Friday, November 4, 2011

Jobs Sluggishly Trend Upward

Nonfarm payroll employment continued to trend up in October (+80,000),and the unemployment rate was little changed at 9.0 percent, the U.S. Bureau of Labor Statistics reported today. Job growth is a lagging indicator. Thus, coming out of a recession, there is no surprise here.

Employment in the private sector rose, with modest job growth continuing in professional and businesses services, leisure and hospitality, health care, and mining. Government employment continued to trend down.

Employment in professional and business services continued to trend up in October (+32,000) and has grown by 562,000 over the past 12 months. Within the industry, there have been modest job gains in recent months in temporary help services and in management and technical consulting services.

Employment in leisure and hospitality edged up over the month (+22,000). Since a recent low point in January 2010, the industry has added 344,000 jobs.

Health care employment continued to expand in October 2011 (+12,000),following a gain of 45,000 in September. Offices of physicians added 8,000 jobs in October. Over the past 12 months, health care has added 313,000 jobs.

Also in October, mining employment continued to increase (+6,000); oil and gas extraction accounted for half of the increase. Since a recent low point in October 2009, mining employment has risen by 152,000.

Within retail trade, employment increased in general merchandise stores (+10,000) and in motor vehicle and parts dealers (+6,000) in October. Retail trade has added 156,000 jobs over the past 12 months.

Construction employment declined by 20,000 in October, largely offsetting an increase of 27,000 in September; both over-the-month changes largely occurred in nonresidential construction. Employment in both residential and nonresidential construction has shown little net change in 2011.

Government employment continued to trend down over the month (-24,000), with most of the October decline in the non-educational component of state government. Employment in both state government and local government has been trending down since the second half of 2008.

The decline in government jobs at the state and local levels is a result of declining tax revenues because of the recession. Once the economy turns to the point where state and local government revenues increase, the government employment trends will also reverse and government will start adding back employees.


  1. Come on, Bob. You've gotta report that the Birth/Death hocus pocus added over 100k in jobs through statistical magic. The Birth/Death adjustment now accounts for half a million jobs this year. Without it, it would have printed a -23k jobs number this time around.

    I get that you're a big believer in the whole reflation/inflation forecasting aspect, but this number was not a growth number at all.

    Hell, just pay attention to the labor participation rate.

  2. @Ivanovich71

    What should the Birth/Death adjustment be in your view?

  3. If you're asking me how I would redo the stat calculation, I'd throw it out. We'd have to revamp the entire way we look and calculate unemployment. But it says something when the Birth/Death stat (which is an imaginary calculation the BLS comes up with) represents the majority of documented jobs created during the last year, and especially this month. Don't you agree?

    I mean, it's not like the B/D adjustment was 5% or even 10% of the actual number. It IS the number. And this occurs frequently (go back and look it up, it'll shock ya).

  4. So are you saying the BLS completely makes the number up?

  5. Birth/Death numbers are NOT seasonally adjusted, while the headline number is ... it is completely invalid to simply subtract the birth death number from the headline number

    h/t mish