Dissecting the NonFarm Payroll Data
Today’s NFP data was surprising — both to the upside and the downside. 20,000 jobs were lost in January, below the consensus. But everywhere else, there were surprising improvements.
Is it possible that those people expecting a mediocre recovery and weak employment picture — including me — might be pleasantly surprised? A closer look suggests that many people may be underestimating the recovery.
Consider the cyclical progress that occurs as a recovery takes hold: Revenues improve, followed eventually by greater Profits. Companies have been doing capital expenditure spending first . . . and only hiring when they have to. Greater hiring leads to greater spending.
So far, we have seen the revenue improvements, and the beginnings of better profits. Various tech firms (Cisco in particular) are seeing improving CapEx orders. Temp Help has improved, and some firms are actually hiring.
Ask yourself what outcome would surprise the most people — the economy sliding in a double dip recession – or a stronger than anticipated recovery?
Here are some other data points beneath the headlines:
Positives
1. BLS reported that in January, persons unemployed “due to job loss” decreased by 378,000 to 9.3 million. That is a decent number. And, “nearly all of this decline” came from the “permanent job losers.” (See table A-11.)
2. The Underemployed – Persons who want full time jobs but working part time instead — fell from 9.2 to 8.3 million in January. That is an enormous improvement. (See table A-8.)
3. Temporary help services added 52,000 jobs — that is a leading indicator of future hiring. (See table B-1.) Since the temp help lows in September 2009, temporary help services employment has risen by 247,000.
4. The Household survey showed growth of 541,000 workers. In a recovery, this tends to pick up new employees (especially at smaller firms) faster than other measures. The Household Survey isn’t “large firm ” biased the way the Establishment Survey is.
5. After experiencing steep job losses earlier in the recession, job losses in manufacturing has moderated considerably.
6. Retail trade employment rose by 42,000 in January, after showing little
change in the prior 2 months.
Negatives
1. 2009 benchmark revision reveal employment in 2009 was far worse than originally believed — revised data showed nearly 600,000 more jobs lost than previously reported.
2. The number of long-term unemployed — jobless for 27 weeks or longer — is still rising. Since the December 2007 start of the recession, long-term unemployed has risen by 5.0 million. (See table A-12.)
3. NiLFS — Not in Labor Force — rose 409,000 to ~2.5 million persons. They are also called “marginally attached to the labor force” — not in the labor force, want and available for work, and had looked for a job sometime in the prior 12 months. (See table A-16.)
4. The average workweek for all employees on private nonfarm payrolls are still near record lows — 33.9 hours in January.5. 1.1 million discouraged workers in January is a huge increase of 734,000 from a year earlier. (Discouraged workers are not currently looking for work because they believe no jobs are available for them)
6. Revisions continue to be negative. December 2009 was revised downwards to 150k loss from 85k.
De.li.cious
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February 5th, 2010 at 10:20 am
“Retail trade employment rose by 42,000 in January”
Read what you want, but the number employed in retail does not go up after Christmas while stores are being shut down. Where do you think those people are working? Out of their cars?
Further, if the number unemployed rises while the employed ratio moves in a positive direction, the only answer is a downward revised population number… which means payrolls must be less, too.
February 5th, 2010 at 10:24 am
BR, if you post some charts superimposing the numbers before and after revisions over the past 18 months I’ll double what I pay you.
February 5th, 2010 at 10:28 am
The problem is all the analysis of the numbers depends on their accuracy. And we have seen how screwed up they have been over the past year. I doubt they tell us anything either way.
February 5th, 2010 at 10:31 am
They key thing right now is this: we had a bump in manufacturing last month that everybody agrees is largely due to inventory build. That means companies borrowed money to refill pipelines and restock shelves. That was counted as a ‘positive’ for the economy. However, if consumers don’t pull that inventory off the shelves, it becomes a negative very quickly.
So the basic question for the employment report is whether there is any indication that overall net personal income will be increased by the employment changes. A double-dip hangs in the balance.
