Private-Sector Jobs Increase for the 8th Month, First Time Since 2007; +763,000 Payroll Jobs This Year, But Almost +1.8 Million Total Household Jobs
Some highlights of today's employment report for August:
1. Private-sector jobs have increased in each month this year, and by 67,000 in August, bringing the total to 763,000 private-sector jobs that have been created this year. This is the first time since December 2006 to July 2007, three years ago, of eight consecutive monthly gains in private-sector employment (see top chart above).
2. Temporary help service jobs increased in August by 16,800 to 2,116,000 jobs, the highest employment level in this sector since December 2008 (see middle chart above). Except for a small decrease in July of 900 jobs, temporary employment has increased in each month since last October, following 23 consecutive monthly losses from November 2007 to September 2009. Since last October, temporary employment has increased by 392,200.
3. Average overtime hours for manufacturing increased slightly in August to 3.9 hours from 3.8 hours in July, matching the 3.9 hours in May and June, which is the highest level of overtime since May 2008, more than two years ago.
Update: Inspired by Scott Grannis' post today, the bottom chart above shows the monthly change in number of private-sector jobs using the household survey measure of total civilian employment that includes the self-employed, MINUS the total number of government employees from the household survey (data available here). Based on that measure of private-sector employment, the economy has added almost 1.8 million new jobs since the first of the year, a pace of more than 200,000 private-sector jobs per month. (Thanks to Scott Grannis for clarification of how private-sector employment is calcuated using household data.)
30 Comments:
the fly in the ointment here is that "part time for economic reasons" workers increased.
http://calculatedriskimages.blogspot.com/2010/09/part-time-for-economic-reasons-august.html
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 331,000 over the month to 8.9 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
that number is nearly 5 times the number of "new jobs"
The Nightly Business Report (PBS) stated that one in four permanent jobs now results from an employee's temporary position. This was on the 9-2-10 broadcast.
buddy-
do you mean 1 in 4 new jobs or one in 4 of all jobs in the whole workforce?
the former seems plausible, the latter seems questionable.
morganovich, one in four new jobs.
BTW, Scott Grannis (The Califia Beach Pundit) is reporting this headline: "Private Sector adds 1.8 million jobs"! This is based on random surveys of households rather then targeted surveys to known businesses.
b-
thanks.
one thing that i do wonder about is to what extent this is being driven by the tax considerations of the employees.
everyone who works for us comes on as a "consultant" so that they can claim "sole proprietor" on their taxes and get more. this is true even of me and the other managing partner. you get a ton more deductions that way. so, i show up as "temporary", but that does not reflect the reality of my employment situation.
The August ISM Non-manufacturing index was at 51.5%, down from 54.3% in July - and below expectations of 53.0%. The employment index showed contraction in August at 48.2%. Note: Above 50 indicates expansion, below 50 contraction.
this is a bit worrying as this covers a much larger part of the economy than manufacturing.
Good news, although hardly compares to the employment growth we had in the 1990s. BTW, the US had a weak dollar in the 1990s, according to Scott Grannis charts. Our best decade ever.
Mark: You are subtracting government employees using data from the establishment survey. I'm subtracting government employees using the same household survey. Data here:
http://www.bls.gov/news.release/empsit.t08.htm
The temporary help graph doesn't really tell anything much outside of itself. It might mean something if you differentiated between the people who genuinely are in trouble and the people who aren't hiring(or are hiring temporarily) out of political spite.
The Nightly Business Report (PBS) stated that one in four permanent jobs now results from an employee's temporary position. This was on the 9-2-10 broadcast.
The problem is that a good chunk of the ones that don't are permatemping. Yes, that's quite the bad thing to be strung along.
Dr. Perry,
Respectfully…
1) ADP reports “ Private-sector employment decreased by 10,000 from July to August”.
2) Click here for my take on these two jobs reports.
Dr. Perry,
If you are interested in maintaining the integrity of your link to today’s BLS data, you might want to use this link instead of this link.
The latter link changes every month to reflect the latest data. One month from now, your link will no longer be relevant to this post. Of course, this may or may not matter to you. Your call.
Respectfully,
SBVOR
What was that noise?
Oh. Nevermind, that's just Sethstorm with his usual prattling.
This is interesting.
Which state had the most bank failures during 2008-10?
