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10 Under-Reported Realities In The US Labor Market
Beneath the unemployment rate and headline jobs number is a world of labor market signals that few, if any, ever take the time to look at. ConvergEx's Nick Colas analyzes 10 under-reported signals to look for alternative clues about the direction of the job market and, in his words, the results aren’t pretty. We’re still 2 years away from full employment at the current pace of job growth, and more people are entering the labor force for the first time since the 1980s, adding to already fierce competition for open positions. Not to mention over 7% of those not in the labor force actually want a job right now (also intensifying competition), and the rate of job growth isn’t enough to offset the number of unemployed workers with expiring benefits. On the plus side, the number of re-entrants to the labor force is at a 4-year low. And for those who do have a job, average wages are higher than ever. However, the majority of the analysis shows the labor market remains stubbornly resistant to improvement - despite talking heads belief in 'taper'ing on improvements.
Via Nick Colas of ConvergEx,
Note from Nick: We love “Top Ten lists.” Can’t get enough of them, really. Today Beth offers up one such collection, dedicated to the current state of the U.S. labor market. Looks like she could have had a “Top 17” or “top 22” list, but here are her best 10…
We’re kicking off summer with a deep dive into the BLS’s database of labor market statistics. We’ve been covering JOLTS in detail for quite some time, but felt some other lesser-discussed government jobs data deserved the spotlight as well. Below we’ve compiled a list of 10 under-reported clues as to the status of the labor market.
Yes, unemployment is falling and we’re seeing an improvement in monthly jobs numbers, but – as we explain below – there is much, much more to the story.
1) More than 1 in 20 part-time workers wish they had a full-time job. As of April, 5.5% of part-time workers were working sub-40 hour weeks because they were unable to find full-time work. The number of employees working part-time due to weak economic conditions hit a 25-year peak at 6.6% in March 2010, and while it has subsided since, there has been no material improvement in the past year – and it remains well above the long-run average of 4.0% (see chart following the text). This means that competition for available jobs is stronger than it appears. The current unemployment rate is 7.5%, but including those part-timers who are likely also searching for full-time employment, the unemployment rate would jump to 12.6%.
2) One in 14 of those who are not in the labor force actually want a job now. Last month 7.1% of people who were not in the labor force (i.e. not actively looking for work) said in a government survey that they wish to be currently employed. A majority of these people are discouraged workers who gave up hopes of finding a job and quit looking. In the years prior to the recession, the portion of people not in the labor force who indeed wanted a job, declined as more people who desired employment likely entered the labor force, where prospects were sunnier than today. The sort-of good news here is that, though this percentage hasn’t improved in the past year, it has flatted out somewhat (see chart). However it’s probable that as the labor market continues to improve, many of these people will reenter the labor force and buoy the unemployment rate.
3) The rate of job growth isn’t enough to offset the number of jobless workers with expiring unemployment benefits. Year-to-date through April, the number of people filing weekly continuing unemployment insurance claims dropped 759K. During the same time, the economy added 664K jobs, suggesting that 95K people who saw their benefits expire are still without a job.
4) As in other recent downturns, working men fared worse than working women during the financial crisis. This is a departure from the ’60s and ‘70s when the unemployment rate for women was structurally higher (see chart). The current unemployment rate for women is 7.3% versus 7.7% for men. During the worst of the recent recession only 9.0% of women were unemployed, compared with 11.2% of men.
5) Fewer people quit their jobs in April than in any other month since the end of last summer. According to the BLS’s count of job “losers” (no, we did not coin that term), 16.5% of those were due to job “leavers,” or those who voluntary gave up their position. This is the lowest percentage since the end of summer 2012 and nearly a third of the long-run average of 35.0% (see chart), indicating a slowdown in consumer and worker confidence – after all, who is going to quit their job without some basic level of faith in the labor market and in their own personal economic standing?
