Employment Trends Index Gains in November

Yesterday the Conference Board released its latest Employment Trends Index, and reported that the labor market index increased by 1.4 points in November and is now 9.3% above the level a year ago (see chart above).  The Employment Trends Index is a composite of eight labor-market variables and is considered to be a leading indicator for trends in labor market conditions and total nonfarm employment.  In November, 7 of the 8 components improved (Initial Claims for Unemployment Insurance, Percentage of Firms With Positions Not Able to Fill Right Now, Number of Temporary Employees, Part-Time Workers for Economic Reasons, Job Openings, Industrial Production and Real Manufacturing and Trade Sales), which helped drive the index to its highest level in two years. 

Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board said: 

“The disappointing employment numbers released last Friday are at odds with most of the leading indicators included in the Employment Trends Index. While we are not expecting economic activity or employment to grow rapidly anytime soon, we do expect employment to continue to moderately increase, following the trend of recent months.”

MP: The Employment Trends Index has had a pretty accurate track record of predicting past trends in payroll employment back to 1973. In that case, the ongoing gains in the index predict that we can look for gradual improvements in labor market conditions. 

Perfect SAT Scores: Male vs. Female for 2010

Perfect scores by gender for the 2010 SAT tests for mathematics, critical reading and writing. 

Government Website Promotes "3% or Less" Down

Here's a brochure titled "How to Buy a Home With a Low Down Payment: A Consumer’s Guide to Owning a Home with Less Than Three Percent Down," which was developed by the Mortgage Insurance Companies of America in cooperation with the Extension Service of the U.S. Department of Agriculture, and appears on this government (GSA) website.

“Many people mistakenly believe that you have to come up with a down payment equal to 20 percent of the price of a home. In fact, home loans with down payments of less than 20 percent are becoming increasingly popular. They are called “low down payment mortgages." This is good news for the millions of home buyers who are finding it difficult to save a large down payment, especially for their first house. More and more borrowers are taking advantage of low down payment mortgages and becoming homeowners with less than three percent down."  

Q: Isn't that exactly the kind of mortgage lending that helped cause the housing bubble? 

HT: Joy Pavelski

ISM Employment Indexes Above Fall 2007 Levels

From Larry Kudlow:

"All is not doom and gloom on the economy. There is some optimism. In fact, there's a mystery to Friday's jobs report, since it just doesn't tally with all the other good economic news. Retail sales are up four straight months, and chain-store sales for the early holidays surprised on the upside. Manufacturing reports have been solid. Even for November, the Institute for Supply Management's surveys for manufacturing and services were solid. The ISMs are basically real-time economic indicators. And oddly enough, the employment component of each looks fairly strong."

The nearby chart shows the employment indexes from the ISM-Manufacturing and Non-Manufacturing reports for November that were released this week.  The Employment Index for the service sector of the economy increased in November for the fourth month in a row, and for the 9th time in the last 12 months, and is now at a pre-recession level of 52.7, the highest since October 2010.  The index for employment in the manufacturing sector has been above pre-recession levels for the last year now. The positive trends in these employment indexes suggest that the labor market might be stronger than the BLS report, and the "underlying trend in job growth should accelerate in the months ahead," as Brian Wesbury and Bob Stein reported yesterday. 

Perfect SAT Math Scores: Male-Female Ratio of 2:1

Update: Mean Scores for the SAT Math Test, 2010

Males: 534

Females: 500

and Standard Deviation

Males: 118

Females: 112

In September I had a post about the 2010 Math SAT test results, and reported on the gender differences in favor of males, who scored 34 points higher on average this year than their female counterparts.  This follows a persistent 30+ point differential in favor of male high school students that goes back to at least the early 1970s. 

This is a follow-up to that post, and the chart above (click to enlarge) displays the results of the 2010 Math SAT test by gender for all scores between 580 and 800 by 10-point intervals.  Notice that:

1. For all math SAT scores of 580 and above (70th percentile), male students outnumbered female students.

2. As the scores increased by 10-point intervals from 580 to 800, the male-female ratio increased in almost all cases, reaching a peak of 2.08-t0-1 for perfect scores of 800.

3. More women (827,197) than men (720,793) took the SAT test in 2010, and to adjust for those differences in sample sizes, we can calculate that 1.12% of males had perfect 800 scores compared to 0.47% of females, for an adjusted male-female ratio of 2.38:1 (vs. the 2.08 unadjusted ratio). By either calculation, there were more than twice as many male high school students getting a perfect score on the SAT Math test than female students.  

