February 6, 2012
By Greg Hunter
The most recent unemployment number is a total lie, and that lie was repeated all over the mainstream media (MSM). Two sins were committed here, and I don’t know which one is worse. The report was a sham, and the MSM reported that information without a single question about its accuracy. In a story carried across the MSM spectrum, the Associated Press said, “In a long-awaited surge of hiring, companies added 243,000 jobs in January – across the economy, up and down the pay scale and far more than just about anyone expected. Unemployment fell to 8.3 percent, the lowest in three years.” The report went on to say, “At the same time, the proportion of the population working or looking for work is its lowest in almost three decades. The length and depth of the recession have discouraged millions of people from looking for jobs. The better news of the past couple months has not yet encouraged most of them to start searching again.”
Here’s a headline for you. If it were not for accounting gimmicks and what the government calls “seasonal-adjustments,” the unemployment rate would have gone up, not down! In his latest report, economist John Williams from Shadowstats.com said, “January’s unadjusted unemployment rate rose to 8.8% . . . The only difference between those numbers and the headline 243,000 January jobs gain and 8.3% unemployment rate, is how the seasonal adjustments were applied. There are serious issues with the current quality of those adjustments, and extremely small distortions in those seasonals can make big differences in the resulting headline data.”
As far as “discouraged” workers who are not looking for a job, that is total rubbish put out by the government. The real story is the Bureau of Labor Statistics (BLS) simply has stopped counting more than 1.2 million of the unemployed in its report Friday. Williams goes on to say, “The issues here suggest that the headline 8.3% unemployment for January has moved well outside the realm of common experience and credibility, into the arena of election-year political shenanigans.” Williams is such a gentleman. Please take into consideration the government’s “official” or “headline” number is only based on people being out of work for 6 months or less. If the unemployment rate was calculated the way BLS did it in 1994 and earlier, the unemployment and underemployment would be 22.5%.
September 7th, 2011
The Huffington Post
By: Paul Wiseman and Christopher Leonard
The job market is even worse than the 9.1 percent unemployment rate suggests.
America’s 14 million unemployed aren’t competing just with each other. They must also contend with 8.8 million other people not counted as unemployed – part-timers who want full-time work.
When consumer demand picks up, companies will likely boost the hours of their part-timers before they add jobs, economists say. It means they have room to expand without hiring.
And the unemployed will face another source of competition once the economy improves: Roughly 2.6 million people who aren’t counted as unemployed because they’ve stopped looking for work. Once they start looking again, they’ll be classified as unemployed. And the unemployment rate could rise.
Intensified competition for jobs means unemployment could exceed its historic norm of 5 percent to 6 percent for several more years. The nonpartisan Congressional Budget Office expects the rate to exceed 8 percent until 2014. The White House predicts it will average 9 percent next year, when President Barack Obama runs for re-election.
The jobs crisis has led Obama to schedule a major speech Thursday night to propose steps to stimulate hiring. Republican presidential candidates will likely confront the issue in a debate the night before.
The back-to-back events will come days after the government said employers added zero net jobs in August. The monthly jobs report, arriving three days before Labor Day, was the weakest since September 2010.
Combined, the 14 million officially unemployed; the “underemployed” part-timers who want full-time work; and “discouraged” people who have stopped looking make up 16.2 percent of working-age Americans.
The Labor Department compiles the figure to assess how many people want full-time work and can’t find it – a number the unemployment rate alone doesn’t capture.
In a healthy economy, this broader measure of unemployment stays below 10 percent. Since the Great Recession officially ended more than two years ago, the rate has been 15 percent or more.
The proportion of the work force made up of the frustrated part-timers has risen faster than unemployment has since the recession began in December 2007.
That’s because many companies slashed workers’ hours after the recession hit. If they restored all those lost hours to their existing staff, they’d add enough hours to equal about 950,000 full-time jobs, according to calculations by Heidi Shierholz, an economist at the Economic Policy Institute.
That’s without having to hire a single employee.
No one expects every company to delay hiring until every part-timer is working full time. But economists expect job growth to stay weak for two or three more years in part because of how many frustrated part-timers want to work full time.
And because employers are still reluctant to increase hours for part-timers, “hiring is really a long way off,” says Christine Riordan, a policy analyst at the National Employment Law Project. In August, employees of private companies worked fewer hours than in July.
