Friday, February 03, 2012

Highlights from Today's Employment Report

Some highlights of today's employment report:

1. Temporary employment reached a 3.5-year high in January of 2.4 million jobs, the highest level since May 2008 (see chart).

2. Manufacturing overtime hours, at 4.3 hours in January, were at the highest level since 2006 (see chart).

3. Manufacturing companies hired an additional 50,000 workers in January, bringing the 12-month total of new manufacturing jobs to 235,000, and the 24-month total of new manufacturing jobs to almost 400,000.  

4. For the eighth consecutive month starting last June, the January manufacturing jobless rate was below the national average rate (not seasonally adjusted).

5. The construction industry has added more than 50,000 jobs in the last two months.

6. Oil and gas extraction employment has increased by 14.2% over the last 12 months to 186,100, the highest level in 20 years.

Update:

7. The more comprehensive measure of employment from the BLS household survey (civilian employment) showed a 847,000 job increase in January, the greatest monthly increase since 2003, and brings the total job increase over the last 12 months to 2.3 million.

53 Comments:

At 2/03/2012 9:43 AM, Blogger bob wright said...

According to First Trust, the World Semiconductor Trade Statistics (WSTS) organization estimates that global semiconductor sales will total a record $302 billion in 2011. That is a 1.3% increase from 2010’s record sales, according to the Semiconductor Industry Association.

 
At 2/03/2012 9:55 AM, Blogger morganovich said...

oh, and the labor force participation rate dropped to 30 year lows.

 
At 2/03/2012 10:05 AM, Blogger juandos said...

Not to worry though, there will be a correction issued forthwith as there have been every week since Jan. of '09...

Again Zero Hedge has the goods: Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation...
============
CNBC notes: US Small Business Hiring Flat in January: Poll

 
At 2/03/2012 10:19 AM, Blogger Jon Murphy said...

And who says the private sector isn't hiring?

 
At 2/03/2012 10:27 AM, Blogger VangelV said...

LOL...This is beginning to look more and more like Stalin's USSR and Mao's China by the day. Change the old numbers to make the current period look good and everyone forgets what the reality is. Give it a few hours and you will see that the analytical groups will find the sleight of hand to paint this pretty picture. The problem is that illusion is trumped by reality. Expect the Fed to keep printing to offset the weakness in the real economy and for that liquidity to push many prices substantially higher even as the real economy keeps getting weaker.

 
At 2/03/2012 10:47 AM, Blogger Buddy R Pacifico said...

These are excellent numbers with even construction showing some growth, which is surprising, especially in January.

There is one puzzling area from the BLS release:

"In January, employment in information declined by 13,000, including a loss of 8,000 jobs in the motion picture and sound recording industry."

Is entertainment an escape during hard times and less in demand as the economy improves?

 
At 2/03/2012 11:25 AM, Blogger rjs said...

one nit to pick; "The more comprehensive measure of employment from the BLS household survey"

the establishment survey is based on returns from about 1 in 3 employers, while the BLS household survey is based on results from only 60,000 households, or about 1 in 2000 nationwide...

http://bls.gov/news.release/empsit.tn.htm

 
At 2/03/2012 11:31 AM, Blogger Benjamin said...

We would see a sustained secular bull market if Bernanke would take off the diapers and short pants and get serious about growth.

The econo-shamans are chanting verse about invisible inflation, and theo-monetarists are genuflecting to gold---but that is not what a central banker should do.

 
At 2/03/2012 11:32 AM, Blogger rjs said...

buddy, re "construction showing some growth"

all this data is seasonally adjusted..

 
At 2/03/2012 11:41 AM, Blogger morganovich said...

"self employed" is the new unemployed.

no one is "unemployed" they are "consultants".

i think that number is pretty bogus.

 
At 2/03/2012 11:53 AM, Blogger Buddy R Pacifico said...

rjs,

If seasonal adjustment is incorporated in the numbers, then these numbers are encouraging for winter months arn't they?

