The horizon is not so far as we can see, but as far as we can imagine

Tag: job report

216,000 Jobs Lost in August, Unemployment up .3% to 9.7%

The manufacturing sector lost 63K, the financial sector 28K and Construction lost 65. Health care added 47.4 thousand jobs.

One of the more interesting findings is that up till April government jobs were increasing, since April they have declined.  The decline isn’t huge, but it exists at all levels of government.  For some reason the postal service in particular seems to be shedding jobs.

Though the job loss is less than we’ve seen in the past it’s surprisingly uniform: except for health care and social assistance everything else is either down, or just barely increasing.  Fundamentally, every industry without pricing power is taking it on the chin, but if you’re sick, you’re sick, so the medical industry retains the ability to hire.  I suspect that the manufacturing numbers would be much worse if defense related manufacturing was removed.

The broadest measure of unemployment, which includes all discouraged workers and folks who work part time but want full time work is up .5% to 16.8%.

Men have lost jobs a lot faster than women.  The female unemployment rate has increased by 2.5% in the last year compared to an increase for males of 4.3%.

America continues to be hollowed out.  The stimulus will start hitting harder over the next few months, and we should see somewhat better numbers but my long term forecast remains the same: before the next recession, the US will not see a recovery to the same percentage of people employed as before the recession.  My forecast for the year was a technical recovery of GDP before the end of the year (it looks like we might even have one for the second quarter, which is sooner than I expected) and no job gains before next year.  Might be wrong on the second as well, but any job gains will be nominal and below the 150,000 level just required to keep up with population increases.

The job market is certainly not going to feel good this year. I expect it to remain hard to find a new job right through the end of 2010.  Since the likelihood of a new civilian stimulus bill is low, and all stimulus will have to be run through the defense department and the Afghan war, I would suggest that those who can see what they can do about getting a security clearance.  The best paid jobs with the best benefits will be in the defense industry for the time being—unless you’re able to finagle a high end job in the finance industry, and be kept afloat with trillions of dollars of Federal Reserve money, of course.  In which case, buddy, could you spare some change?

[Employment situation release from BLS (pdf)]

Job Report: Better than expected

As everyone probably knows by now, the job report was better than expected (certainly better than I would have predicted), with the payroll survey showing only 345,000 job losses, which compared to last month’s 506,000 looks pretty good.  Of course, 220,000 of this came from increases in jobs due to the birth/death model.  I haven’t, as a rule, hammered the birth/death model the way some other econobloggers have, but I’ll just point out what should be obvious: there is no way that unreported new businesses are being created in excess of lost businesses right now.  It’s not happening.  So those 220,000 jobs don’t exist except in some statisticians fevered imagination.  That said, the news is still good, because the birth/death model was around in prior months too.

Overall job losses for the duration of the downturn are still horrific, and in particular the manufacturing industry, which lost jobs virtually all through the last “expansion” continues to take it on the chin.  Since these are generally relatively good jobs, and since they also tend more towards being export jobs, this is worrisome.

The only sectors which actually added employees last month were general retail stores, and health and education.  Health and education, of course, means government.  General retail stores is a good sign, but the numbers aren’t all that large, and in the face of continued job losses and tightening credit, I’m less than convinced that consumer spending is not going to drop again.

The primary negative factors I see still operating are twofold.  First, I expect another massive round of mortgage defaults, and second I expect to see municipalities and States start doing some very significant layoffs.  If health and education were to start losing significant jobs, that would be a significant blow.

On the plus side, the majority of the stimulus is still to come, and the massive amounts of money pumped into the financial system are obviously having some mitigating effects.

I’m going to hold steady on my long term prediction that employment will not recover before the next recession, and that median disposable income is going to decline over the length of this economic cycle.

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