Some groups are disproportionately represented among the broader category of unemployment that includes underemployed and discouraged workers. More than 26 percent of African Americans, for example, and nearly 22 percent of Hispanics are in this category. The figure for whites is less than 15 percent. Women are more likely than men to be in this group.
Among the Americans frustrated with part-time work is Ryan McGrath, 26. In October, he returned from managing a hotel project in Uruguay. He’s been unable to find full-time work. So he’s been freelancing as a website designer for small businesses in the Chicago area.
Some weeks he’s busy and making money. Other times he struggles. He’s living at home, and sometimes he has to borrow $50 from his father to pay bills. He’s applied for “a million jobs.”
“You go to all these interviews for entry-level positions, and you lose out every time,” he says.
Nationally, 4.5 unemployed people, on average, are competing for each job opening. In a healthy economy, the average is about two per opening.
Facing rejection, millions give up and stop looking for jobs.
Norman Spaulding, 54, quit his job as a truck driver two years ago because he needed work that would let him care for his disabled 13-year-old daughter.
But after repeated rejections, Spaulding concluded a few weeks ago that the cost of driving to visit potential employers wasn’t worth the expense. He suspended his job hunt.
He and his family are getting by on his daughter’s disability check from Social Security. They’re living in a trailer park on Texas’ Gulf Coast.
“It costs more to look than we have to spend,” he says.
Eventually, lots of Americans like Spaulding will start looking for jobs again. If those work-force dropouts had been counted as unemployed, August’s unemployment rate would have been 10.6 percent instead of 9.1 percent.
Emma Draper, 23, lost her public relations job this summer. To pay the rent on her Washington apartment, she’s working part time at the retailer South Moon Under. She’s selling $120 Ralph Lauren swimsuits and other trendy clothes.
Her search for full-time work has been discouraging. Employers don’t call back for months, if ever.
“You’re basically on their timeline,” Draper says. “It’s really hard to find a job unless you know somebody who can give you an inside edge.”
Retailers, in particular, favor part-timers. They value the flexibility of being able to tap extra workers during peak sales times without being overstaffed during lulls. Some use software to precisely match their staffing levels with customer traffic. It holds down their expenses.
“They know up to the minute how many people they need,” says Carrie Gleason of the Retail Action Project, which advocates better working conditions for retail workers. “It’s almost created a contingent work force.”
Draper appreciates her part-time retail job, and not just because it helps pay the bills. It takes her mind off the frustration of searching for full-time work.
“Right now, finding a job is my job,” she says. “If that was the only thing I had to do, I’d be going insane. There is only so much time you can sit at your computer, sending out resumes.”
September 2nd, 2011
The Wall Street Journal
By: Luca Di Leo and Jeff Bater
The U.S. economy failed to add jobs for the first time in almost a year, raising the odds of a return to recession and putting more pressure on President Barack Obama and the Federal Reserve to revive a moribund labor market.
Nonfarm payrolls were unchanged last month—the worst result since a small decline in September 2010—as the government sector continued to shed jobs, the Labor Department said Friday. The private sector added only 17,000 jobs.
About 45,000 telecom jobs were off company payrolls because of a strike at Verizon Communications Inc., contributing to the worst private-sector performance since February 2010. But payrolls were weak even without the one-off Verizon impact.
Data for the previous two months were revised down by a total 58,000 to show payroll increases of 85,000 jobs in July and only 20,000 in June, the government report showed.
The unemployment rate, which is obtained from a separate household survey, was unchanged at 9.1% last month. About 14 million Americans who would like to work can’t get a job.
And the average private-sector workweek fell to 34.2 hours from 34.3 hours, a sign of a greater slowdown in activity than economists had expected.
The results were worse than expected, and stocks fell on the news. Treasury prices rose, pushing yields down. Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 80,000 last month, with the unemployment rate unchanged.
Citing the nation’s wobbly recovery, Mr. Obama on Friday asked the Environmental Protection Agency to withdraw a proposed regulation for ozone air-quality standards. Republicans and industry groups have attacked the air-quality rule for months, saying it could cost tens of billions of dollars a year or more and kill thousands of jobs.
Mr. Obama is due to unveil new measures Thursday aimed at resuscitating the jobs market, but budget constraints and sharp divisions between Democrats and Republicans make it unlikely Congress will pass a substantive package. The Federal Reserve may therefore end up taking new steps to try to spur growth. The economy slowed sharply in the first half, heightening concerns it could fall back into recession only two years after the end of the severe downturn of 2008 and 2009.
