Tuesday, May 01, 2012

Net Private Sector Job Gains Back to 2006 Levels

The BLS released its report today on Business Employment Dynamics with data through the third quarter of 2011 with the following highlights:

1. From June to September 2011 gross job gains from opening and expanding private sector establishments were 7.1 million, an increase of 166,000 jobs from the previous quarter. That was the largest quarterly increase in more than three years, since the second quarter of 2008.

2. Over this period, gross job losses from closing and contracting private sector establishments were 6.3 million, a decrease of 9,000 jobs from the previous quarter, and the lowest quarterly employment loss since the BLS started tracking these data in 2000.

3. The difference between the number of gross job gains and gross job losses yielded a net employment change of 753,000 jobs in the private sector during the third quarter of 2011. This is the largest net job gain since the first quarter of 2006 (see chart above).

4. By industry, every sector of the economy experienced net job gains in the third quarter with the exception of Utilities, which lost 1,000 jobs.  The construction sector had a net increase of 65,000 jobs in the third quarter of 2011, following a gain of 36,000 jobs in the  previous quarter, reversing jobs losses in previous quarters.

MP: With net private sector job gains in 2011 returning to pre-recession levels, it's another sign that the labor market is gradually improving and we expect those improvements to continue in the coming year.

27 Comments:

At 5/01/2012 10:24 AM, Blogger morganovich said...

2006-7 was the peak of a cycle.

we should be getting much better jobs growth than we had then.

we have made up only 40% of the decline in payrolls over a 3 year period. this pace of jobs growth is not even keeping up with population.

labor force participation dropped under 64% in january and has not seen the upside of it since. these are 30 year lows. i'm not sure you can all that "gradual improvement". it seems more like stagnation at a low level with payrolls not even able to keep pace with population growth.

 
At 5/01/2012 10:37 AM, Blogger NormanB said...

Would like to see a graph of the total private sector jobs not just the change if possible.

 
At 5/01/2012 10:40 AM, Blogger rjs said...

the number of working age people 'not in the labor force' is now at an all time high of 87,897,000; none of these people are counted in the BLS percentages

 
At 5/01/2012 10:48 AM, Blogger Jon Murphy said...

NormanB:

Total Private Nonfarm Payroll Employment

 
At 5/01/2012 10:57 AM, Blogger Larry G said...

to add some context, the G20 unemployment rates:

http://stats.oecd.org/index.aspx?queryid=34531

average OCED = 8.2
average Europe = 9.8

European Union = 10.2

Japan = 4.5
Spain = 23.6
Greece = 21.0
Mexico = 5.2

 
At 5/01/2012 11:00 AM, Blogger morganovich said...

larry-

it's difficult to compare unemployment rates across the g20 as there are significant methodological differences between countries.

the us unemployment rate has dropped a great deal more than job creation would seem to indicate as the labor force keeps shrinking as discourage workers drop out.

some eu countries and japan play similar games etc, but some play ti more straight. it's a very muddy comparison across countries.

 
At 5/01/2012 11:06 AM, Blogger Larry G said...

Morg - you are, of course, correct...but "roughly" speaking ...just for some context...was my motivation.

I did look around to see if they had a criteria and did not see any after a quick look.

Low tax, Ireland is getting killed with 14.7 (again acknowledging the variances in measuring).

is there a recognized apples to apples comparison generated by someone?

 
At 5/01/2012 11:29 AM, Blogger Moe said...

Speaking of Ireland, spoke to mother-in-law in Dublin last night. She lamented about all the young people are leaving for Canada and U.S.

 
At 5/01/2012 11:40 AM, Blogger morganovich said...

larr-

i don't even thing you can go roughly in some cases.

if the us used spanish methodology it might well double out unemployment rate.

 
At 5/01/2012 12:03 PM, Blogger Benjamin said...

The USA, Euro and Japan economies are being asphyxiated by misgotten and destructive tight money policies, pioneered by Japan.

If Romney wins, most likely we will get John Taylor at the Fed, and he will print a lot more money (with a GOP'er in the Oval Office).

BTW, in 1984, Treasury Secy Regan, working fro Reagan, said the Fed's should not be independent, but should come under the administrative control of the executive branch. They suggested stripping Volcker of his power ver monetary policy and give it to the Oval Office. They called Volcker "penurious."
The WSJ chimed in and called for monetary growth. Inflation was just under 5 percent.

When Romney gets in, look for a more expansive monetary policy and maybe a replay of "deficits don't matter." The USA will boom, although I worry about the debt.

 
At 5/01/2012 12:31 PM, Blogger morganovich said...

benji-

m2 growth is the US is 15%.

that's a blistering, preposterous rate. interest rates are zero.

your endless prattling about this being "tight money" is flat out absurd. this money is as loose as it gets.

that's what's killing us and driving (along with massive federal interference and overspending) the weakest recovery since the 30's.

if this is tight money, i cannot even imagine what you would call loose. zimbabwe?

 
At 5/01/2012 12:48 PM, Blogger Methinks said...

No, no, Morganovich. Bunny considers Zimbabwe "just right".

 
At 5/01/2012 1:57 PM, Blogger PeakTrader said...