"Employment in construction increased by 21,000 in January, following a gain of 31,000 in the previous month. Over the past 2 months, nonresidential specialty trade contractors added 30,000 jobs."

 
At 2/03/2012 12:17 PM, Blogger rjs said...

buddy, they are good numbers, but dont necessarily mean more construction workers are working in the winter..."more than normal" would be a way of looking at it...

btw, BLS also adjusted the population control for the household survey for the 2010census...

 
At 2/03/2012 12:28 PM, Blogger juandos said...

Listen To Obama Explain Why The US Labor Force Declined By 1.2 Million And Why Temp Jobs Surged By A Record

 
At 2/03/2012 12:32 PM, Blogger Buddy R Pacifico said...

rjs,

Better for a January is what I meant, thanks.

 
At 2/03/2012 12:40 PM, Blogger rjs said...

adjusted for the census, "not in labor force" increased 1,177,000...the labor force participation rate actually declined to 63.7%...

 
At 2/03/2012 12:59 PM, Blogger rjs said...

http://research.stlouisfed.org/fred2/series/CIVPART

 
At 2/03/2012 2:41 PM, Blogger VangelV said...

adjusted for the census, "not in labor force" increased 1,177,000...the labor force participation rate actually declined to 63.7%...

That point is not getting much play right now.

 
At 2/03/2012 2:47 PM, Blogger morganovich said...

"That point is not getting much play right now."

this is an election year and the BLS and BEA have become monstrously politicized.

that GDP number was farce.

2012, more so than any in recent memory, is going to be the year of the fiddled number.

it's just more cargo cult thinking.

"if we report 8.3% unemployment, people will think things are getting better".

but they won't. the ones with no jobs will still have no jobs. that's what they vote on, not the number you announce.

i have never seen such bad maps so consistently mistaken for the terrain.

the BLS is acting like the IPCC.

 
At 2/03/2012 3:05 PM, Blogger Larry G said...

well heckfire.. who ARE you gonna believe?

 
At 2/03/2012 3:19 PM, Blogger morganovich said...

larry-

it's a good question.

the answer seems to be "nobody at face value".

however, buried in the details and data under the headline numbers, there's s lot to help you figure things out.

eg. when u3 drops but it's all because the size of the labor force dropped, you know jobs are not being created at a rate sufficient to keep up with population.

when GDP is reported as 2.8%, but the deflator is 0.8% when CPI was 3.2%, you know real growth was really only 0.4%, and likely negative apart from a huge jump in inventories.

you need to take these things apart, look at the components and see how the headline number was arrived at. there has been a really worrying trend of the headline number being manipulated.

even the notoriously gimmicky CBO called BS on the unemployment number.

you can also look at bellwethers.

Dow Chemical (DOW) reported its Q4 earnings today and helpfully provided supplementary, detailed information on how much of its sales came from volume changes vs. price changes. Since Dow is so large and diversified, it is a sort of proxy for the economy. Here are some highlights.

North American volume was down 4% year on year. Sales were up only because of 6% price increases. This 4% drop in volume was similar to the 5% volume drop in its Europe, Middle East and Africa segment. Asia was only up 3% yoy in volume; and I saw a comment from an analyst in a Bloomberg article that Dow’s China business was weak last quarter.

this is very much in line with the GDP components - little or negative real growth and mostly inflation driving a nominal increase, but no progress in units.

getting an accurate economic picture is always a game of triangulation.

 
At 2/03/2012 3:25 PM, Blogger Larry G said...

" getting an accurate economic picture is always a game of triangulation"

and I'd be the first to admit I don't know that game well...

but I often wonder how much of this is essentially the same no matter what year or what Presidency.. and how much of this is specific changes to policy reporting based on a particular administration.

if it changes from administration to administration then the numbers and the methods for deriving them are suspect.

But you'd think if they were THAT suspect that folks like WSJ would just scoff at them... and instead come up with their own metrics that in turn would have more credibility ..... eh?