6) Peak numbers of new labor force entrants will continue to prevent faster improvement in the unemployment rate. In April 1.3 million people entered the labor force for the first time, comprising 10.9% of the country’s total number of unemployed people (see chart). In fact, the number of “Virgin” labor market entrants spiked in late 2008 and has exceeded 10% of the total unemployed population since January 2012. Most new entrants tend to be college graduates and former members of the military, meaning this trend is bad on 2 counts. First, it’s further evidence that recent college grads are struggling to find work, as employers tend to hire those with more skills (less of a gamble). And second, the government projects another 1 million people will transition out of military service by 2015, amplifying the labor force during a time when the economy is creeping ever so slowly towards a “normal” unemployment rate.
7) At the current pace of job growth, it will take us another 2 years to get back to full employment. The economy added 165K jobs in April and it would to do the same for the next 24 months in order for the unemployment rate to fall to 5%, which historically has been the Fed’s target. Of course, this is assuming the labor force doesn’t expand, which as we’ve briefly highlighted above, there is certainly room for expansion.
8) The typical unemployed worker has been out of work for 9 months. While the average number of weeks spent unemployed peaked at 40.7 at the end of 2011, the current average of 36.5 weeks isn’t even in proximity of the long-term average of 14.9 weeks (see chart). Additionally, the decline has been choppy, refusing to show consistent improvement. And note that the worst it ever got during other post-WWII downturns was an average of 20.5 weeks unemployed in 1983.
9) On a positive note, the number of reentrants to the labor force stands at a 4 year low. Last month, 3.2 million people rejoined the workforce, which was the least since April 2009. Historically, the number of labor force reentrants seems to indicate a weak economy (see chart), as people likely need to supplement family incomes during economic downturns (for example, stay-at-home moms who go back to work). The recent downtrend is a good signal because it not only suggests that fewer people need supplemental income, but also it means less competition for available jobs (fewer people in the workforce = less candidates for open positions).
10) And also on the bright side, for those who are currently working, earnings are higher than ever. Adjusted for inflation, the average worker earned $23.96 an hour in April, more than a buck higher than the year-ago month and $2 more than during the depths of the recession.
We concluded with 2 sort-of good signals, but the majority of our analysis shows the labor market remains stubbornly resistant to improvement. Monthly employment growth has firmed as of late, but with all those people still on the sidelines (discouraged workers, part-timers who wish to work full-time, etc.) we expect the unemployment rate to be sticky for quite some time.
There are plenty of people waiting to jump in, once they perceive an improvement in their labor market prospects, lending a case against all this speak of Fed tapering just yet.
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20 minutes to go. Can we get fiat green on the day?
No. Not that it's relevant to the job picture. Or... is it?
We will need some strong data to turn this economy around.
Still losing jobs at a rapid rate - http://www.dailyjobcuts.com
Wonder what / if anything will be introduced to turn it around
It's all about strong data. A strong economy is overrated! As long as we have data, we are safe. /s
What is this reality, of which the author speaks?
It's some kind of conjectural universe, a construct of those who think using their stomachs rather than frontal lobes. It needn't muddle our ambitious calculations and clear mathematical proofs. /s
Reality is verification-transcendent.
There is no fact of the matter as to whether or not a reality even exists.
"There are no facts, only interpertations." ~ Friedrich Nietzsche
Probably the most profound, insightful, and futuristic comment of the day, week, and year... "as long as we have data..." Not unlike being in the deep jungle saying, "as long as we have dry firewood..." thank you, sir.
"I pledge allegiance to the Fed of the United States of Bernakistan, and to the S&P 500 for which it stands, one ponzi, under Federal Reserve Notes, with debt-serfdom and food stamps for all. " - Michael Kreiger
This is nonsense. It's based on gov data.
Sure. Point #11 as not shown above: All statistics are those of the fools in power at the present time. Therefore, the actuality is larger than it appears in your rear-view mirror.
Oddly enough, statistics are more accurate when republicans are in the white house.
Or, I guess it's that the MSM won't let republicans lie.
Not that I dig the republicans all that much.