The jobs report is worrying because it is in line with the weak trend seen in recent months, but it doesn’t spell recession yet, the commissioner of the Bureau of Labor Statistics said in an interview Friday.
Keith Hall said that, while the zero payroll figure for last month “is a little bit shocking,” the more concerning aspect is that job gains have only averaged 40,000 over the past four months. Monthly employment gains of at least 130,000 are likely needed just to keep the unemployment rate steady, he warned.
In Friday’s report, several major industries showed weakness beyond the 48,000 employment decline in the information industry, which includes telecom jobs.
Manufacturing, a big creator of jobs for most of the recovery, saw employment decline by 3,000 in August. The battered construction sector showed 5,000 job losses last month. The housing sector remains a big drag on the economy. The retail sector lost nearly 8,000 jobs.
Meanwhile, government employment continued to fall—by 17,000—for the 10th month in a row. Government jobs are expected to continue struggling as administrations try to cut the huge budget gaps accumulated to fight the recession.
Facing re-election in just over a year, Mr. Obama is next week expected to call for more investments in the country’s creaking infrastructure and a possible extension to the 2011 payroll-tax credit to boost consumer spending. But Republican opposition to more spending makes the president’s job harder. The White House Thursday downgraded its outlook for the economy, saying unemployment could still be at 9% in 2012.
Fed Chairman Ben Bernanke a week ago said the nation’s challenges—including long-term unemployment and weakness in housing—are largely beyond the central bank’s control, indicating it is mainly up to Mr. Obama and Congress to fix the economy. Even so, the Fed is likely to step in if it feels the economy is at risk because of government paralysis. Some officials signaled readiness to enact a third round of the Fed’s controversial asset purchases at their latest meeting Aug. 9.
With fiscal policy options “locked up as we roll into an election year, Ben Bernanke will come under tremendous pressure to act,” said Jason Schenker, president of forecasting company Prestige economics.
The jobs report Friday showed 42.9% of unemployed Americans, or six million people, were out of work for more than six months. The longer someone is without a job, the harder it is to find work.
Yet the fact that a large number of Americans have been out of work for several months means that more expansive monetary policy won’t be as effective in helping the labor market, three economists argue in a new paper from the Federal Reserve Bank of Richmond.
“After a long period of unemployment, affected workers may become effectively unemployable,” says the paper, by Andreas Hornstein, Thomas A. Lubik and Jessie Romero. “This suggests that the natural rate of unemployment may have increased.”
Some said the news wasn’t altogether unexpected. “In summary, this report is not good news, but it is not inconsistent with other recent indicators,” said Chad Moutray, chief economist for the National Association of Manufacturers, in a statement. He said the jobs report would “embolden those who argue for new initiatives to stimulate economic growth.”
February 9th, 2011
By: Charles Hugh Smith
Last week’s surprisingly sharp decline in the unemployment rate from 9.4% to 9% and equally surprising anemic job growth — 36,000 new jobs — left a lot of investors scratching their heads. How could the unemployment rate plummet so significantly while a such a trivial number of new jobs were created?
If we simply extrapolate those numbers, we get some nonsensical results. If adding 36,000 jobs to the 139 million jobs in the U.S. economy lowers the unemployment rate by 0.4 percentage points, then adding just 720,000 jobs should lower the unemployment rate by 8 points — from 9% to only 1%.
Yet the Bureau of Labor Statistics data shows that 812,000 jobs were added in the year from January 2010 to January 2011 (138,511,000 vs. 139,323,000). Based on the unemployment rate announced last week, we could expect that those 812,000 additional jobs would have lowered the unemployment rate to near-zero. But of course, we know they didn’t.
The basic reason why the numbers don’t add up is that the BLS is constantly adjusting the variables of this basic equation:
Number of people in the workforce (civilian labor force) – number of people with jobs (employed) = number of unemployed people.
The BLS tracks the “civilian noninstitutional population” — everyone not in the Armed Forces, school, prison, etc. — and the “civilian labor force.” The category “not in labor force” includes everyone else, including “discouraged workers” who want a job but who have stopped seeking one.
This ongoing adjustment of who gets counted as part of the labor force leads statisticians to lower the unemployment rate — even though the number of employed people has barely ticked up.