February 5th, 2010 at 10:34 am
@Wally
Except we had much stronger than expected retail sales in Dec and Jan.
February 5th, 2010 at 10:36 am
I liked this posting
Unemployment number decline is all about seasonal adjustments: Credit Writedowns http://bit.ly/bzI1RR
February 5th, 2010 at 10:39 am
9.7% is the SA number. The NSA number posted a huge jump, to 10.6%.
Now, normally, I’d look more closely at the SA number, but in a time of great economic change, during a period where the benchmark is revised, and during a month when seasonal adjustments tend to always be huge, the NSA number may be more relevant.
February 5th, 2010 at 10:58 am
“Ask yourself what outcome would surprise the most people — the economy sliding in a double dip recession – or a stronger than anticipated recovery?”
If you listen to/read the Mainstream Financial News Media the answer would be the first choice
“the economy sliding into a double dip recession”…
February 5th, 2010 at 11:00 am
Awesome question: “Which outcome is the greater surprise”. I know what I believe, not that I could defend the view. I would more surprised by the stronger than anticipated recovery.
February 5th, 2010 at 11:03 am
Was that an Irish coffee this morning BR?
Participation rate is borderline CRASHING. This report was a complete disaster:
http://market-ticker.org/uploads/2010/Feb/participation.png
U6 is 18% (comparable to the way unemployment wad calculated back in the 80′s and earlier) and rising.
Don’t turn into a book-talker BR. You’re better than that buddy!
February 5th, 2010 at 11:05 am
I think this is a great post but I am noticing a few trends which could be interesting.
First the number of persons unemployed due to job loss is dropping, but the number of discouraged workers is rising (at a greater rate) so the question is do we attribute the drop in unemployment to those workers getting jobs, or those workers giving up and leaving the work force? The difference between the two could not be more significant.
Temp hiring is up (which some consider a leading indicator to hiring) but if I was working in a factory for 20 years, then was laid off, worked for a temp agency for 2 years and was eventually re-hired, do you think my new purchasing power will compare to my old?
The last point is that as lawed as many of us think these numbers are that does not change the fact they LOTS of people still trade on them so their accuracy is only relevant in the longer term horizon.
Just some thoughts, I am sure they are full of holes.
February 5th, 2010 at 11:10 am
BR, I know the work week is still near record lows, but it was up more than 2% for January.
Shouldn’t that go into the positive’s column? Expectations were for a flat work week but instead it was up 0.7 hours/week.
~~~
BR: Maybe — its such an incremental change, I couldn’t get too worked up over ti.
February 5th, 2010 at 11:17 am
The labor force participation rate down .3% This is a huge drop that explains why unemployment went down – people are dropping out, not lots of new jobs.
U6 NSA is huge. We’re screwed.
February 5th, 2010 at 11:19 am
“The Underemployed – Persons who want full time jobs but working part time instead — fell from 9.2 to 8.3 million in January. That is an enormous improvement. (See table A-8.)”
It looks like this would be good, but how much is it really the seasonaly adjustment? Yes, in January there is a big Seas. Adjustment which happens every year, but we also know that these adjustments are heavily wheighted on last years change, therefore, the seasonal adjustment might have been exagerated because last year the situation was pretty terrible in Jan.
I am skeptical about this number and the S.A. There might be some improvement, but I wouldnt bet too much on it yet.
February 5th, 2010 at 11:19 am
I don’t think there’s even a way to spin this as even slightly positive. Headline number is a complete joke!
February 5th, 2010 at 11:20 am
Re. positive #2:
Seasonal adjustment in Jan 10 and Jan 09 reduced the number of “Part time for economic reasons” by almost
a million workers each year, versus NSA for the same months. That’s a Jan seasonal adjustment of >10% of all workers of this classification. Holiday hires notwithstanding, the NSA month-to-month variation has never been large enough to warrant a Jan seasonal adjustment this large. See e.g. NSA numbers for this class, Sept-Dec. This appears to be simply a bad seasonal regression adjustment for Jan.