This is true, history shows that as prices rise, so do the mkts. It's proved and behooved.
#1 unreported reality = The Truth
~~~
As it turns out, the 'shovel ready' jobs were to bury the real stats underground where nobody could find them...
Actually here in the Northeast we are seeing more roadwork than any year since the great recession. I think they are finally burning up the last of the TARP money..... shovel ready took a few years.....
Maybe they took the TARP money & bet it all on the S&P... Now they'll have enough to dig a hole, fill it back up again, & pay someone time & a half to eat a sandwich & watch...
...to eat a sandwich & watch porn.....
on their iCrap....
in truth the truth hurts ...your re-election chances, your bankster bonuses
far better you fiddle the books, global accountancy practices oblige for a fat fee, and lie about the economy ...and we all believe Bernanke is not King Canute but The Wizzo of Oz (economics) who can turn the tide of the trade winds by blowing bubbles out his arse from Washington to enrich the entire nation
I've heard of wishful thinking but these policies wouldn't pass a Doctor on the 'Totally Deranged' section of a funny farm!
But there's something massively wholesome about the Feds public-private monopoly on money, their Govt mandate to bail out gambling bum losers in banking, and them fulfilling their mandate....ok you missed (failed miserably and completely) your mandate to regulate the banks and ensure their ongoing health, but hey, Plan B time, bail the village idiots of New York out and let them continue gambling while the QE bill mounts up for your errors of judgement and not allowing the free market to cull the shit
shit happens, prop up the shit, great economic policy that
then you have JP Morgans monopoly on issuing food stamps which climb every month in direct contradiction of Bernanke's words he's "turning it all around" with something quaintly mis-named "QE"... it's "debauching the currency" in English Ben
bwankers are as wholesome as wholemeal bread ...yummy (puke)
Gator, trees are being planted in residential neighborhoods all over Western Queens via municipial contracts / Bloomberg's "Million Trees Planted". We were supposed to get them about five years ago. IMO your thesis is accurate!
the governments reporting agencies are very good at snow jobs.....................
Maybe you should double check, I hear if you double back and come from the other side, the shovel readys are there a waitin.
It's important that one should only wish to join the workforce if being unemployed is decidedly unfun.
even wishing you had a job is now qualification for the Govt to strike you off the unemployment register ...to keep the numbers down, i mean 'accurate' you understand ....ahem!
you're young and you got your health, what you want with a job? [/Evelle]
This report is entirely too optimistic.
But your average wage is up! Don't you get it?
(me either)
and hamburger is $6 a pound. Make more money, see more money leave the wallet faster than it comes in.
Whatsup with miners today??? Hecla up 11%?
http://www.youtube.com/watch?v=bohVV_KlSHw
Don't be stupid people...If everything is so wonderful why does the Fed have to prop up Wall Street and the Banks at $85 Billion a month with your money.
man what a downer you are
yeah truth is a bummer, tick delusion, hopium, deflection and outright lying, its standard operating protocol in politics
politicians' only goal is to get reelected, it's their job.
Retirement confidence seems to follow the trends of the global economy. At least, that’s according to one recent survey that looked at 12,000 workers and retirees in 12 European, North American, and Asian countries, including France, Germany, Hungary, Japan, the Netherlands, Poland, Spain, Sweden, China, the United Kingdom, the United States, and Canada—making this one of the largest studies of its kind.
The study found that 65% of the participants believe future generations will be worse off in retirement than they are today; more than half of the American workers (55%) feel that way, while 80% of the workers from France and Hungary expect future generations to be worse off.
http://smallbusiness.yahoo.com/advisor/u-retirement-confidence-way-down-...
These writers eveidently did not get The Memo.
How did this heretical article squeak past the censors?