To understand this, let’s consider a labor force of 100 people, of which 20 are unemployed. The unemployment rate is 20%. But if 10 unemployed people drop out of the labor force, that reduces the total labor force to 90, and the number of unemployed to 10. As if by magic, the unemployment rate is now only 11%, even though the number of people with jobs remains unchanged.
This is the “magic” behind last week’s astonishing decline in the unemployment rate.
Using the BLS data, we can reconstruct exactly what has happened over the past few years of recession and mild recovery.
The U.S. gains about 2 million new residents every year from births and legal immigration. For instance, the civilian noninstitutional population rose from 236.5 million in October 2009 to 238.5 million in October 2010.
November 15th, 2010
By: John Melloy
There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart.
A new pricing survey of products sold at the world’s largest retailer showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate.
The “inaugural price survey shows a small, but meaningful increase on an 86-item grocery basket,” said Patrick McKeever, MKM Partners analyst, in a note. Most of the items McKeever chose to track were every day items like food and detergent and made by national brands.
On November 3, the Fed announced its much-anticipated purchase of $600 billion in Treasury securities. An effort to keep market rates low since the central bank’s benchmark rate is already at zero. The Federal Open Market Committee’s statement said, “Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate.”
But since that statement, interest rates have actually gone up, backfiring on a Fed chief who wants his quantitative easing to spark inflation of 2 percent annually. A moderate amount of inflation would be considered good for the economy. The problem is that inflation is already running well above a healthy level, investors said, Bernanke is just not looking in the right place, like a Walmart.
“I suspect that when the Chairman thinks about reflation he has a difficult time seeing any other asset besides real estate,” said Jim Iuorio of TJM Institutional Services. “Somehow the Fed thinks that if its not ‘wage driven’ inflation that it is somehow unimportant. It’s not unimportant to people who see everything they own (homes) going down in value and everything they need (food and energy) going up in price.”
Next week, the government is expected to say its official measure of inflation, the Consumer Price Index, increased at a 0.3 percent annual rate, according to economists’ consensus estimate. Core CPI, excluding food and energy, is expected to climb just 0.1 percent.
The biggest dollar increase in McKeever’s survey was on a jug of Tide Original laundry detergent, manufactured by Procter & Gamble. Both P&G and Kimberly-Clark gave tentative forecasts for this quarter on concern they won’t be able to pass rising input costs on to the consumer. They may have no choice.
Prices of cotton, silver wheat, soybeans, corn are all up big this year. Cotton futures are up the most, climbing 90 percent so far in 2010. The price of silver is up 63 percent.
The purpose of McKeever’s note was actually not to be a commentary on Fed policy. The retail analyst is just trying to find out if Walmart is subtlety-increasing prices without decreasing foot traffic. A process he would deem bullish the stock.
“If the pricing dynamic is shifting, as our survey suggests, this would lend some upside bias to our sales and earnings expectations,” said McKeever.
Bernanke keeping interest rates artificially low is sparking outrage among central bank chiefs around the world, who feel the U.S. is essentially exporting inflation.
China’s CPI surged 4.4% in October, according to figures released Thursday, higher than economists’ expected and up from a 3.6 percent annual reading in the month prior.
Said EmergingMoney.com Founder Tim Seymour, “Bernanke definitely must not shop at WalMart in China.”
March 30, 2010
By Carla K. Johnson
Under the health care overhaul, young adults who buy their own insurance will carry a heavier burden of the medical costs of older Americans—a shift expected to raise insurance premiums for young people when the plan takes full effect.
Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That’s when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average, or roughly $42 a month, according to an analysis of the plan conducted for The Associated Press. The analysis did not factor in tax credits to help offset the increase.
The higher costs will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years.
Consider 24-year-old Nils Higdon. The self-employed percussionist and part-time teacher in Chicago pays $140 each month for health insurance. But he’s healthy and so far hasn’t needed it.
The law relies on Higdon and other young adults to shoulder more of the financial load in new health insurance risk pools. So under the new system, Higdon could expect to pay $300 to $500 a year more. Depending on his income, he might also qualify for tax credits.
At issue is the insurance industry’s practice of charging more for older customers, who are the costliest to insure. The new law restricts how much insurers can raise premium costs based on age alone.
Insurers typically charge six or seven times as much to older customers as to younger ones in states with no restrictions. The new law limits the ratio to 3-to-1, meaning a 50-year-old could be charged only three times as much as a 20-year-old.
