The Bureau of Labor Statistics just released this month’s unemployment report and the data were grim. The unemployment rate rose to 6.7%, while the economy shed 533,000 jobs – the largest decline since 1974. The result was widely expected to be bad, but yesterday we heard even more announcements of job cuts, ensuring that the unemployment rate will continue to rise in the coming months. Note that the employment participation rate dropped and last month’s job losses were revised up +80,000, meaning 6.7% wildly understate how bad this report was.
I like to follow year-on-year changes in the unemployment rate as a gauge of how quickly the employment situation is changing. We have seen the rate rise 2.0% in the past year from 4.7% a year ago. This is the largest rise since December 1982, 26 years ago and suggests the employment situation is worsening. Based on this data, I would expect a rise to at least 8.0% by August (when a flat year-over-year comparison would register 8.1%).
I will revise this post as I analyze the data for more details. Below is the statement that the BLS released with the data.
THE EMPLOYMENT SITUATION: NOVEMBER 2008
Nonfarm payroll employment fell sharply (-533,000) in November, and the unemployment rate rose from 6.5 to 6.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. November’s drop in payroll employment followed declines of 403,000 in September and 320,000 in October, as revised. Job losses were large and widespread across the major industry sectors in November.
Unemployment (Household Survey Data)
Both the number of unemployed persons (10.3 million) and the unemployment rate (6.7 percent) continued to increase in November. Since the start of the recession in December 2007, as recently announced by the National Bureau of Economic Research, the number of unemployed persons increased by 2.7 million, and the unemployment rate rose by 1.7 percentage points. (See table A-1.)
The unemployment rates for adult men (6.5 percent) and adult women (5.5 percent) continued to trend up in November. The unemployment rates for teenagers (20.4 percent), whites (6.1 percent), lacks (11.2 percent), and Hispanics (8.6 percent) showed little change over the month. The jobless rate for Asians was 4.8 percent in November, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number of persons who lost their job and did not expect to be recalled to work increased by 298,000 to 4.7 million in November. Over the past 12 months, the size of this group has increased by 2.0 million. (See table A-8.)
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.2 million in November, but was up by 822,000 over the past 12 months. (See table A-9.)
Total Employment and the Labor Force (Household Survey Data)
In November, the labor force participation rate declined by 0.3 percentage point to 65.8 percent. Total employment continued to decline, and the employment-population ratio fell to 61.4 percent. (See table A-1.)
Over the month, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) continued to increase, reaching 7.3 million. The number of such workers rose by 2.8 million over the past 12 months. This category includes persons who would
like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs. (See table A-5.)
Source
Employment Situation Summary – U.S. Bureau of Labor Statistics
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