Another of the great lies and cover ups is that there are prolly three times more unemployed and out of work because there is no work, than what is actually reported. Downturn? No, as always, most of reality is reported late. The world was downturned when it was convinced that is is normal to condone the murder of innocents so a certain zionistia/bolshevistic evil can profit from war making. Being the created trigger for a greater world war three is not something to be proud of, rather a nation that knowingly walks into the puppeteers trap of being the actual trigger deserves what comes from those who are so deceitful they have cleverly deceived themselves. This is what they do to take the attention away from what are the real ongoing cover ups going all the way back to the boston hoax and bombing drill they created.
http://rt.com/news/syria-un-rebels-peacekeepers-hostage-910/
How many blatant scams have accumulated on the lists of the worst nations leaders in the entire history of America herself since the sandy hoax? Truly, when the history book is written later, the present babylonian world empire of the money god will be forever known as the very worst corrupted govt to have ever existed in the well known earths history. Invest in that!
In other news, RT has hired Larry King.
Tells me everything I need to know about RT.
what that they are moving further left?
BLS, et al is a farce. Just look at Shadow Stats website for a true picture of the current labor malaise.
Not necessarily true if you comprehend that "BLS" means Bureau of Lies and Statistics.
The BLS should just drop the L out of their initials.
BS numbers is what they produce.
actually the BLS is accurate, it has U6 at 10.9%. Spot on that if you ask me as to a true level of USA unemployment. .
Friends, Is there a way to query one or more of the fed database(s) to get payroll witholding receipts? Weekly or daily? Wouldn't this be a better way to gage the recovery?
The Fed offers an Excel add-in, which queries their FRED database:
http://research.stlouisfed.org/fred-addin/
Thank you!
Average earnings are higher than ever?
God, I can barely stop laughing long enough to type. Take out the top wage earners and what do you get.
90% of the available jobs outside health care and government pay less than $10 an hour.
I wonder what happens to the numbers when you take away all the new government hiring since Obumbler took office.
"It's HUUUUGEEEE AH!"
We need to see layoffs not just among low-paid workers, service workers, temps and part-timers but in the fields of middle management, government, technical staff and unionized resource industry employment.
THOSE people are doing the spending and borrowing that keeps this phony "recovery" meme going. They're fat and sassy. Their high wages - protected from competition via government's "minimum wage" edicts, "seniority" rules, tariffs, monopoly-granting, "collective bargaining" laws etc., are depriving the rest of us of jobs...
You see - not only banks are dependent on government for their survival...!
Stop with the hateful use of facts to try and undermine a constantly improving economy (completely sustained by a continuous supply of hopium, paid for by all future taxpayers).
Pathetic article because if the ratio of disability recipients was what it was in 1968 ( 1 in 51 if I remember correctly) instead of 1 in 13 at the moment, then there would be an additional 7,5 million unemployed,
How can the writer miss the greatest of frauds on the unemployment figures?
It is well known that the states have pecial teams pushing the unemployed onto disability pensions which are fully funded by the federal govt as opposed to unemployment benefits which are funded jointly by states and the fed govt.
Robert Rubin? Is that you?
'the average hourly wage is $24".... which includes Jamie Dimon who makes much more than me.
only $24 an hour? that is less than $50,000 per person. I don't know about people here but I net around $1500 a week and have meeting monthly expenses. I have credit card debt but that is reality especially when you are single -- I have no wife, child, parent, or even pet to support.
6k per month net is plenty to support a single person ANYWHERE in the U.S..
You are a spendthrift, that's all. Which is great; keep spending!!!
However, the median *household* *gross* income in the U.S. is 50k per year. So your reality is a very unusual one.
RE:
90% of the available jobs outside health care and government pay less than $10 an hour.
Where exactly? in rural arkansas?? How can one person live on $10 an hour even in a cardboard box
anyone been to the grocery store lately? Its humiliating.
They do what the poor have always done - share domiciles and expenses. A young woman I know just moved into a 4 bedroom house with 11 other people in it.
Aggregated NFP numbers - jobs data without the hype
Employment data aggregated January to April 2013
I haven't seen the jobs numbers (NFP's) totalled up by month anywhere else, so I thought I would do it.