After a slow start easing the money supply from Aug '07 through early '08 (the Bush tax cut in early '08 gave the Fed time to catch-up), the Fed has completed the easing cycle.

There's now plenty of liquidity. However, lending remains tight, which is reflected in excess reserves:

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

The Fed started paying interest on reserves in 2008 (creating another policy tool). So, if lending increases too quickly, the Fed can raise interest rates on excess reserves to slow lending (in effect, tighten the money supply).

I suspect, high levels of reserves are being kept, because banks believe the government no longer has enough money or is willing to bail-them out (e.g. another TARP) and they have little confidence in the future economy.

 
At 5/01/2012 2:27 PM, Blogger PeakTrader said...

Banks Ease Rules On Some Lending
May 1, 2012

The survey found that banks eased their standards for credit-card, auto and other consumer loans, as well as loans for commercial real estate, the Fed said. However, standards for home mortgages and business loans were largely unchanged despite a pickup in demand.

About a third of the banks surveyed said they were participating in the Obama administration's Home Affordable Refinance Program, or HARP, and "were satisfying most demand." About half, however, said they had "very little participation" in the program, the Fed said.

Banks also cited a fear that they would be forced by mortgage giants Fannie Mae and Freddie Mac to repurchase troubled loans as a reason for decisions to keep credit tight.

 
At 5/01/2012 2:33 PM, Blogger Larry G said...

" Banks also cited a fear that they would be forced by mortgage giants Fannie Mae and Freddie Mac to repurchase troubled loans as a reason for decisions to keep credit tight"

what a novel concept!

would that be before or after they are sliced and diced into credit default swaps/MBSs?

 
At 5/01/2012 2:46 PM, Blogger PeakTrader said...

Larry, before the recession, we had restrictive monetary policy (the Fed Funds Rate was too high for too long at 5 1/4%) and fiscal policy was contractionary (the budget deficit shrunk to $161 billion in 2007).

So, Wall Street "recycled" dollars to keep the U.S. economy expanding and diversified the risk globally.

 
At 5/01/2012 2:50 PM, Blogger Larry G said...

seems like we spent a bunch of money on wars also, no?

 
At 5/01/2012 2:56 PM, Blogger PeakTrader said...

Larry, actually, they were relatively cheap wars and relatively decisive too.

It was unnecessary to raise taxes for those wars, in part, because foreigners (i.e. our trading partners) were indirectly financing them through trade deficits.

 
At 5/01/2012 3:02 PM, Blogger Larry G said...

peak.. we doubled the DOD budget from 2000 levels.

I'm showing this chart in another thread.

http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png

it shows how we got to a 1.5T deficit.

 
At 5/01/2012 3:07 PM, Blogger PeakTrader said...

Larry, that's a one-sided chart that excludes the benefits, e.g. the subsequent steep rise in U.S. living standards, up to $800 billion a year trade deficits, a substantial increase in net wealth or real assets, etc.

 
At 5/01/2012 3:10 PM, Blogger Larry G said...

I agree Peak but the reality is it also shows a 1.5T deficit that is expanding a 15T debt and virtually everyone says it is unsustainable.

so you think the chart itself is credible?

 
At 5/01/2012 3:20 PM, Blogger PeakTrader said...

Larry, the problem is too many idle resources for too long, in recent years, which is unnecessary.

The chart ignores the benefits in the 2000s.

 
At 5/01/2012 3:23 PM, Blogger Larry G said...

I agree that money is on the sidelines....

 
At 5/02/2012 2:42 AM, Blogger PeakTrader said...

This comment has been removed by the author.

 
At 5/02/2012 3:15 AM, Blogger PeakTrader said...

"...it's another sign that the labor market is gradually improving..."

It may be more accurate to say the labor market is deteriorating at a slower rate.

It's uncertain if potential output has been revised lower, e.g. compared to five or 10 years ago, which would make the gap smaller.

http://stateofworkingamerica.org/charts/output-gap-real-gdp-compared-to-potential-gdp-2000-11/

However, some average annual real GDP growth rates are:

1946-2010 3.16%
1982-2007 3.30%
2001-2010 1.60%

Also, I may add, the larger an economy becomes, the slower the growth rate (similarly, smaller firms can grow faster than larger firms).

Perhaps, 3% annual real growth is realistic. Last quarter, real growth at an annual rate was 2.2%.

 
At 5/02/2012 11:54 AM, Blogger VangelV said...

we should be getting much better jobs growth than we had then.

we have made up only 40% of the decline in payrolls over a 3 year period. this pace of jobs growth is not even keeping up with population.

labor force participation dropped under 64% in january and has not seen the upside of it since. these are 30 year lows. i'm not sure you can all that "gradual improvement". it seems more like stagnation at a low level with payrolls not even able to keep pace with population growth.


I am having a hard time figuring out why Mark keeps insisting that things are going well when a rational examination of the data shows us that the problem is still with us.

 
At 5/02/2012 12:27 PM, Blogger Tom said...

We are now Europe, totally dominated by big government. As long as government remains so big, powerful and hostile to our economic system, we can expect only slow growth, high unemployment - especially the young, great cost and risk to start new businesses, regulators at war with business, increasing taxes, extremely high government borrowing, and more people joining the welfare rolls.

 

Post a Comment

Links to this post:

Create a Link

<< Home