The rest will be shouldered by young people in the form of higher premiums.
Higdon wonders how his peers, already scrambling to start careers during a recession, will react to paying more so older people can get cheaper coverage.
“I suppose it all depends on how much more people in my situation, who are already struggling for coverage, are expected to pay,” Higdon says. He’d prefer a single-payer health care system and calls age-based premiums part of the “broken morality” of for-profit health care.
To be sure, there are benefits that balance some of the downsides for young people:
_ In roughly six months, many young adults up to age 26 should be eligible for coverage under their parents’ insurance—if their parents have insurance that provides dependent coverage.
_ Tax credits will be available for individuals making up to four times the federal poverty level, $43,320 for a single person. The credits will vary based on income and premiums costs.
_ Low-income singles without children will be covered for the first time by Medicaid, which some estimate will insure 9 million more young adults.
But on average, people younger than 35 who are buying their own insurance on the individual market would pay $42 a month more, according to an analysis by Rand Health, a research division of the nonpartisan Rand Corp.
The analysis, conducted for The Associated Press, examined the effect of the law’s limits on age-based pricing, not other ways the legislation might affect premiums, said Elizabeth McGlynn of Rand Health.
Jim O’Connor, an actuary with the independent consulting firm Milliman Inc., came up with similar estimates of 10 to 30 percent increases for young males, averaging about 15 percent.
“Young males will be hit the hardest,” O’Connor says, because they have lower health care costs than young females and older people who go to doctors more often and use more medical services.
Predicting exactly how much any individual’s insurance premium would rise or fall is impossible, experts say, because so much is changing at once. But it is possible to isolate the effect of the law’s limits on age-based pricing.
Some groups predict even higher increases in premiums for younger individuals—as much as 50 percent, says Landon Gibbs of ShoutAmerica, a Tennessee-based nonprofit aimed at mobilizing young people on health care issues, particularly rising costs.
Gibbs, 27, a former White House aide under President George W. Bush, founded the bipartisan group with former hospital chain executive Clayton McWhorter, now chairman of a private equity firm. McWhorter finances the organization. The group did not oppose health care reform, but stressed issues like how health care inflation threatens the future of Medicare.
“We don’t want to make this a generational war, but we want to make sure young adults are informed,” Gibbs says.
March 23, 2010
By: John McCormick and Alison Vekshin
Americans are leery about creating a new federal agency to make consumer-protection rules for mortgages and credit cards and would prefer to enhance the existing powers of banking regulators.
Most people interviewed in the Bloomberg National Poll say they don’t like Wall Street, banks or insurance companies and favor letting the government punish bankers who helped cause the worst financial crisis since the Great Depression.
Almost seven out of 10 people surveyed support using current bank regulators for consumer protection, backing positions held by the financial industry and Republicans over President Barack Obama’s proposal to establish an independent agency.
The poll’s findings come as the White House and congressional Democrats pivot to focus more election-year attention on an unpopular political target — banks and Wall Street — following this week’s victory on health-care legislation.
“Let’s not paint all of Wall Street with the same brush, but there are those who really did tremendous harm to our economy,” House Speaker Nancy Pelosi told reporters. “So now we will have a bill because we can’t ever let this happen again to the American people.”
As the country struggles with a 9.7 percent unemployment rate while financial stocks surge, 57 percent of Americans have a mostly unfavorable or very unfavorable view of Wall Street, versus fewer than one-quarter who have a favorable opinion. Banks are viewed badly by 54 percent of poll respondents, and 60 percent have a negative opinion of insurance companies.
Disdain for Executives
The poll also shows most Americans don’t like the nation’s top corporate bosses. Almost two-thirds say they have an unfavorable opinion of business executives, a rating that rivals the public’s disdain for Congress, which was viewed with disfavor by 67 percent of respondents.
The poll of 1,002 U.S. adults was conducted March 19-22 by Selzer & Co. of Des Moines, Iowa. It has a margin of error of plus or minus 3.1 percentage points.
Low esteem for financial firms was reflected in resentment of big paychecks on Wall Street.
Fifty-six percent of those polled say they would support government action to limit compensation of those who helped cause the financial crisis, or to ban those people from working in the banking industry.
“The amount of money that people on Wall Street make seems to be really out of bounds,” said Laure Sinclair, 52, a part- time accountant who lives in Dallas. “But I don’t know that the government can regulate that because we want to be a capitalist society.”