As I reported before, these results are especially significant because female high school students are generally better students overall than males, and equally or better prepared for the SAT Math test than male students:

a. Females outnumbered males in the top 10% of their 2010 classes - there were 127 female students in the top 10% of high schools for every 100 male students (56% female to 44% male).

b. Nationwide, there were 144 female high school students with GPAs of A+ for every 100 males (59% female vs. 41% male). 

c. Females had a higher average GPA of 3.40 compared to 3.26 on average for male students in 2010. 

d. More than half of female high school students (51%) took more than 4 years of mathematics, compared to 49% of male students.

e. There were 117 female high school seniors who took AP or Honors Math for every 100 male students.  

Bottom Line: Despite now being better prepared academically by many different measures, both overall and for mathematics specifically, female high school students score significantly lower on the SAT math test, and the 30-point differences in test scores favoring males has persisted since Richard Nixon was president. 

And yet, we hear statements like this from the gender activists: "There just aren't gender differences anymore in math performance," says University of Wisconsin-Madison psychology professor Janet Hyde, "So parents and teachers need to revise their thoughts about this.  Stereotypes are very, very resistant to change, but as a scientist I have to challenge them with data."

Given the significant and persistent differences in SAT Math tests that have persisted over many generations, and continue to be found for all ethnic groups, the scientific data about gender differences in math performance seem to be challenging Professor Hyde's fact-resistant stereotypes.  

Update: Janet Hyde explains the 30-point male advantage on the SAT math test as follows,  "Greater numbers of girls take the test now than boys, because more girls are going to college. So you're dipping farther down into the distribution of female talent, which brings down the average score," says Hyde. "That may be the explanation for (the results), rather than girls aren't as good at math."

But that would imply several outcomes that are not happening:

1. The average female test score should be falling over time as more girls take the SAT test and "dip farther down in the distribution of female talent." In fact, the opposite is happening - average female scores have increased over time, not decreased (see graph above).

2. If more female test-takers dip farther down in the female distribution, the male-female gap should be widening, when in fact it's been remarkably constant over time (see graph).

Further, the "dipping down the female distribution" theory would only potentially explain average test scores, and would NOT explain at all why males outnumber females by huge 2-to-1 ratios for test scores on the high end.  

Update: Graph below shows male-female ratios for all test scores between 200 and 800:

Phrase of the Day: Frugality Fatigue

WSJ -- "Retailers' reports of robust November sales offered more evidence that the lackluster U.S. economy may finally be gaining momentum, despite stubbornly high unemployment. After several years of relative thrift, consumers may be parting with their money more willingly simply due to pent-up demand, something industry watchers are calling "frugality fatigue."

Schumpeterian Creative Destruction in IT

1. The Apple iPad is a Kindle Killer - Amazon Kindle's market share fell 15 points in November to less than half of the e-reader market (47%), due to competition from the Apple iPad (32% market share). 

2. "A research firm predicts that in 2011, computing’s third major technology wave will become mainstream, when computers held in one’s hand — smartphones and tablets — really take over and start putting personal computers in the rearview mirror."

Bright Spots: Temp Help and Mfg. Overtime Hours; But Jobless Recovery May Continue to 2012

Today's disappointing BLS employment report reflects a fairly weak job market and a continuation of the "jobless recovery" that will likely continue well into 2011, maybe even into 2010.  Looking back at the periods following the last two recessions, the jobless rate continued to rise for 15 months (until June 2002) following the end of the recession in March 19991, and it took 29 months, until August of 1993, before the unemployment rate fell back to the same level that prevailed at the end of recession.  Following the 2001 recession, the jobless rate continued to rise for another 19 months (June 2003), and it took 32 months until July 2004 for the jobless rate to return to the same level as the month of the recession's end in November 2001.  If this recovery follows the same pattern, it might be 2012 before this "jobless recovery" ends. 

Several bright spots in today's jobs report include:

1. Employment in temporary help services continued to grow by 39,500 jobs in November, which is the 13th increase during the last 14 months.  Since the cyclical low of 1.724 million jobs in September 2009, there has been an increase of 494,000 jobs in the temporary sector to 2,218 million jobs in November.  That level of temporary and contract employment jobs is the highest since September of 2008, 26 months ago. 

2. Average overtime hours for the manufacturing sector reached a 31-month high of 4.0 hours per week in November, the highest level since April 2008. 

Taken together, it appears that many U.S. companies are meeting the increasing demand for their products and services by:  a) using temporary and contract employees instead of hiring permanent, full-time employees, and b) using existing employees more intensely with increased overtime hours in the manufacturing sectors.  Both of those factors would be characteristic of an economy that is in recovery measured by production, income and sales, but is not yet creating enough full-time permanent jobs to bring down the overall jobless rate.     

