Unemployment comes in at 10.0%; 85,000 jobs lost but November revised to gain

The forecast was for 10.1% unemployment and a gain of +15,000 jobs according to Market Watch, but 10.0% unemployment and a flat non-farm payroll number according to Bloomberg. As a reminder, ADP reported the private sector shed 84,000 jobs, the smallest job loss since March 2008. So, the labor market is definitely improving.

But, in November, 59% of the unemployed were out of work for more than 15 weeks, 38% for more than 27 weeks, the point where extended benefits kick in. The employment-to-population ratio, which takes everyone into account including those who have stopped looking, is at a two-decade low. This speaks to the depressionary conditions in the job market.

From the Employment Situation Summary:

Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.

Household Survey Data

In December, both the number of unemployed persons, at 15.3 million, and the unemployment rate, at 10.0 percent, were unchanged. At the start of the recession in December 2007, the number of unemployed persons was 7.7 million, and the unemployment rate was 5.0 percent.

Also note that there are huge data revisions in this release, going back to January 2005, so I’ll have to parse the data before I draw any definitive conclusions. On the surface, this supports my view that we would see positive job growth by year end 2009 or Q1 2010 but that unemployment should continue to rise as the labor participation rate improves.

More later.

  1. haris07 says

    In your zeal to “prove” that the labor market is improving, you are jumping to conclusions. I haven’t done the full analysis of the data either, but labor force participation DECREASED to 64.6% from 64.9% in November. As I mentioned in a response a couple of weeks ago (initial claims decrease while EUC increases!), ALL that one can say is that there is a general sense of stabilut and not a free fal collapse. Other than fudging statistics by moving people from one bucket to another and other such number games, there is NO recovery in the labor markets.

    1. Edward Harrison says

      You are reading way too much into things haris. I am fairly neutral when it comes to the numbers. You are the one who displays zeal to prove as I mentioned the data point you used:

      The employment-to-population ratio, which takes everyone into account including those who have stopped looking, is at a two-decade low. This speaks to the depressionary conditions in the job market.

      I mean really, c’mon. Wake up. If I use the word depressionary, it’s not me trying to spin a positive.

      You should read my next post.

      1. haris07 says

        Fair enough…should’ve read further before rushing to judgment. But when I see words like “improving”, it seems like its too early to say that things are improving. I personally would use stabilizing, but you write this blog and of course you have the right to your opinion and words. I am not against real improvement per se – despite coming across as a perma bear, I invest in my portfolio regularly (long positions, not just shorts) and am always looking for hint of a sustainable recovery to invest more.

        Point well taken, will stay away from jumping to concluisons!

  2. DoctoRx says

    You said: “the labor market is definitely improving.” Obv that is incorrect.

    IMO this inadvertent factual misstatement reflects the incessant cheerleading the MSM has beaten into us. The labor market is worsening, but at a slower rate as per the establishment survey.

    Per the household survey and per all sorts of polls such as Gallup.com’s, I’m not so sure that it’s not meta-stable. Of course all the money-printing and welfare disguised as stimulus (with some useful stuff I’m sure thrown into ARRA) has led to much less firing (plus standard cyclical factors as businesses cast off relative deadwood), but until there is large-scale hiring, the labor market is worsening. I would also argue that if we can’t keep up with population growth, the labor market is not improving. So even neutrality on jobs is evidence of a worsening labor market unless wages soared so much that 2nd earners could retire!

    1. Edward Harrison says

      Look, we were losing 6 or 700,000 jobs per week just a few months ago. Now we are losing 450,000. A year ago, non-farm payrolls were -6 or 700,000. Now they are basically flat.

      It is undeniably true that the employment situation is improved. How can you say otherwise? You have to distinguish between the level and the change. The change shows we are in a “less bad” state. The level shows we are still in a bad way. Hence my allusion to a depressionary reading.

      Don’t spin the numbers. The data are what they are and they are DEFINITELY improving.

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More