Breakdown: August 2011 NFP Data
Some asterisks on this job number, but overall, quite weak, and a continuation of the downtrend for the 4th consecutive month. This was the weakest NFP report in almost a year.
A Verizon strike is the key asterisk to this report — that shed 45k employed from the overall picture.
Lets breakdown the August data. The headline number was that job growth was unchanged in August, as was UE, but the details are where are the goodies are found.
Some specifics:
• Total nonfarm payroll employment, at 131.1 million, was unchanged (0) in August. Employment changed little in most major private-sector industries.
• Household survey shows the number of unemployed persons, at 14.0 million, was unchanged from last month;
• Involuntary part-time workers rose from 8.4 million to 8.8 million in August.
• 2.6 million persons were marginally attached to the labor force, up from 2.4 million a year earlier;
• Revisions were negative: June was revised from +46k to +20k; July was revised from +117k to +85k.
• Over the past 12 months, average hourly earnings have increased by 1.9%, which is soft.
• Average workweek for all employees edged down by 0.1 hour over the month to 34.2 hours. This is a leading indicator, and its discouraging.
• Manufacturing workweek was stable at 40.3 hours for the 3rd consecutive month; factory overtime increased by 0.1 hour over the month to 3.2 hours.
• Average hourly earnings for all employees in August decreased by 3 cents, or 0.1 percent, to $23.09. Also a leading indicator, also discouraging.
• Temp Employment Help services changed little over the month (+5,000) and has shown little movement on net so far this year. (Also a leading indicator)
• Sectors showing employment gains: Health care (+30,000), Mining (+6,000), Professional and business services (+8,000). Over the past 12 months, health care employment has grown by 306,000, and since reaching a trough in October 2009, employment in mining has risen by 144,000
• Information industry (-48,000) Manufacturing (-3,000), Government (-17,000). Construction; trade, transportation, and utilities; financial activities; and leisure and
hospitality were unchanged
• * the asterisk: Employment in the information industry declined by 48,000 in August. About 45,000 workers in the telecommunications industry were on strike and thus off company payrolls during the survey reference period.
Economist Justin Wolfers tweeted “Congress owns this report. But I’m even more worried about the September report. Debt ceiling madness has real consequences.” I am unsure how much the kabuki theater in July and August impacted this report — its more accurate to say that a misguided Congress, along with an inept White House economic team, owns this economy.
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September 2nd, 2011 at 9:26 am
Birth/death added how many jobs?
September 2nd, 2011 at 9:30 am
‘Congress owns this report.’
Probably so, but Banzai Ben owns the response to it.
Expect more futility: doing the same thing that didn’t work before, but on a larger and more reckless scale.
September 2nd, 2011 at 9:39 am
The stimulus runneth out. I hope no one was taken by surprise.
Happy Labor Day–if you’re lucky enough to labor.
September 2nd, 2011 at 9:47 am
Machine-
Yup. They are trying to inflate a balloon with an increasingly large hole in it.
September 2nd, 2011 at 9:53 am
87k added through birth death adjustment, and given that next month’s adjustment to today’s data would probably be downward based on most recent statistics, does that mean today’s number is actually less than 0?
September 2nd, 2011 at 9:56 am
Quimby,
“Birth/death added how many jobs?”
Net +87K.
September 2nd, 2011 at 9:58 am
Thanks Joe.
September 2nd, 2011 at 10:00 am
The Tea Party at work, what fun to wear those funny Colonial hats and shoot off muskets. Hooray for throwing sand in the works, hooray for home-schooled.
September 2nd, 2011 at 10:03 am
The Tea Party at work? How so? I believe you have your facts completely backwards.
Go find a total stimulus figure, look at total debt to gdp and then I double dare you to say we aren’t spending enough money we don’t have.
September 2nd, 2011 at 10:05 am
People need to change their optics.
8.5% unemployment is baked into the cake….as it should be.
When you have a productivity rate approaching 6% y-o-y, something has to give.
The ONLY thing that will change this scenario is housing/construction which I believe bottomed out this quarter.