See data for last ten years http://www.bls.gov/webapps/legacy/cpsatab8.htm
Re. negative #2:
The 19% increase in NILF is YOY, not MOM. MOM change was just 53K.
http://www.bls.gov/webapps/legacy/cpsatab16.htm
February 5th, 2010 at 11:21 am
@ Mike in NOLA – on the money there with that thought/observation. This post is nothing other than a huge setup by BR to challenge our thinking. With the set-up of his question of bigger surprise, he conveniently left out a third option, which is rather than “sliding into recession” we are only pausing into total depression. Seems that with all of the manipulation of “official” numbers, we really have no idea where we are nor where we are headed. Follow the money – in whose best interest is it to prop and support the numbers? I dare say, those in charge of the report of “the numbers.”
February 5th, 2010 at 11:24 am
Just a small semantic point: what should be December U3 number now be? Because nobody gives a shit about snapshots, particularly from a badly out-of-focus camera.
Only the trend matters.
Was “corrected” U3 9.6 in December, 9.7 — what? THAT is the question everybody should be asking right now.
Context please. I like my reality fine-grained, thank you very much.
February 5th, 2010 at 11:30 am
“Retail trade jobs grow in January”, that is a headliner. It’s a shame when we lose 20,000 jobs and the unemployment rate drops. Could this be due to the increase of discouraged workers to 1.1 million form 734,000 from a year earlier? Bloomberg notes that this week is the first time Labor Department issued data on earnings and hours for all workers with an average weekly earnings of $761.06. That puts the median income at $39,979 which is a 27% drop from the Census Bureau reported median income of $50,000. The great recession drags on …
February 5th, 2010 at 11:32 am
Barry seems to be looking past the elephant in the room – the disappearance of 1.4M jobs the BLS created with their methodology and pointing to the mouse in the room – the semi OK short term estimates made by the BLS using the same methodology that their own trueups prove to be inaccurate.
If you look at the BIG PICTURE there are many fewer people with paychecks to spend than the BLS has been telling us.
The next leg in the jobs drama will be large scale state and local layoffs
February 5th, 2010 at 11:32 am
The birth death model took away 427,000 jobs in Jan10 vs. 356,000 i Jan 09 (NSA). This could also be a factor in the data.
If the economy is in fact in the beginning stages of recovery, then the BLS model might be overstating the “deaths” in January 2010.
Yes, I know, that is a big “if”.
February 5th, 2010 at 11:33 am
Forgot to paste the web site.
http://www.bls.gov/web/cesbd.htm
February 5th, 2010 at 11:40 am
As an aside, one thing I have learned from reading comments over this past year is that the “politically correct” thing to do nowadays is to downplay any positive news by calling those that produce the news, liars and cheats. Go figure.
That aside, the report isn’t all that surprising. The recovery is as predicted by many, sputtering and full of a lot of potholes. It will have a lot of ups and downs, many confusing. It will take time before there is any real confidence in the economy, of course all the “sky is falling” rhetoric isn’t helpful, even if at times it is appropriate.
Barry, I think it would be interesting to see charts trending the various groups affected. What I have always found interesting is the wide disparity between socio-economic groups. Who is recovering and who is being hurt, for instance I noticed the African-American unemployment rate actually increased. Why is that?
February 5th, 2010 at 11:50 am
Casual- Skepticism is not the “politically correct thing”. It is a Darwinian feature built-in to every human being. Suppress it at your own peril.
The numbers are terrible. Get over it. The recovery is just .gov printing trillions and desperately pouring it into the economy. And it’s not enough. We’re in deep trouble. “Saying we’re not” is really not going to do a thing but prevent people from taking the necessary steps towards rectifying the situation.
IOW – .gov is buys trying to get reelected while the whole thing is collapsing.