 
At 2/03/2012 3:31 PM, Blogger VangelV said...

but I often wonder how much of this is essentially the same no matter what year or what Presidency.. and how much of this is specific changes to policy reporting based on a particular administration.

The methodology was changed under Clinton. Since then every administration has used the greater leeway to make certain assumptions to paint a much better picture than the actual raw data showed. This is why you should look at the details and not trust the reports.

 
At 2/03/2012 3:40 PM, Blogger morganovich said...

"The methodology was changed under Clinton. Since then every administration has used the greater leeway to make certain assumptions to paint a much better picture than the actual raw data showed. This is why you should look at the details and not trust the reports."

yes.

that said, it really seems to have gotten out of hand in the last year or so. what used to be a little fudging is now great big whoppers. (apart from CPI which has been a mess for 20 years) but at least GDP deflator and cpi used to line up. the internal inconsistency is getting pretty severe.

 
At 2/03/2012 3:40 PM, Blogger Ron H. said...

Buddy: "In January, employment in information declined by 13,000, including a loss of 8,000 jobs in the motion picture and sound recording industry."

Is entertainment an escape during hard times and less in demand as the economy improves?
"

Increasing use of animation?

 
At 2/03/2012 3:43 PM, Blogger morganovich said...

"But you'd think if they were THAT suspect that folks like WSJ would just scoff at them... and instead come up with their own metrics that in turn would have more credibility ..... eh?"

why?

it's not a good story. they are in the readership business, not the wonky detail business.

they pick a narrative (bull or bear) and push it. muddle and conflicting data and abstruse detail is boring.

for every fund manager reading the WSJ are 10 people with etrade accounts that get bored/bogged down in complexity.

i think you are overestimating the sophistication of their bread and butter reader.

 
At 2/03/2012 4:13 PM, Blogger Buddy R Pacifico said...

This comment has been removed by the author.

 
At 2/03/2012 4:40 PM, Blogger Mike said...

Ron & Buddy,

As someone who works in a related entertainment field, I believe the answer is simply obvious stuff that's been going on for a while and further studio/company consolidation has caught up to those who were on the bubble.
Technology makes running a studio so much more efficient that the man power can be slashed with zero ill effects. Small "artisanal" studios can now do everything the big boys used to do because of the much lower price of gear and qualified engineers to run and repair. Much of the movie/tv production companies are finding tax breaks by moving production...my guess is that they also slim down in the process.

It seems to me that file theft is indeed back in style...in movies and music. I think the 99 cent app craze has diverted some music shopping amongst younger demographics.

 
At 2/03/2012 4:48 PM, Blogger Mike said...

Morganovich,

I really hate to be a conspiracy theorist...I swear! But, I think there is a motive in under-reporting stories like this beyond the limited attention span of their audience. Let's not forget who keeps them in business, the advertisers. It's good for both of them if their audience can reasonably be moved into a more optimistic outlook on making new purchases.

Advertising rates are usually the first casualty in a recession and one of the last to come back.

 
At 2/03/2012 4:50 PM, Blogger Ron H. said...

Mike: "As someone who works in a related entertainment field, I believe the answer is simply obvious stuff that's been going on for a while and further studio/company consolidation has caught up to those who were on the bubble."

Thanks, Mike, you're most likely right.

 
At 2/03/2012 4:56 PM, Blogger VangelV said...


that said, it really seems to have gotten out of hand in the last year or so. what used to be a little fudging is now great big whoppers. (apart from CPI which has been a mess for 20 years) but at least GDP deflator and cpi used to line up. the internal inconsistency is getting pretty severe.


That is true. I just saw the TrimTabs commentary about the disconnect between the BLS report and the tax data. He pointed out that BLS used a seasonal adjustment of 3.3 million to transform a figure of 446,000 new seasonally adjusted jobs. You think that there could be some politics involved?

 
At 2/03/2012 4:59 PM, Blogger VangelV said...

I really hate to be a conspiracy theorist...I swear! But, I think there is a motive in under-reporting stories like this beyond the limited attention span of their audience. Let's not forget who keeps them in business, the advertisers. It's good for both of them if their audience can reasonably be moved into a more optimistic outlook on making new purchases.