We shall see.
September 2nd, 2011 at 10:21 am
The S&P 500 is still down only ~13% from its year high. Is that what passes for pricing in a recession these days?
Really, the Fed and its ZIRP & QE policies have rendered price discovery FUBAR.
September 2nd, 2011 at 10:28 am
I believe labor participation was up. That should be a plus on gdp numbers. No?
September 2nd, 2011 at 10:29 am
@WFTA
I basically agree, but I think the stimulus ran out a long time ago. What we’re seeing now is the impact of so-called “austerity.” We have stopped trying to create jobs, and now the GOP is actively pursuing cuts designed to destroy as many jobs as they possibly can before 2012.
Everything the GOP knows about politics and economics, they learned from Osama bin Laden.
September 2nd, 2011 at 10:31 am
I don’t think birth/death nets that way due to seasonal adjustment.
Also, you can’t assume that the 87k is all error, or that the error is in the direction you expect.
Also, given the scale of the survey and the recent revisions, the error component of the birth death adjustment is not likely the most significant misleading indicator.
September 2nd, 2011 at 10:36 am
Venn, since many parents find themselves out of work, isn’t “home schooling” sort of a natural choice? Between technology and offshoring, there just isn’t as much demand for labor these days as there used to be.
September 2nd, 2011 at 10:36 am
Reposting from a different thread for relevance:
As for Justin Wolfers’ tweet, someone should tell him that what we’re seeing today has been the cards since the summer of 2010. It only got locked in when this spring’s spike in gas and oil prices disrupted the pace of recovery.
If it helps understand the comments of economists like Wolfers, remember that economics today is roughly as advanced as a science today as astronomy was in the early 1500s. They really do seem to believe in “animal spirits”….
September 2nd, 2011 at 10:38 am
Can we please not degenerate into another I-label-the-party-I-assume-you-belong-to-you-label-the-party-you-assume-I-belong-to-fest?
Before blaming one faction of one branch of government, consider the decades it took to put in place the appointed and sanctioned regulatory bodies, rating agencies, financial rules, judicial oversight, accounting best practices and reporting standards.
Blaming Obama and blaming the Tea Party are equal marks of ignorance.
September 2nd, 2011 at 10:41 am
MayorQuimby Says:
September 2nd, 2011 at 10:03 am
The Tea Party at work? How so? I believe you have your facts completely backwards.
Yup they own it. they made it look like they wouldn’t do their jobs and would take down the US economy for political reasons. the debt maybe high, but the economy is in the tank. and they didn’t help. cutting the budget in the midst of a down draft or worse has never ever worked. it has always lead to a worse economy than a better one. you fix your budget problems after the economy recovers. which isn’t what they were demanding. which would lead to even more debt as the economy tanked even more.
Go find a total stimulus figure, look at total debt to gdp and then I double dare you to say we aren’t spending enough money we don’t have.
well considering that the majority (over 50% of that stimulus) was in TAX CUTS. is that really an indictment that tax cuts will help the economy? and just when did they ever do that?
they certainly didn’t do it in 2003 or 2001. neither of those tax cuts boosted the economy. those years the impact from easy credit was much much higher. though we are now paying for that
when we went into the great depression the deficit ballooned. when we want into WW2, the deficit ballooned. when we went into WW1, the deficit ballooned.
when we went into Iraq, the deficit ballooned. but unlike previous wars we didn’t raise taxes to pay for it. little wonder the deficit ballooned. and we won’t mention those tax cuts. that slashed revenue. which also lead to more deficits.
the real problem is even with all of the tea party shenanigans, the threat to not pay bills, the US has the lowest borrowing costs. in spite of the noise.
September 2nd, 2011 at 10:48 am
[...] monthly jobless report came out this morning and was weaker than expected. Unemployment held steady at 9.1% and no net [...]
September 2nd, 2011 at 11:14 am
Barry– I’ve read elsewhere today that the 45K Verizon workers that were on strike continued to be paid throughout the strike. If that’s the case, then today’s # would not have had any impact from the strike, right?