Update: See the always-insightful analysis here from Scott Grannis, who writes "Despite the failure of job growth to pick up, there is no sign that it is slowing down. The economy continues to plod ahead at a slow pace. If this keeps up, and worker productivity rises at its long-term average pace of 2% per year, then we can expect to see about 3.5% real GDP growth going forward."

And here's some commentary from Brian Wesbury and Bob Stein on today's report: "Given recent data on consumer spending as well as growth in manufacturing production and construction, the underlying trend in job growth should accelerate in the months ahead."

Free Market Capitalism: Best Path to Longer Life

HT: Coyote Blog via Pete Friedlander

Monster Employment Index Increases by 13% in November: 10th Straight Month of Annual Growth

The Monster Employment Index for the U.S. was released today with the following highlights:

1. Compared to last November, online job demand was up by 13% this year, and November marked the tenth consecutive month of a positive annual growth rate in the index, and the eighth straight month of double-digit growth (see chart above).   

2. 17 of the 20 industries monitored by the Index showed positive annual growth trends.

3. All 28 metro markets recorded positive annual growth in November, with especially strong gains in Detroit (53%), Philadelphia (51%), Orlando (45%), Cleveland (37%), and Minneapolis (36%).

D.C.'s Mom 'n' Pops Aren't Afraid of Walmart; They're Afraid of Wal-Mart's Greedy Customers

From today's Washington Examiner, an article I have edited slightly and re-titled "D.C.'s Mom 'n' Pops Afraid of Walmart's Cost-Conscious Customers":

The District's family-owned businesses are worried that greedy consumers who shop at Walmart for its everyday low prices will kill their livelihoods if the retailer forges ahead with plans to open four locations in the coming years. 

"I think we've got enough local grocery stores around," said Jeremy Frost, manager of 5th Street Ace Hardware. "They (Wal-Mart customers) drive local small businesses out of business.  It's a slippery slope once you start letting consumers' greed for low prices determine which merchants create the most value for the District.  Once you let value-conscious customers shop at four new Walmarts in ... I can see a lot of developments turning to big box businesses that would appeal to District families trying to stretch their hard-earned dollars as far as possible."

Weekly Jobless Claims Fall to 27-Month Low

The Department of Labor reported today that the four-week average of initial unemployment claims fell to 431,000 for the week ending November 27, which is the lowest level since the first week of August 2008, more than two years ago (see chart above).  The number of workers continuing to receive jobless benefits fell to 4,288,500 last week on a four-week average basis, the lowest level since early December 2008.

More "Non-End-of-the-World Economic Data"

Thanks to Daniel Gross for that great headline.   

1. Automakers reported strong sales gains in November, as "the economy accelerates out of the 2007-2009 slump."  U.S. vehicle sales in November of 873,323 light trucks and passenger cars were above last year's sales by 16.9%, led by a whopping 26.6% gain in light truck sales and a more modest 7.4% improvement in passenger car sales. Year-to-date sales of 10.44 million units so far this year are more than one million vehicles ahead of the 9.4 million units sold last year through November.  On a seasonally adjusted annual rate basis, vehicle sales in November topped 12 million units for the second month in a row for the first time in more than two years, going back to the late summer of 2008.    

2. According to today's ADP National Employment Report, private sector employment increased by 93,000 jobs in November, the largest monthly job gain in three years and the tenth consecutive monthly improvement.  October's employment increase was revised upward from a previously reported 43,000 jobs to 82,000, bringing the total gain over the last two months to 175,000 new private-sector jobs. More than half of the job increases in November (54,000) were added by small businesses (fewer than 50 employees).  

Now here's a possible connection between these two reports: Pickup trucks are typically purchased by small business owners and entrepreneurs, and the huge increase in November truck sales is an indication of increased business activity for America's small businesses.  The increased business activity for small businesses also translates into increased hiring by small businesses, which we saw in ADP's November job report.   

See related CD post "The Pickup Truck Indicator: The Recovery is Real."

Interactive Chart of the Day: Global House Prices

From The Economist, a great interactive chart of global house prices, with options to adjust home prices for inflation and income, and compare to rents. Compared to the U.S. housing bubble, the bubble was much worse in countries like Australia and South Africa, and it doesn't matter whether or not you adjust for inflation or income levels.      

Rasmussen Employment Index Reaches 2-Year High

I'm reporting this index for the first time - the monthly Rasmussen Employment Index of worker confidence, which was released today and is based on a survey of 8,730 working Americans in November.  Here's what Rasmussen is reporting:

"The Rasmussen Employment Index posts its largest single-month gain in over a year and reaches its highest level since September 2008 for the third straight month. At 84.0, November's index is up six points from last month and 18 points from the beginning of 2010. The index, which measures confidence of workers in the employment market, is also up 22 points from a year ago when the index was 61.7 (see chart above)." 