Advertising rates are usually the first casualty in a recession and one of the last to come back.


I agree. But this is fabulous news for those who are paying attention because it gives them an opportunity to place relatively safe bets that should pay off over the long term.

 
At 2/03/2012 5:10 PM, Blogger PeakTrader said...

Job growth has been accelerating. However, it has a long way to go, given population growth, the unemployed, and the underemployed:

"The economy created 243,000 jobs in January...job growth for the last two months was revised upward, from 100,000 to 157,000 for November, and from 200,000 to 203,000 for December."

 
At 2/03/2012 5:15 PM, Blogger VangelV said...

Job growth has been accelerating.

There is no evidence of this. The participation rate has fallen sharply. That makes the numbers look better but does not change the reality.

 
At 2/03/2012 5:36 PM, Blogger Mike said...

Interesting thought...
I think it was in the first Freakonomics book that they covered home ownership playing a part in unemployment due to a reluctance to move...anybody else see that correlation between 'upside-down' home ownership and the unemployment rate going DOWN, due to people being stuck, unable to take the financial hit and falling out of the labor market?

 
At 2/03/2012 6:18 PM, Blogger PeakTrader said...

VangelV says: "There is no evidence of this."

Unemployment rate hinges on more than job gains
February 3, 2012

For most people, the 8.3 percent unemployment rate is the most visible sign of the economy's health.

But when the rate declines, it's not always because many more people were hired. The unemployment rate can rise or fall even when no jobs are created or lost.

Last month, the rate fell because jobs were added. But that hasn't always been the case in the 2 1/2 years since the Great Recession ended. One reason for the rate's decline is that fewer people are looking for work.

The unemployment rate counts only people who don't have a job and are looking for one. Once you stop looking, you're no longer considered unemployed.

In January, the number of people either working or looking for work -- who collectively form the labor force -- rose. That's an encouraging sign. It suggests that more of the unemployed were optimistic about finding a job.

The situation has shifted over the past year. The labor force has grown. But it hasn't grown as fast as the overall population. The result:

The proportion of the population either working or seeking work has fallen from 64.2 percent to 63.7 percent. That's known as the labor force participation rate.

That drop is a big reason why the unemployment rate has declined in the past year.

 
At 2/03/2012 7:06 PM, Blogger Mike said...

Peak,

"The labor force has grown...... The proportion of the population either working or seeking work has fallen from 64.2 percent to 63.7 percent."

Huh?
Are you talking about the actual 'labor-capable' people in the first sentence and the recognized 'labor force' in the second or is that a contradiction?

Last month, the rate didn't fall because jobs were added, the rate fell because over a million people suddenly weren't counted...

 
At 2/03/2012 7:16 PM, Blogger PeakTrader said...

Mike, when there are fewer people looking for work and more people getting jobs, then the chance of getting a job increases.

 
At 2/03/2012 8:05 PM, Blogger Mike said...

Is that what we were talking about? No wonder I'm confused.

I just thought you said the labor force got bigger and smaller.

 
At 2/03/2012 8:21 PM, Blogger VangelV said...

Peak Trader:

...The proportion of the population either working or seeking work has fallen from 64.2 percent to 63.7 percent. That's known as the labor force participation rate.

That drop is a big reason why the unemployment rate has declined in the past year.


Not only that but more people are working part time. And if you paid attention you would have found that, "Actual jobs, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments – made at the sole discretion of the Bureau of Labor Statistics economists – that 2.9 million fewer jobs gets translated into 446,000 new seasonally adjusted jobs."

Got that? Jobs are down 2.9 million over two months. The reported 446,000 gain comes from an adjustment of 3.3 million. As I wrote above, I see no evidence of material job creation. All I see is a lot of questionable adjustments that smack of political gamesmanship. Perhaps this is why the USD did nothing today.

