Friday, December 04, 2009

Jobless Rate Drops, Overtime and Temp Jobs Rise

WSJ -- U.S. job losses slowed sharply in November and the unemployment rate unexpectedly declined, in a sign the labor market is finally starting to heal as the economy recovers. Nonfarm payrolls fell by just 11,000 last month, slowing down from a downwardly revised 111,000 drop seen in October, as the recovery encouraged companies to retain workers, the Labor Department said Friday.

It was the best showing since December 2007, when payrolls rose by 120,000, said a Labor department official. Economists surveyed by Dow Jones Newswires had expected a payroll decrease of 125,000. The unemployment rate, calculated using a survey of households as opposed to companies, edged lower to 10% in November from 10.2%. Economists had forecast the jobless rate would remain at October's level of 10.2%, when it rose to the highest level since April 1983. Employment fell in construction, manufacturing and information, while temporary help services and health care added jobs.

MP: Two additional positive signs from today's employment report are: a) the increase in manufacturing overtime to 3.3 hours, the highest level since October 2008, and b) the increase in temporary help workers to the highest level since February 2009 (see graph above). Both of those signal a labor market that is slowly recovering, and strongly suggest that the worst is behind us.


At 12/04/2009 11:05 AM, Blogger jcarroll1948 said...

Professor Perry,

This comment/request is a little off topic for this particular post, but I would greatly appreciate your thoughts/response to the linked article below by Elizabeth Warren, in which she notes a disappearing American middle class and notes significant items of expense that require a greater percentage of income now than in preceding decades (housing, health insurance, child care, taxes). Her article strongly contrasts with numerous posts of yours about how much less expensive certain items (refrigerators, etc.) are now than in the past.

Thank you for considering this request,


At 12/04/2009 11:44 AM, Anonymous Benny "Tell It LIke It Is Man" Cole said...

Die, recession, die, die, die!

Saw article today in LA Times to effect that the much maligned TARP funds have roughly worked, and were effective. Taxpayers will even get most of their money back.

The Bush train wreck is fading into history. Can Obama sustain the recovery? Time will tell.

Since Carter, the national debt as a percentage of GDP has risen, except for Clinton. I wonder if we will ever see such economic leadership again?

But Asia is booming. They are the future. Look West young man, and old man investor.

At 12/04/2009 11:54 AM, Anonymous Matteo Radaelli said...

While better than expected, today's labor market data contain just one very positive sign: the increase in average workweek from 33 to 33,2 as employers are expected to increase hours for their current workers before hiring new ones.
However it also has some negative indications:
1) the fall in unemployment rate was due to a 291k fall in the size of the labor force;
2) the participation rate fell to 65%, the lowest since recession began
3) average hourly earnings were almost flat at USD18,74.

With the level of capacity utilization at a very low level (70,7% in October) a more sustained impovement in labor market is not expected in the short term.

At 12/04/2009 12:03 PM, Blogger James Fraasch said...

Matteo, great catch on that.

The number of individuals who just gave up looking for work is what made the "decline" in the unemployment rate happen.

To me, that is not a positive sign at all.

At 12/04/2009 1:27 PM, Blogger KO said...

The number of people unemployed 27 weeks or more went to 5.9 million from 5.6 million in October. So in addition to the discouraged workers, the long term unemployed went up.

Those unemployed shorter periods went down, which is consistent with the better employees being let go last. Plus the volume of newly unemployed has gone down. 27 weeks before November, was April when the weekly unemployment claims started dropping.

When all is said and done, this is going to be a typical recession, not the end of the world as it was sold.

At 12/04/2009 3:11 PM, Blogger PeakTrader said...

Congress wants to create more jobs (adding to the government jobs it already created):

Small Traders Fear a Transaction Tax Would Wipe Them Out
By Alain Sherter | Dec 4, 2009

Rep. Peter DeFazio, D-Ore., on Thursday introduced legislation that would apply a “small” tax on trading in stocks, bonds and other securities. Iowa Democrat Tom Harkin plans to introduce a similar measure in the Senate next week.

DeFazio claims the transaction tax would raise roughly $150 billion in federal revenues. He would put half that money in a fund aimed at creating good-paying jobs.

At 12/04/2009 3:50 PM, Blogger PeakTrader said...

Jcarroll1948, government has spent the future. All that's left is to collect the bill.

At 12/04/2009 4:56 PM, Blogger Methinks said...

Small Traders Fear a Transaction Tax Would Wipe Them Out

Market makers don't make 25 basis points per trade. Most markets are a penny wide. The margins are razor thin and a 25 bps tax will immediately make market making losing business. They'll quit.

If this tax comes to pass, liquidity and tight spreads will be a thing of the past in the United States. No way in hell will they collect $150BB from transactions because the number of transactions will drop like a rock. Meanwhile, good market makers will simply go to Hang Seng or some other exchange not ruled by idiots.

At 12/05/2009 2:16 AM, Anonymous Lyle said...

Recall that until the 1970s commissions for institutions tended to run $.40/share since they were set by the Wall Street Cartel. We also had stocks priced in pieces of eight. Back then the market worked, but in general with much lower volumes and the like. Wall Street was not the money machine it has become. It was a more genteel place where every company knew its niche. The tax if enacted (which unless the g-20 decides to do it world wide) will never be enacted would be a back to the future kind of tax.


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