March 12, 2010
By David Morgan
The findings suggest that 82 percent of Americans want the government to clamp down more strongly on Wall Street excesses, with a particular emphasis on bonus schemes that have rewarded employees at loss-making companies such as American International Group.
A Harris release on the February 16-21 telephone survey of 1,010 adults did not specify how financial regulation should be applied but said three-quarters of Americans believe Wall Street companies should pay bonuses only while in the black.
Harris said the U.S. public does see value in Wall Street itself: nearly 60 percent say the financial sector is an essential benefit to the United States.
But a slightly larger majority disagrees that what is good for Wall Street is good for the country, while about two-thirds harbor strong negative views about the people who work there.
By a margin of 66 percent to 29 percent, Americans agree that “most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it,” pollsters found.
Sixty-five percent say most successful people on Wall Street do not deserve the kind of money they make.
A similar majority said those in the financial sector are generally less honest and less moral than the general public.
“Those who manage large banks and other financial institutions can draw some comfort from the majorities who believe that Wall Street is essential and benefits the country, even if these numbers are much worse than they were before the 2008 crash,” Harris said in a statement.
“On the other hand, there is no evidence that the American people have begun to forgive the people in Wall Street or to forget the huge problems that they caused.”
Harris did not provide a margin of error for the poll.
March 8, 2010
Bureau of Labor Statistics
Nonfarm payroll employment was little changed (-36,000) in February, and the
unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics
reported today. Employment fell in construction and information, while tem-
porary help services added jobs. Severe winter weather in parts of the
country may have affected payroll employment and hours; however, it is not
possible to quantify precisely the net impact of the winter storms on these
measures. For more information on the effects of the severe weather on employ-
ment estimates, see the box note at the end of the release.
Household Survey Data
In February, the number of unemployed persons, at 14.9 million, was essen-
tially unchanged, and the unemployment rate remained at 9.7 percent. (See
Among the major worker groups, the unemployment rates for adult men (10.0 per-
cent), adult women (8.0 percent), whites (8.8 percent), blacks (15.8 percent),
Hispanics (12.4 percent), and teenagers (25.0 percent) showed little to no
change in February. The jobless rate for Asians was 8.4 percent, not season-
ally adjusted. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks and over) was
6.1 million in February and has been about that level since December. About 4
in 10 unemployed persons have been unemployed for 27 weeks or more. (See
In February, the civilian labor force participation rate (64.8 percent) and
the employment-population ratio (58.5 percent) were little changed. (See
The number of persons working part time for economic reasons (sometimes refer-
red to as involuntary part-time workers) increased from 8.3 to 8.8 million in
February, partially offsetting a large decrease in the prior month. These in-
dividuals were working part time because their hours had been cut back or be-
cause they were unable to find a full-time job. (See table A-8.)
About 2.5 million persons were marginally attached to the labor force in
February, an increase of 476,000 from a year earlier. (The data are not sea-
sonally adjusted.) These individuals were not in the labor force, wanted and
were available for work, and had looked for a job sometime in the prior 12
months. They were not counted as unemployed because they had not searched for
work in the 4 weeks preceding the survey. (See table A-16.)
Among the marginally attached, there were 1.2 million discouraged workers in
February, up by 473,000 from a year earlier. (The data are not seasonally ad-
justed.) Discouraged workers are persons not currently looking for work be-
cause they believe no jobs are available for them. The remaining 1.3 million
persons marginally attached to the labor force had not searched for work in
the 4 weeks preceding the survey for reasons such as school attendance or
Establishment Survey Data
Total nonfarm payroll employment was little changed in February (-36,000).
Job losses continued in construction and information, while employment con-
tinued to increase in temporary help services. Since the start of the reces-
sion in December 2007, payroll employment has fallen by 8.4 million. (See
Construction employment fell by 64,000 in February, about in line with the
average monthly job loss over the prior 6 months. Job losses were concen-
trated in nonresidential building (-10,000) and among nonresidential specialty
trade contractors (-35,000). Since December 2007, employment in construction
has fallen by 1.9 million.
Employment in the information industry dropped by 18,000 in February. Since
December 2007, job losses in information have totaled 297,000. In February,
employment in transportation and warehousing continued to trend down.
Employment in manufacturing was essentially unchanged in February. Small job
gains in a number of component industries were offset by job losses in motor
vehicles and parts and in chemicals.