 
At 2/03/2012 11:33 PM, Blogger juandos said...

the BLS (two minute & 10 sec YouTube clip): The Unemployment Game Show: Are You *Really* Unemployed?

 
At 2/04/2012 4:35 AM, Blogger PeakTrader said...

VangelV, most conspiracy theories lack any real evidence.

 
At 2/04/2012 9:50 AM, Blogger VangelV said...

VangelV, most conspiracy theories lack any real evidence.

What are you talking about? The BLS data is quite clear. The BLS does not count students who have graduated but can't find their first jobs. The BLS does not count the people who get a few hours at Tim Hortons or Wendy's because part time workers are considered as employed. Discouraged workers who have given up are not counted even though they want jobs.

We also see that the 'gains' are often the result of 'adjustments' made by BLS statisticians. As the TrimTabs people point out, the latest seasonal adjustment turned a loss of 2.9 million jobs into a 'gain' of 446,000. The TrimTabs data, which uses real time tax withholding information is clearly diverging from the BLS report. This means that we will see another 'adjustment' after the election no matter who wins it.

I believe that it was Ayn Rand who said that you can ignore the reality but cannot escape the consequences of ignoring reality.

 
At 2/04/2012 12:08 PM, Blogger Buddy R Pacifico said...

Ron H and Mike, thanks for your comments on the drop in entertainment employment.

My guess is that intellectual property theft, more animation and just plain lousy offerings in theater movies have contributed to the malaise.

 
At 2/04/2012 4:11 PM, Blogger PeakTrader said...

VangelV, The Table B1 you cite shows about 2 million jobs were created in the past year, whether it was seasonally adjusted or not seasonally adjusted.

So, what's your point?

You don't believe seasonality exists?

 
At 2/04/2012 9:06 PM, Blogger VangelV said...

VangelV, The Table B1 you cite shows about 2 million jobs were created in the past year, whether it was seasonally adjusted or not seasonally adjusted.

So, what's your point?


My point is about the actual numbers. The BLS data showed that there were 2.7 million jobs lost since December and 2.9 million jobs lost since November. The entire gain that was reported came from the adjustment used by the BLS.

Aas Zero Hedge explained this afternoon, "What is very notable is that in January, absent BLS smoothing calculation, which are nowhere in the labor force, but solely in the mind of a few BLS employees, the real economy lost 2,689,000 jobs, while net of the adjustment, it actually gained 243,000 jobs: a delta of 2,932,000 jobs based solely on statistical assumptions in an excel spreadsheet!"

You don't believe seasonality exists?

Sure I do. But I haven't seen any justification for the adjustment figure used by the BLS. Let us go back to zero hedge again. As was pointed out in the commentary cited above, the BLS 'adjustment' from 2009 to 2011 averaged to 2,035,000 jobs but for some reason was increased to 2,146,000 jobs without any explanation. That extra 111,000 was the difference between surpassing expectations and a miss.

This thing smells a lot like politics to me. It probably smelled to the market as well because the USD went down yesterday, not up.

 
At 2/05/2012 12:22 AM, Blogger sethstorm said...


Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low

Business had every hand in that figure, as they have every opportunity to hire or not layoff. They made the choice, but want to blame everyone else for not being the perfect person or providing the perfect political climate. In other cases, businesses (and certain like-minded groups) have subverted governments against the will of constituents, so that they get a politically friendly to business (but not to workers) environment.

 
At 2/05/2012 12:24 AM, Blogger sethstorm said...


I believe that it was Ayn Rand who said that you can ignore the reality but cannot escape the consequences of ignoring reality.

Yet reality is that any scenario she has written about, has no capability of happening. The US Government has enough ability to thwart any modern-day equivalent.

Shame she didnt listen to her own words.

 
At 2/05/2012 12:25 AM, Blogger sethstorm said...


Mike, when there are fewer people looking for work and more people getting jobs, then the chance of getting a job increases.

Not if various Third World countries are being used as a counterweight to get more political favor in the First.

 
At 2/05/2012 10:54 AM, Blogger VangelV said...

