Today Employment Situation Report from the Bureau of Labor Statistics certainly appears to be good news:
Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.
Felix Salmon characterizes the report as unmitigated good news:
File this one under “unmitigated good news”: America’s employment situation turns out to have been rosier, at the end of 2011, than anyone had dared hope. There were 200,000 more people in work last month than there were in November, and the unemployment rate — by far the single most politically-important macroeconomic statistic — fell to 8.5%, the lowest rate in three years. All data series are noisy, of course, and we’ll surely see volatility in this one over the course of 2012. But it really does seem that there’s a bit of fire in the American belly right now, and that things are going to continue to get better over the course of this year unless and until some new crisis comes along.
I think I’ll hold off on the champagne for a bit. As noted this is a particularly noisy statistic but even more notably November’s employment numbers were revised downwards by 20% while November’s unemployment rate was revised upwards. I’ll be more enthusiastic when I see the revised numbers that are issued next month.
The labor force participation rate remains at 64%, as Bruce Krasting notes, the level it was anticipated to reach in 2025. Still, that’s better than a further decline.
Remember, folks, we’re in a recovery and it won’t go on forever.
Tyler Durden looks forward to the frabjous day when the U. S. will, officially at least, have zero unemployment, the feat to be accomplished by reducing the labor participation rate to 58.5%. See the charts in his post. The labor participation rate now is where it was 30 years ago. Somehow I don’t think that people are rejoicing at the additional leisure.
Just more bullshit. Retailers are reporting that their sales weren’t as good for the Christmas season as originally thought, and margins are down because of the super-duper sales needed to get people to shop in the first place. Given that the Administration, all likely Administrations next year, and the leadership of Congress think everything must be driven by consumers spending, this doesn’t look good. I expect that the non-seasonally adjusted numbers are probably getting massaged in ever screwier ways. As I’ve said, the UE-3 rate will be under 7.5% by July and falling rapidly; the people in charge will do anything to protect the only jobs that matter – their own.
James Hamilton periodically calculates a weighted average of the Household Survey, the Payroll Survey, and the ADP report. I think his weights were 0.1, 0.8, and 0.1 respectively. So, using those and the reported jobs numbers we get….192,495 new jobs, call it 192,000.
Is this good news? I guess, but it is still pretty anemic. And yeah, the employment population ratio is pretty damned low and the trend is in the “wrong” direction.
And I see what Tyler Durden has done, but what I find interesting in this issue is that prior to the 1960s the labor force participation rate was in the upper 50% range. Are we returning to that? If so that is probably not a good thing.
Whoops, meant the labor force participation rate in the second paragraph.
Heard on NPR today that many of the workers hired were temporary courier positions for UPS, FEDEX, etc. to service Christmas internet purchases. January’s numbers will likely see those jobs go away.
Technically seasonalized data is supposed to deal with that kind of thing.
“unmitigated good news”:
Let’s hope, but my chips have been placed on false dawn.
I’m between rosy scenario and false dawn. By rosy scenario I mean that next month November is lowered again a little, December is lowered 20-30%, closer to the anticipated levels. Since it’s an adjustment nobody will pay much attention. That will leave the BLS free to report nice, shiny, new numbers next month.
That will leave the BLS free to report nice, shiny, new numbers next month.
I forget how many weeks in a row the weekly initial claims numbers got revised up. At one point I remember it being something like 46 weeks in a row where the revisions all increased the previously reported numbers. I can’t imagine a system that only fails in the side of making the government looking good being honest. That was all during the recovery, BTW, when we’ve been told that everything was going GREAT GREAT GREAT because of our GLORIOUS HEAVENLY LEADER.
You’re right, but I don’t have a lot of confidence in the methodology that creates the estimates. I’m betting the rate bumps back up to about 8.7% in January.