Household Survey
Total 274,000
Part time jobs 143,000
Full time jobs 131,000
Average 68,500 jobs per month
Establishment (business survey) - the numbers that get quoted in the media headlines
Total 754,000
Average 188,500 jobs per month
The difference between the two reports
The difference of 480,000 between the two reports can largely be accounted for by :
1) The Household survey does not count people who start a 2nd or 3rd job (291,000)
These are almost exclusively low paid part time jobs.
2) Overstatements on the BLS Birth/Death numbers of around 133,000.
http://ian56.blogspot.co.uk/2013/05/business-start-ups-bls-birthdeath-model.html
The job number details by month
https://docs.google.com/file/d/0B3QiiNVim6gZV2FkYUxISXpCQWM/edit
Barron's economic indicators (the blue line)
http://www.demeadville.com/baro.html
The economic indicators have taken a dramatic turn for the worse since March, particularly in the last 3 days.
http://ian56.blogspot.co.uk/2013/05/aggregated-nfp-employment-numbers-for.html
So far this year :-
131,000 full time jobs have been created
141,000 part time jobs have been created
291,000 people have taken an additional part time job (291,000 more multiple job holders).
This gives an increase in total wages of around $9bn.
However the Fiscal Cliff deal imposed tax hikes of $200bn on the middle class and below.
So far this year taxes have risen by $66bn
Disposable incomes have declined by around $57bn so far this year.
It is hardly surprising that the latest economic data indicates that recession is not far away.
http://www.demeadville.com/baro.html
Other factors
Hours worked is the same as January so there is no difference.
Inflation in basic necessities is higher than wage rises, particularly in things like food and gas.
The $57bn decline in disposable incomes is a significant understatement.
Labor rates will continue to be pressured by the huge over hang in the global labor supply and by increases in real unemployment.
Real unemployment has gone up by around 330,000 people since the start of the year.
(Only 272,000 new people have found jobs and 150,000+ jobs a month need to be added for flat unemployment due to population increases.)
When Obamacare is fully implemented from October 2014, it will take around $300bn out of middle class pockets.
As more people become aware of the expected 30 to 100% rises in Healthcare premiums next year, they are likely to start saving up for it and reducing their spending.
We have already seen a decline in credit card debt of around $9bn recently.
Things are going to get much worse in 2014.
Appendices
NFP payroll data. Jobs numbers without the hype.
http://ian56.blogspot.co.uk/2013/05/aggregated-nfp-employment-numbers-for.html
.
While I'm glad ZH is covering the topic on unemployment, this post is so screwed up I don't know quite where to begin.
I guess my main objection is using the "BS" BLS as a resource, because these numbers are so unrelated to reality, the measure of our "actual" unemployment problem is much, much worse that the Obama administration will admit to. IMO this fits in nicely with the rest of what they're doing (which is to obfuscate truth; why do you think Obama has prosecuted TWICE the # of whistleblowers than ALL other administrations combined? Answer: they must be hiding an enormous number of things which if we knew, we would revolt).
But staying on topic, John Williams at Shadowstats reports the truth: http://www.shadowstats.com/alternate_data/unemployment-charts
If you take John's numbers, unemployment is about 23% and climbing. 160k added jobs per month will do nothing. We need something like 500k. Where's the plan to get there because I haven't heard one.
About the only thing the government is doing is repeating the same mistaken belief that if they keep pumping up the markets by printing $100 Billion a month, somehow this will magically transcend to an improved economy.
It hasn't worked yet, because it won't work. And as many other programs this administration has created, it's not actually designed for the purpose stated in the PR (i.e. "HAMP" and "foaming the runway" for the TBTF banks).
What their end game is I'm not sure, but it probably involves crashing the Dollar to evolve to a one-world government. As Joe Biden recently was quoted, "We need a New World Order" http://www.examiner.com/article/vice-president-joe-biden-calls-for-a-new...
To summarize, this post is pretty much gigo (garbage in garbage out). The measure of the Fed's success is the unemployment rate which is off about 350%.