Yet reality is that any scenario she has written about, has no capability of happening. The US Government has enough ability to thwart any modern-day equivalent.

Shame she didnt listen to her own words.


Actually, the reason why Atlas Shrugged sells so many copies is because she got much of it right. We have no free market but corporatism and a welfare state. Just as she predicted.

 
At 2/05/2012 11:55 AM, Blogger Larry G said...

" ... but corporatism and a welfare state. Just as she predicted"

around the world?

nope.

we have the industrialized countries, the developing countries and the 3rd world countries.

which ones best reflect Ayn Rand's philosophies?

which ones would you rather live in?

choices made, right?

 
At 2/06/2012 10:31 AM, Blogger VangelV said...

around the world?

nope.


The book was mostly about the US. On that front she was dead on. The US government does not care about free markets but has been taken over by special interests. The difference was that Rand thought that the primary players would be manufacturers but in our case we have the financial industry calling the shots.

Still, she was pretty much on the money here.

She also had issues with kleptocratic governments in Mexico and South America. That has proven to be the correct call.

She was also right about Europe and European socialism.

So I am sorry but I do not see your argument having much merit.

we have the industrialized countries, the developing countries and the 3rd world countries.

Yes we do. Most of them are kleptocracies that trample on property rights and demand tribute from the productive classes.

which ones best reflect Ayn Rand's philosophies?

As she predicted, very few. The closest would be a place like Hong Kong. Which is why the resource poor rock that is Hong Kong turned out to have such a high standard of living.

which ones would you rather live in?

choices made, right?


That would depend on my age and skills. If I were a young man right now I would be working in Africa, Turkey, Mongolia, or South America looking for mineral deposits or trying to set up an agricultural company. I would keep what I earned and if I got lucky it would be easy to get very rich very quickly.

If I had already earned my money and had young kids I would look to a country in which investment income and capital gains taxes were manageable and where social liberty were not restricted.

In my case the choice is Canada or Hong Kong but Cyprus, Panama, Malta, and New Zealand would also be possible destinations. If I could speak the language I would also consider to a place like Turkey and the Czech Republic.

 
At 2/06/2012 10:56 AM, Blogger morganovich said...

marmico-

i have no idea where you drudged that nonsense from, but try look at the actual data.

us gdp deflator for q4:

0.8%

us cpi for q4:

oct: 3.5
nov 3.4
dec 3.0

you can get this straight from the bls and the bea.

http://www.bls.gov/cpi/tables.htm

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

the fact that you are too lazy or stupid to do so makes it impossible to take you seriously.

that has nothing to do with whether or not cpi is understated.

this is a whopping inconsistency in the government's own data.

check it yourself.

 
At 2/06/2012 11:35 AM, Blogger morganovich said...

marmico-

also note:

this is a very recent issue.

it's the last 2 quarters that show this very significant divergence.

in q2, cpi was maybe 3.4% and the gdp-d was 3.3. that's a pretty tight fit.

in q3, the gap opened up, with a deflator of 2.0 used vs cpi of more like 3.8. that was a big and noteworthy divergence.

one would expect, if the 2 series converge, for gdp-d to then exceed cpi, but instead, the gap opened still wider in q4.

essentially, all the reported real growth in q3 and q4 came from this divergence.

100% in q3 and 90% in q4.

this doesn't make you even the least but suspicious?

perhaps if you actually took the time to understand what others were saying as opposed to running off to battle with irrelevant straw men of your own invention, you'd be able to keep up with the conversation.

the data here for the last 2 q's is very, very clear and comes entirely from federal agencies.

if the BLS is right about price levels, then there has been pretty much zero real growth for 2 quarters.

this fits well with what we are seeing at firms like dow chemical (volumes down but revs up due to prices) and restaurants, which are having the same experience with over 100% of same store sales growth being driven by inflation. (if you use "food away from home" in cpi to deflate the nominal figure).

ignore it if you want, but there is a reason employment and real income are not recovering.

these headline numbers stink like week old fish.

 

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