No, it’s not centers of sub-prime madness like Arizona or Nevada. Nor is it big states like California or Florida. It’s Georgia. And Illinois is second. Check out the graph in this link:
There is a good reason why most bank failures in 2009 did not occur in the sub-prime states; sub-prime loans were not the main problem. Indeed mortgages of all types were not the main problem. What was? According to McNewspaper USA Today it was construction loans, often for commercial real estate:
The biggest bank killer around isn’t some exotic derivative investment concocted by Wall Street’s financial alchemists. It’s the plain old construction loan, Main Street banks’ bread and butter for decades.
Deutsche Bank has called them “without doubt, the riskiest commercial real estate loan product.” The Congressional Oversight Panel, a financial watchdog, has warned that construction loans have deteriorated faster and inflicted bigger losses on banks than any other real estate loans.
"everyone who works for us comes on as a "consultant" so that they can claim "sole proprietor" on their taxes and get more. this is true even of me and the other managing partner. you get a ton more deductions that way. so, i show up as "temporary", but that does not reflect the reality of my employment situation."
==================================
Be careful. This may be disallowed by the IRS. The IRS does not consider you a consultant if the employer provides material, space, and substantial direction for your work.
Lots of people do it, just the same
Two ways of looking at this.
One is that the BLS is lying as it has been doing for years. The numbers look like this:
U.3 = 9.6%, U.6 = 16.7%, SGS = 22.0%
The last figure, SGS comes from John Williams at shadowstats.com, a site that looks at the data and uses the same methodology that was used under Reagan and Carter.
The second way to look at it is to proclaim that things are truly good and that the economy is recovering. That would mean that USTs are no longer the store of wealth that they were supposed to and that interest rates will mean negative returns for all those people that ran to bonds during the post 2008 pessimism.
But if interest rates start to go higher what does this mean for the US housing market and American business investment? How about commodity prices? After all, when the rest of the world is in recovery and the US joins the party one would expect the need for more oil, natural gas, copper, nickel, iron, etc. Can the US economy handle rising prices for very long before it slips into recession once again?
Sorry Mark but given the fundamentals, it is hard to be very positive for the American economy. There is too much non-performing debt that needs to be written down before a sustainable recovery can take place.
Average cost of health care for a family of four:
"Total premiums for family coverage, taking into account both employee and employer contributions, are $13,770, up 3 percent from last year, the survey found.
That's a hefty 14 percent, or $482, more for family health insurance in 2010 than in 2009, according to a survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust, two nonprofit organizations that focus on health policy issues. (Kaiser Health News is a part of the foundation.) "
We have seen chirpy post by Dr. Perry on store front health clinics and the like, and that's all good.
But seriously, you want to cover your family in America, it adds up. I think the coverage Dr Perry gets from the public University of Michigan is probably good enough for the rest of us.
Job growth remains very weak. However, there's hope it'll pick-up. Also, there's relief a double-dip recession is less likely, and Obama will announce a tax cut stimulus plan next week.
Two months before the election, Obama has basically declared the war in Iraq over, and desperately needs success in the new Israeli-Palestinian peace talks.
Moreover, I may add, it looks like Cash-for-Clunkers was a failure:
Study: Cash For Clunkers Was A Wash
September 4, 2010
The government's "cash for clunkers" program boosted auto sales by 360,000 during the two months it was in place, according to a new study.
But in the seven months that followed, sales were down by 360,000 compared with what they would have been without the program, the study found.
And a related study:
Used Car Prices Soar
September 03, 2010
A recent study shows prices have soared in the past year.
The price for the average used vehicle is up 10%.
"The government's "cash for clunkers" program boosted auto sales by 360,000 during the two months it was in place, according to a new study."
Peak, what is your source for this number? The 360k number seems too low. I remember reading that something like 750k clunkers were destroyed through the CFC program, which seems more realistic considering the $3 billion spent at $2500-4500 per clunker. That # of clunkers would require the purchase of the same # of new cars during the program period.
The CFC program is one of my favorite examples of sheer stupidity and waste in government. There were many other losers, but I don't want to start on the subject right now.
Ron, the study was done by Amir Sufi of the University of Chicago and Atif Mian of the University of California, Berkeley.
VangeIV, why would the BLS lie and why would anyone take the ghost data from shadowstats seriously?
If you believe unemployment is understated, then productivity is understated, inflation is overstated, and real GDP is understated.
Also, to make the U.S. economy look weaker, the conspiracy has to extend beyond U.S. macro-data, e.g. U.S. imports are lower than reported or exports are overstated by U.S. trading partners.
Moreover, markets, which use real money, don't accept the the ghost data from shadowstats.
It's much more likely BLS data have become more accurate over time, reflecting reality, while the shadowstats data became less accurate.