February 5th, 2010 at 11:54 am
My take on this whole fiasco is this:
TPTB basically adjusted the Census Bureau population #’s to caue a ‘reset’ so that the next few months of unemplopyment deterioration will look like it isn’t getting any worse (ie – the next 3 months it creeps back up to 10% – “at least it’s not getting worse” they’ll say…). I see this as terribly bearish and a sign that .gov expects the REAL underlying numbers to get worse not better in the near term.
February 5th, 2010 at 12:20 pm
I’m a little baffled when it comes to this good news. After all, over the past 12 months the BLS has underreported the job loses by an average of 51,000 per month (revised numbers were 617,000 higher than first reported in 2009). So if we use the same 51,000 revision for January 2010, that would mean that there were 71,000 jobs lost, which isn’t so pretty. http://www.bls.gov/news.release/empsit.nr0.htm
Also, I think BR is starting to smoke some of those green shoots, since he sees so much to be happy with in a dismal report. It was my assumption that the US had to create 120,000-150,000 jobs a month, just to break even with job entry increases from immigration and school graduation, etc. So if you add the 135,000 (mid high/low) jobs that needed to be created to the 71,000 that were likely lost in January, that equals a shortage of 206,000 jobs for January alone. Yet the unemployment rate is improving?
And how the hell do a million part-timers become full-timers in a single month? That’s absolute nonsense. But what do I know. I have to go with the flow………of bs…………..
February 5th, 2010 at 12:22 pm
As an aside, one thing I have learned from reading comments over this past year is that the “politically correct” thing to do nowadays is to downplay any positive news by calling those that produce the news, liars and cheats.
I’ll cop to having to struggle against knee-jerk cynicism. I’ve definitely seen myself boil over into irrational in my comments here the past few weeks.
I’ve been working on taking a few Zen deep breaths. Even the shills have a valid point: don’t fight the tape. If a bullish case can be made, so be it. If many people think the normal recession recovery playbook applies here, fine. Not my problem. But also I shouldn’t give in to needing to feel too certain about my opinions either.
I am angered by the magnitude of the BLS correction today. But it’s all about the S/N thing. I’d like to see the revised U trendline to get my bearings.
February 5th, 2010 at 12:29 pm
I’ll be quite interested in seeing what the census says about our population. The non-institutionalized population has dropped quite a few times during this recession with this month being quite a large drop. If this base number is off then that would throw everything else off as well.
February 5th, 2010 at 12:39 pm
The golden truth is that the Fed is going to be forced to embark on a money printing operation that will blow our minds. It will be interesting to see what kind of smoke screens they put up in order to mask the truth. At some point this nasty short-squeeze rally in the dollar will rip in reverse and the rest of the world will flee from the dollar the way they are fleeing from the euro right now. When that happens, gold will finally become the ultimate safe haven investment and those who poo-poo it now will be left chasing a train that leaves the station suddenly, quickly and with a sharp move higher.
http://truthingold.blogspot.com/2010/02/us-is-in-worse-shape-than-any-other.html
February 5th, 2010 at 12:52 pm
[...] Drop in unemployment rate aside, this has been the worst post-War employment recession. (Calculated Risk also The Reformed Broker, The Pragmatic Capitalist, EconomPic Data, Economix, Big Picture) [...]
February 5th, 2010 at 1:00 pm
zebov Says:
February 5th, 2010 at 12:29 pm
I’ll be quite interested in seeing what the census says about our population.
I agree. I suspect population growth slowed considerably as immigration slowed and many workers (such as in construction) returned to their homelands. In my opinion, this would be a negative for the economy since it reduces demand for everything from housing & rentals to autos to consumer goods.
February 5th, 2010 at 1:02 pm
Seems to me the unemployed and underemployed are now the closest ripples to the splash. Those on the outer ripples out there drinkin’ Ripple are out of the picture.
It isn’t realistic to expect employment to return to what was considered “normal” or “healthy” or “acceptable”, not in this environment…
The unemployment “situation”
It’s damned impossible. So create a new sample and context for the “New Normal”.