September 2nd, 2011 at 11:20 am
Regarding the NFP and Robert Reich’s comments that the ratio of corporate profits to wages is the highest since just before the Great Depression, both appear to me to reenforce the idea that the Great Recession was not a normal business cycle recession and the job recovery is likely to lag for many years to come, and what is more likely to restore normal ratios is a decrease in profits over time rather than any rise in wages.
September 2nd, 2011 at 11:31 am
thinking this was more of a mini crash/depression than a recession
September 2nd, 2011 at 12:04 pm
much ado about nothing
did we add jobs this year?
how’s that compare to any year under Bush?
September 2nd, 2011 at 12:12 pm
willid3,
“thinking this was more of a mini crash/depression than a recession”
It was/is both, just as was the Great Depression.
* With negative 13% GDP in 1932, the economy was in recession, but even with +11% GDP in 1934 and +13% GDP in 1936, the national economy remained in depression for several more years.
* With a negative 9% GDP in the last QTR of the previous administration, the economy was in recession, but even with positive GDP since the 3rd QTR of ’09 forward, the national economy remains in depression.
September 2nd, 2011 at 12:22 pm
Bob,
“did we add jobs this year? how’s that compare to any year under Bush?”
Since there was a net loss of jobs during the 8 years of the previous administration, just the 261,000 private-sector jobs created in February would best the previous 8 years combined.
September 2nd, 2011 at 12:51 pm
BR why do 45,000 Verizon workers receive an asterisk but 20,000 state workers returning in Minnesota do not?
September 2nd, 2011 at 1:50 pm
Food for Thought on the semiotic value of zero
“And what in the early seventeenth century was metaphorised in tragedy returns in the twentieth century naked in melodrama. The metaphor is literalised into a name the central character of Elmer Rice’s expressionist melodrama, The Adding Machine, is called, with a simple blank directness, Zero. He is not a noble figure, a king writ tragically large, but a banal nobody, a dull and obscure everyman, an annihilated self whose life is to be nothing, to achieve nothing, and to leave nothing behind. A grotesque and dramatically lurid wage slave of industrial capitalism, Zero evacuates his days meaninglessly adding up columns of numbers. Sacked to make way for a mechanical adding machine, he murders his boss, dies, is tried, goes to paradise, enjoys a brief transcendent moment of knowing and love – only to learn that he must return to life, as he has returned before and will do so again, washed clean of love and of all he has learned, to live another zero existence operating the adding machine of modern, 1923, capitalism.”
http://www.stanford.edu/class/history34q/readings/Rotman/Rotman_Origins.html
September 2nd, 2011 at 1:56 pm
@Ironman: Agreed… especially on the observation about the oil spike from earlier this year now rolling through the economy. Consumer gas price spikes were fairly immediate, but the impact on production and distribution appeared to lag for some time. No more. I’m seeing retail price increases virtually everywhere I look, especially via the ‘stealth’ approach of packaging reduced quantities @ same price. So, the consumer is spending more and getting less ≠ recipe for economic growth.
One separate observation: I’ve noticed a growing number of long-established small and medium sized businesses in Nor Cal throwing in the towel over the last two months. New small businesses are still cropping up, so there’s venture capital and liquidity sloshing around, but not-so-much for those that rely on bankers for financing (or so it would seem).
September 2nd, 2011 at 2:00 pm
Just to remind everyone who mentioned the birth-death adjustment here. This adjustment is made to the non-seasonally adjusted number and can’t be simply compared (and subtracted) with (from) the seasonally adjusted non-farm payroll number.
September 2nd, 2011 at 2:26 pm
semiotics can explain today’s NFP number. LSS- it’s shorthand for nihilism.
September 2nd, 2011 at 2:27 pm
Go austerity, go! Idiotic bullies and weaklings. We really can pick em. Where’s Bill Clinton when you need him.
September 2nd, 2011 at 2:41 pm
Will anyone on this site ever blame Obama ?
September 2nd, 2011 at 3:08 pm
@ StatArb says “Will anyone on this site ever blame Obama ?”