VangeIV, why would the BLS lie and why would anyone take the ghost data from shadowstats seriously?
There is incentive for the government to overestimate GDP growth and underestimate inflation because it allows it to borrow at lower rates and to rob savers and SS recipients of some purchasing power. As for John Williams, he reports all of the numbers that BLS reports but also comes up with a figure that uses the same methodology that BLS used before they were changed. The same methodology allows for a proper comparison to previous periods.
f you believe unemployment is understated, then productivity is understated, inflation is overstated, and real GDP is understated.
I don't believe that it is "understated." I point out that the definition has been changed and we no longer count the underemployed, those unemployed but so discouraged that they are not looking for work, and other classifications as unemployed as we used to under Carter and Reagan.
Inflation is clearly understated.
http://tinyurl.com/34b5ucl
So is unemployment.
http://tinyurl.com/yfw5zxj
GDP is overstated.
http://tinyurl.com/248z2s2
Also, to make the U.S. economy look weaker, the conspiracy has to extend beyond U.S. macro-data, e.g. U.S. imports are lower than reported or exports are overstated by U.S. trading partners.
You are confused. Higher imports mean a weaker America because they imply that the US is not saving enough.
Moreover, markets, which use real money, don't accept the the ghost data from shadowstats.
Wrong again. The gold market is confirming that Williams was right and Bush/Obama were wrong.
It's much more likely BLS data have become more accurate over time, reflecting reality, while the shadowstats data became less accurate.
Not at all. But in either case, you would still need to apply the same methodology to the historical data as the current data to get a fair comparison. No matter how you look at it, we see that the current situation is not any better than what Americans experienced in the 1970s.
VangelV, the government has a greater incentive to acquire complete and accurate data. Otherwise, you get "garbage in" and "garbage out."
Here's what the BLS says:
More on the CPI: The BLS Responds!
September 9, 2008
In calculating the CPI, the BLS faces a set of well-known but difficult challenges, including dealing with consumer substitution behavior, accounting for product quality change, and handling the introduction of new products like Ipods and new distribution channels like the Internet. With respect to each of these issues, we attempt to employ the most advanced methods available, subject to the requirement that those methods also be objective and reproducible. There is no perfect way, however, to measure the welfare gains and losses that consumers experience when prices change and products appear and disappear. Thus, we know that the CPI is not perfect, but we do not have an estimate of any statistical “bias” in the index; if there was an accurate and reliable method to estimate such a bias, we would use that method to improve the CPI by eliminating the bias.
John S. Greenlees, Ph.D.
Research Economist
Division of Price and Index Number Research
US Bureau of Labor Statistics
An obsolete, inaccurate, and incomplete methodology will lead to incorrect results.
Higher or rising imports mean U.S. demand is stronger, and the U.S. has been the only country in the world that can expand with huge negative net exports, year after year, which is a sign of strength.
Your alternative CPI chart shows gold fell when inflation accelerated and gold rose when inflation decelerated. So, how can you assume the rise in gold is caused by accelerating inflation?
A more likely explanation is the U.S. began a structural bear market (or long-wave bust cycle) in 2000, and foreigners have been absorbing dollars, i.e. the world is flooded with dollars, although there are too few dollars in the U.S. (which eventually need to be absorbed by the Fed, most likely at huge losses to foreigners).
Here's what the BLS says:
....In calculating the CPI, the BLS faces a set of well-known but difficult challenges, including dealing with consumer substitution behavior, accounting for product quality change, and handling the introduction of new products like Ipods and new distribution channels like the Internet. With respect to each of these issues, we attempt to employ the most advanced methods available, subject to the requirement that those methods also be objective and reproducible. There is no perfect way, however, to measure the welfare gains and losses that consumers experience when prices change and products appear and disappear. Thus, we know that the CPI is not perfect, but we do not have an estimate of any statistical “bias” in the index; if there was an accurate and reliable method to estimate such a bias, we would use that method to improve the CPI by eliminating the bias.
The critique of the BLS is valid. If it changes the methodology by using geometric weighting (one of many changes) then it has to use the same method for an apples to apples comparison. It does not do that. When we apply the old method to all of the historical data we see that inflation and unemployment today are higher than is being reported. Of course, we could apply the new method to the historical data and show that unemployment was not as low as was being reported in the past even though people were still not working or that reported prices are lower even though prices were going up at a rapid clip.
The method changes were made for political reasons. The new methods were not applied to the past because of political reasons. The BLS is a political body run by political appointees.