Retail trade employment was unchanged in February, after a sizeable increase
in January. Over the month, job gains in building material and garden supply
stores (7,000) and in department stores (6,000) were offset by declines in
food and beverage stores (-9,000).
In February, temporary help services added 48,000 jobs. Since reaching a low
point in September 2009, temporary help services employment has risen by
284,000. Health care employment continued to trend upward in February.
In February, employment in the federal government edged up. The hiring of
15,000 temporary workers for Census 2010 was partially offset by a decline
in U.S. Postal Service employment.
The average workweek for all employees on private nonfarm payrolls declined
by 0.1 hour to 33.8 hours in February. The manufacturing workweek for all
employees dropped by 0.4 hour to 39.5 hours, and factory overtime decreased
by 0.2 hour over the month. In February, the average workweek for production
or nonsupervisory employees on private nonfarm payrolls fell by 0.2 hour to
33.1 hours; the workweek fell by 1.0 hour in construction, likely reflecting
the unusually severe winter storms. (See tables B-2 and B-7.)
In February, average hourly earnings of all employees on private nonfarm
payrolls increased by 3 cents, or 0.1 percent, to $22.46. Over the past 12
months, average hourly earnings have risen by 1.9 percent. In February, aver-
age hourly earnings of private production and nonsupervisory employees rose
by 3 cents, or 0.2 percent, to $18.93. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for December was revised from
-150,000 to -109,000, and the change for January was revised from -20,000 to
January 11, 2010
By Bob Willis and Courtney Schlisserman
An exodus of discouraged workers from the job market kept the U.S. unemployment rate from climbing above 10 percent in December, economists said.
Had the labor force not decreased by 661,000 last month, the jobless rate would have been 10.4 percent, according to economists including David Rosenberg at Gluskin Sheff & Associates in Toronto and Harm Bandholz at UniCredit Research in New York.
“The actual unemployment rate is higher than shown by the official numbers,” Bandholz said yesterday after a Labor Department report released in Washington showed the economy unexpectedly lost 85,000 jobs in December while the jobless rate was unchanged.
About 1.7 million Americans opted out of the workforce from July through December, representing a 1.1 percent drop that marks the biggest six-month decrease since 1961, the Labor Department report showed. The share of the population in the labor force last month fell to the lowest level in 24 years.
The so-called underemployment rate — which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking — rose to 17.3 percent in December from 17.2 percent.
The number of discouraged workers, those not looking for work because they believe none is available, climbed to 929,000 last month, the most since records began in 1994.
Length of Unemployment
The backdrop to the disillusionment is that it’s taking longer and longer to find work, economists said. Workers were unemployed for 29.1 weeks on average last month, the most since records began in 1948.
“Longer-term unemployment is one of the biggest problems,” said Bandholz. “Payroll declines will come to a halt in the next couple of months, but the people who are unemployed are having problems getting a job and it’s getting tougher by the month.”
Revised figures showed payrolls climbed by 4,000 in November. The gain was the first since the economic slump began in December 2007.
“Workers seem to be particularly discouraged by this recession,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
The participation rate, or the share of the population in the labor force, fell to 64.6 percent in December, the lowest level since 1985, from 64.9 percent.
The labor force will probably grow this year as the economy continues to expand and Americans believe jobs will be easier to get. That will mean the unemployment rate will head higher because there won’t be enough jobs available to satisfy the demand for work.
“The exodus from the labor force can’t contain the unemployment rate indefinitely,” said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. “We expect unemployment to resume rising over the next few months, peaking near 10.5 percent in the third quarter.”
Federal Reserve policy makers, while noting stabilization in the labor market, have expressed concern about unemployment and poor job prospects. That’s one reason policy makers will keep the benchmark interest rate near zero longer than most anticipate, said John Ryding.
Fed ‘On Hold’
Treasury two-year notes yesterday gained the most in three weeks following the worse-than-expected payroll numbers. The yield fell five basis points, or 0.05 percentage point, to 0.97 percent at 4:31 p.m. in New York.
President Barack Obama on Dec. 8 proposed additional spending on the nation’s transportation system, tax credits to spur hiring by small businesses and incentives to make homes more energy efficient in a second round of efforts to cut the jobless rate.
“We’re going to have to work harder to create jobs.” U.S. Labor Secretary Hilda Solis said in an interview on Bloomberg Television. “This is a very stubborn recession.”