Posts filed under “Wages & Income”

Tearing Apart January 2012 NFP data

Despite the cries of the permabears and Rick Santelli, this was unequivocally a strong NFP report. The headline numbers were 243,000 net jobs, as unemployment dipped to 8.3%. The Labor Pool increased — suggesting that the improvement was not the usual employee retirement and discouraged worked giving up looking for work.

When we go beneath the headlines, we usually see the data’s warts — not this time. Across the board this was a surprisingly strong report. BLS called described job growth as “widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing.”

As noted earlier, no single month matters as much as the overall trend — and the trend is unequivocally upwards for the better part of 3 quarters now.

Lets go to the details:

• Total nonfarm payroll employment rose by 243,000 in January. Private-sector employment grew by 257,000;
• Unemployment rate declined by 0.2 percentage points in to 8.3%; Its down by 0.8 point since August.
• The Household survey, used to measure Unemployment rate, added a whopping 491,000 jobs.
• The number of unemployed persons declined to 12.8 million, from over 16 million at the recession peak.
• Employment-population ratio rose to 58.5% in January (Seasonally adjusted)
• The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours.
• Average workweek for all employees was unchanged in January, but the manufacturing workweek increased by 0.3 hour to 40.9 hours (likely multi shift auto mfr); Factory overtime increased by 0.1 hour to 3.4 hours.
• Average hourly earnings for all private employees rose by 4 cents (0.2%) to $23.29. Over the past 12 months, average hourly earnings have increased by 1.9%
• November NFP was revised from +100,000 to +157,000; December NFP was revised from +200,000 to +203,000.
• Benchmarks were also revised upwards — as of December 2011, total employment was raised by 266,000 (231,000 NSA)

The Negatives?

• Unemployment rates for teenagers 23.2%; for blacks is 13.6%; Hispanics 10.5%
• Long-term unemployed (jobless for 27 weeks +) was little changed at 5.5 million — thats 42.9%
• Persons employed part time for economic reasons, at 8.2 million, changed little in January; 2.8 million persons were marginally attached to the labor force, and 1.1 million discouraged workers, essentially unchanged from a year earlier.
• Employment in information declined by 13,000, including a loss of 8,000 jobs in the motion picture and sound recording industry
• Employment in construction increased by 21,000 in January, likely a temporary blip caused by unusually warm weather — 206,000 people were unable to work due to weather, well below normal for this time of year.

The one dark spot is the nagging, persistently long-term unemployment data. I suspect that is as much due to secular trends than cyclical recovery and is unlikely to improve anytime soon.

All told, its tough not to like this NFP report. Markets surely do, with the Dow up 140.


Employment Situation Summary
BLS, Friday, February 3, 2012

Did Economy Really Create 500,000 Jobs?
Real Time Economics February 3, 2012

Category: Data Analysis, Employment, Wages & Income

NFP: Outliers Are Where Investing Risks Lay

Today we find out just how seasonal those 200,000 new jobs were in December 2011. Consensus is for employment to grow by 140,000 — about par with population growth. Unemployment is expected to be unchanged at 8.5%. As I am so fond of writing, no single month’s NFP matters all that much — focus on…Read More

Category: Employment, Wages & Income

The Original 99% Movement

Top Military Man Invokes the Occupy Movement in 1933 General Butler addressed the Bonus Army in Washington D.C. in 1933, as they “occupied” D.C. to demand compensation for their service to the country: Smedley Butler from Louis Proyect on Vimeo. General Butler invoked the 99% movement, telling the veterans: We are divided, in America, into…Read More

Category: Think Tank, Wages & Income, War/Defense

OECD Report: Linking Income Distribution With Growth

˜˜˜ Source: Bloomberg Brief January 24, 2012

Category: Data Analysis, Wages & Income

Measuring Wealth by Assets, Not Income

Interesting discussion at Economix looking at the top economic strata:. Instead of using income (as the Census does) to measure wealth, what if we looked at Assets instead (as the Federal Reserve’s Survey of Consumer Finances does)?. No surprise, the wealth gap as measured by net worth is much more extreme than that measured by…Read More

Category: Wages & Income

The Merrill Lynch Cramdown

Last month, I noticed this WSJ article, Merrill’s 2012 Pay To Drive Advisers To Richer Clients. I didn’t think much about it over the holidays, but it started gnawing at me. Perhaps it was reading a draft of Josh Brown’s book, Backstage Wall Street over the weekend that started me thinking about that piece. This…Read More

Category: Bailouts, Corporate Management, Investing, Wages & Income


Exactly 5 years ago today, the WSJ published this post (Plutonomics) about a rather fascinating study on wealth inequality. It was written by of all folks, Citigroup global strategist Ajay Kapur. In 2005, Kapur’s research team “came up with the term ‘Plutonomy’ in 2005 to describe a country that is defined by massive income and…Read More

Category: Politics, Wages & Income

Decline of Deference, Disdain for Über-Rich

Interesting observation: “Disdain for the uber-rich was unthinkable until — “It wasn’t the crash of 2008 that led to their fall from grace, nor exposure of the greed and stupidity that required a massive public rescue. It was their graceless reaction to the bailouts: no apologies, remorse or gratitude — even faked; just more arrogance,…Read More

Category: Psychology, Wages & Income

Inside the 1% (Big Picture Conference)

All of the Big Picture conference videos are now available. Here is the latest video posted: The One Percent: Breaking Down US Wealth Distribution. ~~~ Watch all of the Big Picture Conference for $39.95 or choose just the speakers you want to see on

Category: Employment, Wages & Income

Inside the 1%

The One Percent: Breaking Down US Wealth Distribution from The Big Picture Conference on

Category: Employment, Video, Wages & Income