This number is for and involves the employed, the underemployed, those who have lost their jobs in the last 6 months or whatever amount of time the desperation threshold is.
We are forming a new jobless, opportunity-less class while trying to slow the momentum of those who are on the verge of falling there. That is until someone invents the internet again… and people can reside in the websites.
Hell, what did we think was gonna happen?
February 5th, 2010 at 1:03 pm
@Joseph Martinez -
Regarding the Census Bureau median income, I believe that ~$50K/year value is for *household* income – not individual. I don’t have the original source links handy but I’ve looked at those numbers a lot over the years and I’m 90% sure it is a household, not individual value.
February 5th, 2010 at 1:03 pm
Sorry…
The unemployment “situation”…
http://www.tradersnarrative.com/unemployment-throws-cold-water-on-rate-hike-talk-3446.html
February 5th, 2010 at 1:20 pm
Maybe it is time for the government to stop funding programs that are hoped to return us to ‘normal’ and instead to understand that the ground has shifted.
February 5th, 2010 at 1:33 pm
well, since i do my own analysis, i really don’t care
temps, well, you just talk too who’s hiring, banks and mortgage companies and telco’s, banks files are still so f’n f’cd they need help just sorting shyte out, nuff said, telco’s refuse to hire anymore folks, thus, it’s cheaper for them
cars cars cars cars cars, we’re at a cycle of aging cars so this one should stabilize a bit, clunkers helped get a bump, yet, replacement mode, a large number were fleet buys, means shyte’s just old, will consumer be next, doubtfull, imho don’t personally know a soul looking for one, 2-3 trying to get rid of big payments though
construction, my forte’, lol, 75k laid off, folks these are high paid guys, who will go in direct competition with you, always last ones to go and first ones too compete with limited supply, they will lower prices in the sector, take beazer, xyz company does roofs for 5k, beazer wants 50 roofs, they set the new price at 4k, give old favs who use to do em at 5k 1/3 at 4k, and give 3-4 new guys a half dozen each, now extrapolate that out to every form of construction you can think of, construction is as specialized as software programming
states and muni’s still laying off
hiring, where, who, how much………….nope meese ain’t biting
we’re getting close too negative feedback loop imho, too many gubment worker too high pay, supported by diminishing private high pay
February 5th, 2010 at 1:38 pm
@EAR
“We are forming a new jobless, opportunity-less class while trying to slow the momentum of those who are on the verge of falling there. That is until someone invents the internet again… and people can reside in the websites.”
I think you have succinctly addressed the crux of the problem. What I have been witnessing is that those with limited or no skills have been increasingly pushed out of the marketplace. One personal metric I use to gauge the health of the economy is to watch the number and type of internal job listings on the website of the company I work for. (medium’ish global company) What I have seen is that the lower level positions disappear very quickly, but there are a number of specialised skill sets that have had unfilled openings for the better part of a year.
IMHO the ultimate “solution” for a growth economy is to build a much more educated workforce and to emphasize those areas of the economy that can use them. In my ideal world we would shift away from a service economy to an investment one. Of course that is long term and in the short term there is a lot of pain to be had, mostly for those disaffected that don’t have the skills.
@MayorQuimby
It’s not a matter of needing to “get over it”, nor is there some kind of darwinian spin on this, whatever that ultimately means. What I see out there is a a lot of anger and fear. Anger/Fear can be helpful as they make us sit up and pay attention, but eventually more than pointing fingers has to occur for there to be a reasonable discourse that leads to change. Often I see the comments are used to incite rather than provide insight.
February 5th, 2010 at 1:41 pm
Bottom line – Americans consume too much.
Too much for their health, the health of the earth and now the health of their own pockets. Young people are just not into it. Under 23, maybe even 27. What if a real shift is just starting to take place. Less is better. Get rid of the crap, set yourself free. If we all cut back, on average just 10 percent of purchases…what does that do to the S&P500?
Avatar. What’s that message? One with nature. I have heard of some young people who are contemplating committing suicide because they can’t go and live on Pandora. WTF???