MP: More evidence that while it might be slower than everybody would like, there is a gradual but real recovery happening in the U.S. labor market based on this index of worker confidence, along with the steady improvements almost every week this year in the ASA Staffing Index for temporary employment, and the gains in online job openings in almost every month since the summer of 2009, both reported earlier today.  

ASA Staffing Index At Highest Level Since 2007

From today's weekly report from The American Staffing Association (ASA):

"During the week of Nov. 15–21, 2010, temporary and contract employment rose 0.87%, raising the ASA Staffing Index up one point to a value of 101.  At a current index value of 101, U.S. staffing employment is 46% higher than the level reported for the first week of the current year and is 17% (23%) higher than the same weekly period in 2009 (2008)."

MP: The weekly staffing index of temporary and freelance employment has now been at a level of 100 or higher for the last ten weeks for the first time since the spring of 2008, more than two and a half years ago. Further, the 101 index reading for the Week 47 matches the same index level for two weeks in March 2008, and reflects the strongest demand for contract, freelance and temporary employment since an index reading of 104 in December 2007.  As a leading indicator of nonfarm employment, the ongoing improvements in the nation's key barometer of the demand for temporary and freelance workers signal future gains in permanent employment opportunities. 

The ASA also released a monthly report last week for results of the staffing industry through the third quarter of this year, here are some highlights:

1. U.S. staffing companies employed an average of 2.6 million temporary and contract workers per day from July through September. This is 24.9% more staffing employees per day than in the same quarter last year and an increase of 8.1% in average daily staffing employment over this year's second quarter. 

2. The year-to-year percentage increases in employment in this year's second and third quarters are comparable to the industry's job growth rates in the early 1990s—and the strongest since. 

3. "During the past 12 months, staffing firms have added over a half million new jobs to the economy," says ASA president and chief executive officer Richard Wahlquist. "Demand for temporary and contract help is expected to remain strong as businesses turn to flexible work force solutions to help them improve efficiency and productivity while adjusting to changing economic conditions."

Markets in Everything: Online Jury Trials

"The website eJury provides an attorney the opportunity to "pre-try" the case before it goes to trial in front of an actual jury at the courthouse.  Cases at the courthouse are usually tried to juries of 12 people.  At eJury, each case is tried to a minimum of 50 people.  This provides the attorney with a tremendous amount of feedback which he/she will use to establish a settlement value, find strengths and weaknesses in the evidence, learn "public" attitudes, improve jury selection, discover the most effective arguments."

Qualified eJurors get paid $5-10 depending on the size of the case, here's a sample case that paid $10.  Attorneys pay $350 per page, with a 2-page minimum and a suggested 5-page maximum, and usually get a minimum of 50 verdicts. 

Markets in Everything: Cash for Hair, Part 2

From the New York Times last week, an article about harvesting the best hair in the world: naturally blond hair in Russia, which is a "golden treasure" for the global beauty industry.  The going rate for "a 16-inch braid, the shortest length a buyer will consider, fetches about $50." 

HT: Greg Allar

Online Job Openings Reach 27-Month High in Oct.

"Online advertised vacancies rose a modest 47,400 in November to 4,457,200 following an increase of 113,700 in October, according to The Conference Board Help Wanted OnLine (HWOL) Data Series released today (see chart above).  The nation’s Supply/Demand rate stood at 3.37 unemployed for every advertised vacancy in October (the last available unemployment data)—a figure that is down from a peak of 4.73 in October 2009."

"In November, demand for workers continued to be positive, albeit moving at a disappointingly slow pace for the last few months," said June Shelp, Vice President at The Conference Board. "November was a surprisingly quiet month throughout the nation, with most states posting small gains / losses in advertised vacancies. In this weak U.S. economic recovery, office help, construction jobs, and positions in business and finance continue to show very sluggish growth."

MP: The number of online vacancies in November at 4.457 million was almost 31% above the advertised vacancies in the same month last year, and was the highest monthly count in more than two years (since August of 2008).  

Markets in Everything: Cash for Human Hair

At the Hairwork website you can sell or bid on human hair, here's an example:

"I am cutting my hair and it is mostly 12.5-13.5 inches long, with the longest strands reaching to 15.5 inches (pictured above).  I don't straighten or blow dry. Silky, smooth, and lays straight with no need for straightening. Never drink, never smoke, healthy diet. I will cut it after money is received. I receive compliments all the time on my hair. $600.00 or best offer."