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.