to March 2010) and found that an additional 366,000 jobs were lost over that period (a change of about -.3%). The labor force was virtually unchanged (a gain of 48,000 participants) and the unemployment rate was unchanged at 9.6% (most likely due to less new entrants to the labor force), with the more inclusive U-6 rate increasing to 17.1%. The number of those who have dropped out of the labor force, but still would like a job increased by 300,000 in September as well. Both the employment-population ratio and labor force participation rates were unchanged.

Overall, the report was fairly neutral except that at this point in a “recovery” we should (obviously) be seeing much greater job creation numbers than we have (although we are still ahead of the pace of recovery of the last two recessions). And once again this report highlights the structural changes we are undergoing, as the educated (ie bachelors degree or higher) have only a 4.4% unemployment rate. Nothing in this report indicates that we are heading toward a double-dip recession at this point.

To look at some reasons for why we are not creating jobs, we need to examine the economic changes that are (or have been) taking place since our last strong recovery (following the 1981 recession) and why we are simply in a completely different place this time.

First, if we look at the savings rate, we can clearly see that following the 1981 recession it dropped precipitously, followed by an overall decline throughout the decade, while today we have experienced the opposite, with the savings rate rising and little expectation that it will fall dramatically enough to really spur much needed demand. This brings us to retail sales,

which I have expressed here in dollars per capita to better highlight the decline in consumer spending since the recession began (reflected by increased savings and loss of income). This bodes poorly for any job creating recovery, as our economy is roughly 70% consumption based and their is again little reason to believe that given their overall financial (ie debt) situations that we are going to see the demand needed to create the jobs necessary to bring down the unemployment rate (which means we have to rely on exports).

Finally, I bring up the graph that is most damaging to any potential for a job creation recovery (coupled with a lack of demand) and that is productivity.

Here I highlighted the difference between the 80s recovery/boom and now, which clearly shows that during the 80s, productivity increased by roughly 15%, while since 2001 we have seen an increase of 25%. This increase in productivity (notice the huge jump during the recession) is clearly keeping job creation down (except for the housing bubble) and will become a much bigger problem going forward should it continue its’ upward climb (especially for those without education).

So, while we can discuss costs like regulation and taxes as hindrances of job creation, they are but ancillary to the real issues of an increased savings rate (which is good over the long run, but creates the tragedy of thrift in the short term) and our ever increasing productivity that now appears to be reaching a point where (in terms of costs of implementation) new industries immediately begin with higher rates of productivity than in the past and thus greatly limit job creation.