An obsolete, inaccurate, and incomplete methodology will lead to incorrect results.
If the methods were obsolete, why didn't the BLS apply the new ones to the old data? When you have a new method that magically reduces CPI by a percent and unemployment by 5% it makes sense to apply it backwards so that we can do a proper comparison with past periods.
Higher or rising imports mean U.S. demand is stronger, and the U.S. has been the only country in the world that can expand with huge negative net exports, year after year, which is a sign of strength.
Economic strength is measured by real production, not by consumption that was based on borrowing from abroad.
Your alternative CPI chart shows gold fell when inflation accelerated and gold rose when inflation decelerated. So, how can you assume the rise in gold is caused by accelerating inflation?
Gold is going up because people are losing faith in the fiat currencies. It will do well in deflation as well just as it did during the Great Depression when its role as a monetary media was recognized by the public.
A more likely explanation is the U.S. began a structural bear market (or long-wave bust cycle) in 2000, and foreigners have been absorbing dollars, i.e. the world is flooded with dollars, although there are too few dollars in the U.S. (which eventually need to be absorbed by the Fed, most likely at huge losses to foreigners)
The USD will lose its reserve status when the Fed is forced to take its notes back because foreigners are no longer willing to accept them as money. The USD is dead. It helps for you to recognize it.
VangelV, of course, improvements in the methodology change historical data, and the economy today isn't the same compared to 30 years ago.
You even state the old method is faulty by saying unemployment and inflation are higher than reported. The Phillips Curve shows there's an inverse relationship between unemployment and inflation.
High unemployment typically means high productivity, which lowers the inflation rate. I doubt anyone believes the U.S. economy over the past 30 years has been in a period of stagflation. It's much more likely the U.S. had one of the greatest periods of prosperity (in part, because of the Information Revolution).
Moreover, there's no reason why BLS economists would skew the data one way or the other, which would defeat their purpose as technocrats. There's no proof method changes were made for political reasons. Skewing one variable will skew all the others, i.e. some variables will look better and some worse, because everything in economics is interrelated. So, there would be no confidence in the reported data.
Economic strength is measured by more than production. Capturing greater gains-in-trade is also a measure of relative strength. There are many factors that determine economic strength, and the U.S. economy has been much stronger than any other economy or groups of economies for many decades. The U.S. economy has been the main engine of growth pulling the rest of the world's economies.
The U.S. dollar is the most demanded currency in the world, and the Euro is a distant second. I doubt people will be using gold bars or gold coins to buy assets and goods.
VangelV, of course, improvements in the methodology change historical data, and the economy today isn't the same compared to 30 years ago.
It does not matter. The BLS never applied the new methodology to the historical data so that it could do an apples to apples comparison. If this year you introduce a method that stopped counting some people that used to be considered unemployed last year you can't say that the unemployment rate is better than last year unless you apply the methodology to the old data. Saying that you shouldn't because the economy is different is not valid.
You even state the old method is faulty by saying unemployment and inflation are higher than reported. The Phillips Curve shows there's an inverse relationship between unemployment and inflation.
I never said that it was 'faulty.' I said that it defined inflation differently than the way it was in the past. In the old days when the price of beef went up it showed up as an increase in the reported CPI. Now we have the BLS argue that consumer prices did not go up because people will eat less beef and eat more chicken or pork instead. Any method that measures price increases in one period while ignores them in another is not valid and cannot produce reliable data for comparison purposes.
High unemployment typically means high productivity, which lowers the inflation rate. I doubt anyone believes the U.S. economy over the past 30 years has been in a period of stagflation. It's much more likely the U.S. had one of the greatest periods of prosperity (in part, because of the Information Revolution).
The issue is the employment rate. It is now higher than it has been in more than 20 years. Period. End of story.
I also doubt that the US has had one of the greatest periods of prosperity over the past 30 years. It is obvious that when you add more women and immigrants to the labour force and you have individual workers spend more time on the job you will get more production. But it is doubtful that the per person hourly output has improved much over 30 years. Of course, when Americans spent far more than they made they looked much more prosperous than they really were. Now the party is over and we have more American families insolvent than at any time in history.
Moreover, there's no reason why BLS economists would skew the data one way or the other, which would defeat their purpose as technocrats. There's no proof method changes were made for political reasons. Skewing one variable will skew all the others, i.e. some variables will look better and some worse, because everything in economics is interrelated. So, there would be no confidence in the reported data.
