The September jobs report was late. The shutdown of the U.S. federal government put the release back by several weeks. Then, when the data finally showed up, it was uninspiring…at best. Some might say, “meh.” (For the uninitiated, “meh” is an exclamation used to express a lack of enthusiasm). At only 148,000, the headline payroll-growth number disappointed. The pace of U.S. payroll growth has definitively slowed in the last six months, which strengthens the argument for the Fed to postpone tapering their QE program into 2014.
The mediocre details of September’s late report broke down like this. Private sector payrolls increased by only 126,000. Definitely “meh.” Read more
169,000 new jobs in August. Sounds pretty good…unless you were expecting 180,000. Combine that with June and July gains getting revised down by 16,000 and 58,000, respectively…and you get something that falls somewhere between ‘super tepid’ and ‘lackluster.’ So, when the Federal Reserve meets next week, what will they think about jobs numbers and how will that affect their tendency toward tapering?
Year-to-date average monthly payroll gains sit at 180,250. That’s lower than the average in 2012, and more importantly, it’s lower than the rate of 200,000 that some FOMC members would prefer to see before cutting the pace of bond purchases. Of the combined June-July revisions (-74,000), an unusually high amount (over half) came from local government – mostly education. Read more
Last week, we put out a 2013 economic outlook. Our take on the U.S. economy is fairly positive…if the U.S. government can avoid the nastiest parts of the fiscal cliff. So let’s say that Republicans and Democrats can come to a solution, and the United States manages to avoid recession in the first half of the year. As the U.S. economy keeps improving in 2013, the unemployment rate should keep dropping, right? It’s dropped from 8.8% last November to its current level of 7.8% in about 12 months.
Well, as we get into 2013, don’t be too worried if that pace seems to stall for a while…at least, don’t worry that the recovery has stalled. Read more
So, today Automatic Data Processing Inc. (everybody calls them ADP) announced that they’ll be changing (their press release used the word “enhance”) the methodology they use on their widely followed monthly survey of private-sector hiring. For those of you who don’t know, ADP is a big payroll-processing company that also counts payroll numbers. ADP payrolls are important statistics to compliment the Bureau of Labor Statistics’ nonfarm payroll (NFP) data and have the potential to move the markets. Typically, the ADP report comes out the Wednesday before NFP info.
The problem – if you want to call it that – has been the criticisms that ADP’s data send out confusing signals. Read more
More and more interesting stuff comes out on the jobs report. My post yesterday mentioned some issues surrounding the change in the number of part-time workers in the employment numbers. I just came across this report from Robert Barbera at the Johns Hopkins Center for Financial Economics (thanks to Economist’s View for finding this). While I feel we’ll likely have to wait for several more months of data to determine if the lower unemployment rate is a trend or not, Dr. Barbera posits that the spike in part-timers is itself a trend, which he attributes to “faulty seasonal adjustments.”
As we now know, the drop in the U.S. unemployment rate to 7.8% was driven by a big jump up the estimated number of employed people – 847,000 according to the Bureau of Labor Statistics. It might be worthwhile to look a couple of the factors that influence that number. It’s worth noting too that these factors might not be mutually exclusive.
1 — A big jump up in the number of people taking part-time work for economic reasons – this was up by over 500,000.
2 — An increase of over 300,000 in the seasonally adjusted employment rate for 20- to 24-year-olds (covered very thoughtfully by Catherine Rampell over at the New York Times blog Economix). Typically, from August to September the number of employed 20- to 24-year-olds drops as college kids give up their summer jobs to back to school. In fact, employment for 20- to 24-year-olds has increased only two other times since the employment series started in 1948. In addition, from July to August, in the non-seasonally adjusted data, the estimated number of employed 20- to 24-year-olds dropped by 530,000.
Remember today everyone. Today’s the day that the unemployment rate fell below 8.0% in the United States. At 7.8%, this is the lowest unemployment rate since January of 2009. Don’t get me wrong, the economy has still got a long way to go, but you’ve got to admit that it feels good to see that number tick down. And the best part is…the unemployment percentage dropped not because people were giving up the search and dropping out, but because they were getting hired.
Here’s what it looked like according to the data release from the U.S. Bureau of Labor statistics (you can read their full report here). There was in increase in total nonfarm payroll employment during September of 114,000, while the unemployment rate notched down from 8.1% to 7.8%. This is based on the so-called Household Survey, where the BLS calls around to about 60,000 households every month to find out if people have been working, have been looking for work, or aren’t working.