This is the 21st century…IMO, we are not going back to the 20th.
“Ask yourself what outcome would surprise the most people — the economy sliding in a double dip recession – or a stronger than anticipated recovery?”
Surprise is something we really do not expect. How many 10′s of millions expect that we are OK from here, bottom behind us? How many millions more expect that the sh*t will hit the fan in do time? So what really would surprise us? That we don’t expect?
Are Americans going to wake up and realize that hoping for a dead-end boring life sucking job is not something that really makes them jump up and shout with glee? That would surprise me.
What would surprise you?
February 5th, 2010 at 1:57 pm
Keep thinking positive BR, and keep pouring your cash into a falling market. Retail doesn’t hire in January. Go into any mall in January and its usually empty. You will find old folks walking the halls for their exercise. Nobodys buying in January, their christmas bills are hitting their mail box. The shock is about to take hold. They spent again more they can can afford.
Gatsby got it right. When people stop looking for work or their unemployment benfits run out, they are no longer counted. They don’t just simply disappear into thin air. These are still unemployed americans. Where’s the numbers that show how many have lost their benefits. The negatives above outnumber the positives. However the positive are what the government wants you to believe. Looks like the market isn’t buying those numbers.
I think we continues lower. Money managers don’t want to answer to their investors a second time on why they failed to see the second wave down.
February 5th, 2010 at 2:00 pm
See this as well:
The Conference Board reports that online job demand jumped in January from December:
February 5th, 2010 at 2:58 pm
The ADP numbers seem to indicate this report is a sham of seasonal adjustment and B&D waving of the hands. Barry’s optimism is largely unfounded in my view.
February 5th, 2010 at 4:22 pm
Perhaps we are in a new conundrum where technology is advancing so quickly that productivity growth is now equal to or greater than GDP growth. The net result is no job growth.
Anyone care to think through the consequences of this scenario? Continued higher profits? Lower costs, ultimately resulting in more discretionary income?
February 5th, 2010 at 4:37 pm
Some cocktail napkin math.
The U3 unemployment rate rate is derived very simply, using a survey sample of 60,000 (Household Survey). But we’ve all seen the CLF participation rate dropping during the recession from a solid rate of about 66% to the present level of 64.7%.
The current estimate supposes a CLF of 153.1 million and total unemployed of 14.8 million. Divide unemployed by CLF and you get your 9.7%.
But let’s try to correct for the falling participation rate and see what happens. Multiply 153.1 million by 1.013. You get 155.1 million, our “corrected” CLF. Now, instead of vaporizing the missing 2 million “discouraged” workers, let’s go way out on a limb and count them among the unemployed.
So our basis for calculating U3 now changes to CLF of 155.1 million and unemployed of (14.8 million plus 2 million, or 16.8 million). 16.8 million/155.1 million is 10.8% “corrected” unemployment rate.
Taking a deep cleansing breath and letting today’s aggravating BDA revision go for the moment, it seems to me that it’s in the nature of a prolonged downturn outlier event to distort U3 precisely because of the data’s linkage to UI benefit exhaustion. The longer this goes on, the greater the distorted CLF.
For investment/market analysis purposes — hey, whatever Mr. Market does with the official U3 number he does. But for people struggling with the cognitive dissonance like me, this kind of ‘rithmetic helps keep the voices away.
February 5th, 2010 at 5:24 pm
[...] on double dip fears I suspect you will be disappointed with that decision a few months from now. As Barry Ritholz put it: Ask yourself what outcome would surprise the most people — the economy sliding in a double dip [...]
February 6th, 2010 at 12:53 am
Barry,
Any thought to comparing the BLS numbers with state income tax and sales receipt collections along with the Federal income tax and see if there’s any correlation? I would bet there’s little with the initial release and maybe a bit with the revised numbers. The painful reality thast no one wants to accept is that BLS “survey” data is probably useless.