The BLS is a political body and has every incentive to report figures that would allow the US government to borrow at lower rates. The motives behind the method changes are not important because it was easy for the BLS to apply the methods to the historical data so that we could do a valid historical comparison. The fact that it did not tells us what we need to know. The BLS is not interested in transparency and truth. It only cares about making life easier for its political masters.
Economic strength is measured by more than production. Capturing greater gains-in-trade is also a measure of relative strength. There are many factors that determine economic strength, and the U.S. economy has been much stronger than any other economy or groups of economies for many decades. The U.S. economy has been the main engine of growth pulling the rest of the world's economies.
The US makes far less stuff as a percentage of what it uses than it used to not all that long ago. While it is obvious that its productive sector is still strong, it cannot offset the predator class that consumes far more than it produces and depends on transfer of wealth and income from the productive to itself.
The game is about over for the US. Its currency is on the edge and while it could rally again during a crisis its fate is sealed as hyperinflation looms over the horizon. There is no way for the government to pay off its debts and its SS and Medicare obligations with money that will have the same purchasing power as it does today.
The U.S. dollar is the most demanded currency in the world, and the Euro is a distant second. I doubt people will be using gold bars or gold coins to buy assets and goods.
The US dollar is a fiat currency that is issued by a bankrupt government that has unfunded liabilities and debts that stand at more than 1000% of GDP, has two unfunded wars abroad, a military that is in more than 100 countries around the world, and a welfare state that is destroying the taxpayer. That makes it a lousy substitute for a real medium of exchange that is a store of value. If I am right we will see gold over $2,000 an ounce and well on its way to more than $5,000 with an eventual hyperinflationary episode that destroys it the way your country's previous fiat money was destroyed.
VangelV, you seem convinced the U.S. economy is not dynamic enough to make appropriate adjustments (to prevent skewed results), your economic theories make more sense than orthodox economic theories (so, the data and the mathematics are wrong), and the BLS is corrupt (since they're really politicians). No wonder you believe the U.S. hasn't been most prosperous over the past 30 years.
I think the administration has every incentive to lie but what the administration's ability to force the BLS to push less than accurate numbers is another question entirely...
Scott or someone showed a link from the BLS: THE EMPLOYMENT SITUATION -- AUGUST 2010
the 2nd paragraph: The number of unemployed persons (14.9 million) and the unemployment rate (9.6 percent) were little changed in August. From May through August, the jobless rate remained in the range of 9.5 to 9.7 percent...
The BLS's U6 number for August is 16.7 seasonally adjusted...
Haven't heard a word from Joe Biden yet...
VangelV, you seem convinced the U.S. economy is not dynamic enough to make appropriate adjustments (to prevent skewed results),...
I am convinced that the move towards higher taxes, more regulations, foreign wars, a bigger public sector, and constant interventions by the Fed are making the US much weaker than it should be. There is little doubt that the US economy can recover but only if government shrinks substantially and gets out of the way of productive people. There is no reason to believe that it will.
...your economic theories make more sense than orthodox economic theories (so, the data and the mathematics are wrong), and the BLS is corrupt (since they're really politicians).
No, the data and math support my position. The US is bankrupt because it can't possibly pay off all of its debt and meet its unfunded SS and Medicare obligations.
No wonder you believe the U.S. hasn't been most prosperous over the past 30 years.
I never said that there hasn't been prosperity. I simply point out that the illusion of prosperity that you are pointing to was obatined by adding many women into the work forces, by having salaried workers spend much more time at work or working at home, by introducing new labourers due to immigration, and by spending far more than the federal government, states, businesses, and workers earned.
Right now I see the US financial system being technically insolvent due to loans that can never be paid off. Now I have no doubt that the federal government and the Fed can't bail out the banks by taking those loans off their books or by insuring them. But that is not a sign of strength. All you will get is a bankrupt federal government that has even more bad debt on its books. If we get the predicted GSE reset of mortgages that will allow existing borrowers to reset their mortgages at much lower rates we will see a run on the bond market that could easily get out of hand and lead to hyperinflation even faster than many of us can imagine.
None of the points that I am making are unique or profound. They are simple and very logical conclusions reached by logical and observant analysts who can think for themselves and do not go sleepwalking through life as you seem to. Try reading up a bit on the subject and see if you can refute the reasons given for the demise of the USD.
http://tinyurl.com/yaw8bfe
http://tinyurl.com/26t4ghc
http://tinyurl.com/3yrcmbq
http://tinyurl.com/27ufsw4
http://tinyurl.com/qxkhcp
http://tinyurl.com/2vvwfat
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