Are you seriously saying this isn’t Bush and the republicans fault? If tax cuts were the answer, from the
Bush tax cuts we would have 160 million employed and tax receipts rolling in. Obama is not a great leader but this mess sure as hell isn’t his fault. Tea Partiers saying cut taxes when they are 14% of GDP and they were 20.# when Reagan left office.
September 2nd, 2011 at 3:43 pm
rootless,
“Just to remind everyone who mentioned the birth-death adjustment here. This adjustment is made to the non-seasonally adjusted number and can’t be simply compared (and subtracted) with (from) the seasonally adjusted non-farm payroll number.”
The not seasonally adjusted numbers were even worse:
* 13,967,000 unemployed persons – seasonally adjusted
* 14,008,000 unemployed persons – not seasonally adjusted
September 2nd, 2011 at 3:57 pm
@Joe Friday:
I don’t understand your reply. What does this have to do with the birth-death adjustment applied to the non-farm payroll change?
September 2nd, 2011 at 4:14 pm
5.3% average unemployment for years 2001-2008
9% unemployment 2009-2011- ???
September 2nd, 2011 at 4:25 pm
if I may eat a few more bytes for non-stated point #3 ie: band harmony …
franklin411 “Everything the GOP knows about politics and economics, they learned from Osama bin Laden.”
rates right up there with -
jojo’s ” a waste is a terrible thing to mind”
September 2nd, 2011 at 4:34 pm
147 million people employed as recently 12 2007
136 million people employed today
blame Tea Party
blame Japan earthquake
blame high gas
blame Bush
I don’t care about that crap —– I voted for Clinton and Obama , so you’re not upsetting me when you attack Tea Party ,
but Obama has to do like Harry Truman one of these days and take responsibility for his mistakes and fix them
Herbert Hoover was bright , but every policy he pursued was a jobs killer , and history has properly left him in a garbage can .
USA doesn’t need any more Herbert Hoover’s
September 2nd, 2011 at 4:39 pm
@StatArb:
The high number of job losses since 2007 and the high unemployment rate have been a consequence of the worst recession after WWII. Are you asserting the Obama administration caused the recession?
September 2nd, 2011 at 4:43 pm
Isn’t itmore an inept Congress and misguided (also inept, to be sure) WH?
September 2nd, 2011 at 6:39 pm
Unless there is thorough DE-FINANACIALIZATION of our Economy (get rid of parasites and leeches) FIRST and then re-direct the sources to productive Economy ( Not the same old Zombie Banks or FIRE Economy. Other wise we will go no where, just like Japan or even worse!
Crony Capitalism will go nowhere especially when so called capitalists are afraid of ‘Free Market’ and hide behind Govt guarantees and bailouts!
‘“investors price in substantial government bailout guarantees for the financial sector as a whole” — thus the index puts are cheap, because you don’t need to insure privately against overall collapse — with around half of the market value of the financial sector during 2003-9 accounted for by collective bailout guarantees. No other sector in the United States economy gets anything like this kind of insurance.’ Simon Johnson in NY Column todaY
Both parties are in this con game from the beginning!
—–
“Essentially, the banking industry is a welfare state within the market economy,” he said in a speech this year. “The main difference with the normal welfare state is that the benefits are very high and that they are usually determined by the recipients themselves.”
–Mr. Hoogervorst served as co-chairman of a body that advised the two (domestic/Int’l) accounting boards on the financial crisis
http://www.nytimes.com/2010/10/22/business/22norris.html
September 2nd, 2011 at 7:33 pm
rootless,
“I don’t understand your reply. What does this have to do with the birth-death adjustment applied to the non-farm payroll change?”
A) You posted that the “birth-death adjustment” “is made to the non-seasonally adjusted number” and should not be compared to the seasonally adjusted number.
B) From the Bureau of Labor Statistics:
“Note that the net birth/death figures are not seasonally adjusted, and are applied to the not seasonally adjusted monthly employment estimates to derive the final CES employment estimates.”
C) I provided the “not seasonally adjusted monthly employment estimate”.