February 6th, 2010 at 8:02 am
barry – you wrote “2009 benchmark revision reveal employment in 2009 was far worse than originally believed — revised data showed nearly 600,000 more jobs lost than previously reported.”
wasn’t it more than 900k worse than previously reported? are you planning a follow up post on these birth/death adjustments now that the actual data is out? i’m still somewhat confused as to WHERE these numbers actually show up – in what metric. in other words, the UI rate doesn’t just jump when the extra 900k jobs lost are suddenly counted.
February 6th, 2010 at 8:08 am
About the Employment #.
Have you factored in the Census temporary hiring this year? I heard they gonna hire 1.4 million people just to count USA citizens this year, like 3x the previous number. Obama must be deperate ….
Check this article. A complete Fraud from the Obama.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEws7wrt8FY0&pos=6
February 6th, 2010 at 9:53 am
The question isn’t what “would be a bigger surprise”, but “what is already priced into the market”.
February 6th, 2010 at 11:52 am
Wow!
I have never expected such a good constructive analysis from Barry Ritholtz — well known conspiracy theories perma-bear. You have surprised me Barry. I was completely wrong underestimating your abilities. You have definitely wised up over the years.
Thanks
February 6th, 2010 at 2:09 pm
Ah, dear Jurgen — heh heh — you underestimate me!
My approach is similarly unchanged: Read the data, Interpret what it means, figure out where its wrong and/or where the crowd is misinterpreting it. Apply that Variant perspective to an investing thesis.
My market positions have been flexible, with several well timed bullish calls (See this and this and this and this — you get the idea).
Perhaps it is you who has wised up —
And my views on conspiracy theorists consistent over the years — I’ve been pretty vocal they are nonsense:
February 7th, 2010 at 8:26 am
Tinkering with unemployment numbers:
http://www.scribd.com/doc/26493859/Is-the-Duration-of-the-Current-Recession-Distorting-U3
February 7th, 2010 at 2:34 pm
Most of the comments in this posting are assuming a static world from 2000-2007. This is not the case.
First, some have noted the fact that net immigration, legal and illegal is down. This was a major driver for net employment growth required to maintain a static employment situation.
Also note that folks deciding to retire early and take that SocSec and or reduced Pension have certainly increased (see below). Also take into account that normally folks decide to return to grad school or trade school or other training opportunities in recessions. Tack on the fact that alot of lesser skilled folks in 2 wage families might decide to opt out of the employment scheme (sexist maybe how many 55 year old women whose spouse/partner are earning 50k+ have decided they don’t want to take that crepe job at McD’s just to make an extra 1500 a month).
Our B and D as well as most of the employ/unemploy stats are established based upon a need for what, 100-150 k jobs just to stay static. Thus, if the assumptions in paragraph 1 are anywhere close to true, then yes our unemployment situation is and will improve dramatically. My anectdotal evidence for the above turns out to be relatively easy to prove. In my IT office of 25 folks, one decided to retire this year at 62 instead of facing a layoff. Net -1 unemployed. Anyother will retire June 2011, we are planning on rehiring that position. My niece of 24 yrs has finally found a job as a nanny for 35k a year for some Seattle MS techies, my other niece has just found a job at an NGO, a 3rd niece is going to quit her job as a financial advisor for a major mutual fund company and return to school to be a physical therapist, my unemployed nephew in San Diego has finally found 2 p/t sales jobs both could morph into f/t positions. Thus, of the 30 odd folks in my sphere of knowledge, 5 have resolved employment situations.
I’d recommend the folks who have bought into the meme of the world is ending (accurate 2-3 years ago) might want to reevaluate their positions vis a vis a changing and dynamic demographic world. We are at the very peak of baby boomers starting to bail out. As that accelerates the employment situation will change dramatically.
February 7th, 2010 at 3:10 pm
No, that is incorrect. If you retire, you are no longer in the labor pool. A retirement makes the Unemployment rate go lower.
Second, you are confusing cause and effect. Immigration doesn’t cause hiring to increaese. people emigrate to where the jobs are.