June Employment Notes

8 Jul

Many people have summed up today’s unemployment number as dismal, disappointing and “lackluster”. The number in my opinion is plain awful and personally infuriating. I said I was looking for +30k jobs Thursday evening and it looks like I got that and a little more. Here are the numbers at a glance:

May June Change
Civ. Unemployment Rate

9.1%

9.2%

0.1%

All Nonfarm Employees (Seas. Adj)

130999k

131017k

18k

All Nonfarm Employees (Non Seas. Adj.)

131703k

132079k

376k

Civ. Emp. Population Ratio

58.4%

58.2%

-0.2%

All Unemployed

13914k

14087k

173k

Mean Wks Unemp.

39.7

39.9

0.2

Civilian Participation Rate

64.2%

64.1%

-0.1%

Median Wks Unemp.

22

22.5

0.5

U6 Rate

15.8%

16.2%

0.4%

Manufacturing Emp.

11701k

11707k

6k

Government Employment

22103k

22064k

-39

Construction Emp.

5522k

5513k

-9

One of the things that instantly stood out to me is that we have reached fresh recent new lows in both the Employment/Population ratio as well as the Civilian Participation Rate. The lowest we’ve reached in the E/P ratio has been 57.1 set in Feb and March of 1983. Today’s level is approaching the July 1983 level of 58.1. On the Civilian Participation rate front, since 1980 the low was 63.5 set in Sept 1981. The last time we reached these levels in participation rates was in March 1981. Note: All data is from 1980-present.

Another view, participation rates with unemployment rates:

Unemployment By Sector

The toll of government job cuts is beginning to show up and in my view will only get worse going into the fall. Normally in a “good” job market many government employees would be able to easily find employment in the growing private sector. Today, that is no longer the case.

Construction employment continues to muddle through at the bottom while manufacturing is slowly picking up. Notice the slight blip in government employees for the census and the shift has taken place since 2008. The trend of less government employees looks like it is finally turning in the direction that the rest of us “civilians” have been experiencing for quite some time now but I suspect that it will cause some unintended consequences for us all down the line.

Employment Duration

People unemployed 27 weeks or more jumped to 6.289 million; on the bright side we have not seen the all time high of 6.71 million set in May’s 2010 report. Part of this is due to people not being able to find work for so long that they have exhausted their regular and EUC-08 benefits. The mean number of weeks those people have been unemployed has jumped to a record high 39.9 weeks, and the trend has not gone downwards since 2010, it has continued to climb steadily since March 2010 when we hit 31.7 weeks.

May June Change
Less than 5 weeks

2664k

3076k

412k

5 to 14 weeks

2892k

2972k

80k

15 to 26 weeks

1984k

1836k

-148k

27 weeks or more

6200k

6289k

89k

What is causing me some concern is the huge jump in those who have been unemployed for less than 5 weeks. The last time we saw a jump this large was during the dark days of the recession, when in May 2008 we saw a jump of 780K and again a 439k jump in August 2008. Other than this recession, the last time the m/m change in those unemployed less than 5 weeks has been over 400k was in November 1996. The fear is that these newly minted unemployed will work their way slowly, month by month into the 27 weeks or more category.

Summary

This jobs report is troubling in many aspects; I have not even scratched the surface of the entire report. The U6 rate has spiked to 16.2%; (high of 17.4% set in October 2009). Last month, I wrote more on whether or not these string of job reports represent a structural shift for our economy however this month I am, for lack of a better word: speechless.

The focus for job creation is nowhere to be found on neither side of the spectrum (in my opinion). Obama promised that he would make jobs his number one priority on the campaign trail in 2008 only to get into office and totally ignore that (along with other promises) and focus instead on the Healthcare Reform Act which, as it may turn out, prove to be something that kills jobs in this country. The Republicans are insisting on massive draconian cuts at a time when on one hand we need to cut, but the other hand we cannot cut. The American citizen has bought the lines of both parties hook, line and sinker – the citizenry at large remains woefully ignorant of the blinders that both parties have attempted to put on the most important issue of all: jobs and job creation. We attack each other with things such as “lazy slobs” and “rich fat cats” while both parties in DC are gleefully enjoying the show.

Hope and Change – The former does not help create jobs and the change so far from both parties in DC has pitted us all against one another.

I’ve lost my hope.

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