Employment Report 10/05/12: A Look Beyond The Headline


Look what we have here!

The unemployment rate decreased to 7.8 percent in September, and total nonfarm payroll employment rose by 114,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care and in transportation and warehousing but changed little in most other major industries.

This is rather amusing; +114,000 is fewer than the working-age population growth in the household survey (206,000) and yet unemployment decreased.


The household survey’s unadjusted numbers, however, show some rather interesting figures, none of which make sense.  “Not in labor force” increased by 386,000 while “employed” increased by 775,000 a net change off “unemployed and looking” of well north of a million people!

But — giving up is not the same thing as finding a job.

Overall we’re adding jobs, but not enough to cover the additions to the workforce.  And while the unemployment rate decreased a big part of it came from those who gave up, which is a false number, but heh, who’s counting, right?

This figure keeps going up in a stairstep fashion and simply isn’t good.  Not-in-labor-force has to come down if we’re going to see real job progress — that’s all there is to it.

This is what employment looks like ex-work force changes.  And again, while this report isn’t a disaster, the fact remains that ex-population changes it remains negative — although not ridiculously so.  Nonetheless and in spite of the ridiculous levels of “stimulus” we’re not obtaining actual job market improvement.

A nice little blip upward in this last chart is evident, but does it matter?  Nope.  We’re still scraping along the bottom.

One disturbing thing that has shown up in the data is the skew between education and employment.  For those who are contemplating how far to go with their education this is not what you want to see at all.

The lesson in here?  Be educated but don’t be too educated. My suspicion is that the deterioration here is related to the “requirements” for salary that come with the ridiculous amount of debt kids are being asked to take on.

Another interesting factoid is found in the unemployment duration distribution — it improved on an annualized basis but the shift in the last month is not good at all, with nearly three weeks of duration being added in just the last month to average duration, which strongly implies that those who went to work this month were all recent lay-offs and not those who have been unemployed.  This, incidentally, argues directly against Bernanke’s assertion that the unemployment problem has not become structural.

One final note — workweek and hourly earnings were down for the transportation sector, which was an outlier.


Discussion (registration required to post)