What part don’t you understand ?
September 2nd, 2011 at 7:35 pm
StatArb,
“5.3% average unemployment for years 2001-2008 … 9% unemployment 2009-2011- ???”
Between 2001 and 2009, the Unemployment Rate number was lower because the National Labor Force shrank, not because unemployment declined. There were millions of jobs lost from 2001 forward:
http://www.princeton.edu/~pkrugman/lostdecade.png
September 2nd, 2011 at 11:29 pm
@Joe Friday:
I said I didn’t understand your reply. The one you posted at 3:43 PM. I didn’t understand the meaning of you posting the absolute payroll numbers in your comment in reply to my reminder to not conclude anything from a comparison of the birth-death adjustment number with the seasonally adjusted payroll change. Did you want to refute something I said with your comment?
Your numbers weren’t even correct (The actual numbers are 131,132,000 and 130,906,000 for the seasonally and not seasonally adjusted payrolls in August 2011, respectively[1]). And just because the not seasonally adjusted number is lower than the seasonally adjusted one you can’t logically conclude that former is “worse” than latter. Like you can’t logically conclude that the not seasonally adjusted numbers were better than the seasonally adjusted ones for the months when former are higher than latter. There is seasonality in the payroll numbers. That’s why there is a seasonal adjustment. It also doesn’t really make sense to compare the birth-death adjustment of +85 K, which is a change, with the absolute number. If you want to see something than better look at the not seasonally adjusted change.
[1] http://data.bls.gov/pdq/querytool.jsp?survey=ce
September 3rd, 2011 at 12:27 am
A) I made no claim in regards to the net birth/death figures, I merely answered a query.
B) Your post:
“Just to remind everyone who mentioned the birth-death adjustment here. This adjustment is made to the non-seasonally adjusted number”
falsely assumed a fact not in evidence, that “everyone” had applied the adjustment to the seasonally adjusted number.
C) I pointed out that the BLS stated that the “net birth/death figures are not seasonally adjusted, and are applied to the not seasonally adjusted monthly employment estimates“.
D) The numbers I cited are for unemployed persons 16 and over for August 2011.
September 3rd, 2011 at 9:47 am
@Joe Friday:
Whatever you did in reply to MayorQuimby’s query, I still don’t understand the meaning of your reply to my comment.
This is not correct. I haven’t assumed this. I saw the possibility that this mistake to subtract the birth-death adjustment from the seasonally adjusted payroll change to get the “real” payroll change instead the (optional addition: deliberately “fudged”) one published by BLS is made here. It has happened here more than once, and it can often be found elsewhere as well. My comment was just a friendly reminder to not fall into this fallacy.
This is what I had said.
Which makes your reply to my comment and your judgment that they were “even worse” even more obscure, since the birth-death adjustment is applied to the establishment survey, not to the household survey numbers.
September 3rd, 2011 at 11:58 am
rootless,
“This is not correct. I haven’t assumed this.”
Really ?
Then for what other possible reason would you be compelled to “REMIND EVERYONE” that “THE BIRTH-DEATH ADJUSTMENT” “IS MADE TO THE NON-SEASONALLY ADJUSTED NUMBER”, when nobody else had claimed otherwise ?
“I saw the possibility that this mistake to subtract the birth-death adjustment from the seasonally adjusted payroll change to get the “real” payroll change instead the (optional addition: deliberately ‘fudged’) one published by BLS is made here.”
Indeed, you falsely assumed a fact not in evidence.
So, which is it, are you just really bad at attempting to set up Straw Men, or are you just trolling ?
September 3rd, 2011 at 2:19 pm
@Joe Friday:
The mistake mentioned by me has been made by other commenters here in this forum more than one time. This is a fact. This isn’t a straw man. I saw the possibility that it could be going there again. If it had happened this time even w/o my comment what was the harm in my comment? And what is YOUR problem? It seems to bother you a lot.
You still haven’t explained what you wanted to say with your reply yesterday at 3:43 PM to my comment. Is there still something coming with respect to that? Or should I stop waiting?