Tuesday, December 07, 2010

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. 


At 12/07/2010 9:44 AM, Blogger Harry said...

Seems to me like good news, however there are still things to go against it.

At 12/07/2010 10:27 AM, Blogger juandos said...

Hmmm, I'm wondering if the Conference Board was paying attenion to what was happening in October & November?

At 12/07/2010 10:57 AM, Blogger Cash212 said...

I notice you often report Bullish rail traffic reports. Why not report less bullish reports: http://www.calculatedriskblog.com/2010/12/aar-november-rail-traffic-shows-mixed.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

Great blog but, again, some balance would be nice.

At 12/07/2010 11:39 AM, Blogger Buddy R Pacifico said...

When employment statistics are announced they are for non-farm payrolls. What about farm employment? Farm employment in California has been not suffered much and is now rising.

At 12/07/2010 11:50 AM, Blogger morganovich said...


farm employment is both extremely seasonal and tiny as a % of the US workforce. (2%)

more people work serving fast food in the US than in farming.

At 12/07/2010 12:06 PM, Blogger juandos said...

"Great blog but, again, some balance would be nice"...

You need some 'bad news' balance, eh?

Have you looked at the Drudge Report within the last hour or so?

Then there always is Dian Chu's EconForecast blog: Offshoring Tsunami and QE3: A Perfect Storm for Stagflation

At 12/07/2010 12:07 PM, Blogger Buddy R Pacifico said...

morganovich, yes, farm employment is 2% but it has stabilized. This is going to be a segment of the economy that will grow because the U.S. is a major breadbasket for Asia.

Will farming and associated Ag reduce a major fraction of unemployment? No, but it is worth serious consideration for employment and career opportunities.

At 12/07/2010 12:19 PM, Blogger Benjamin Cole said...

Employment grwoth is wimpy, and real estate is still in a depression.

Bernanke needs to really pour it on.

The Nipponistas would have us suffer through 20 years of deflation, wiping out 75 percent ofequity and property values.

Inflation-schmaflation. We need a boom, baby, a full-on boom.

At 12/07/2010 12:43 PM, Blogger morganovich said...


show me one boom (in real terms) that ever happened as a result of expansionary monetary policy?

it was lose money that got us into this mess by inflating a bubble and leaving behind the debt.

more loose money and debt will just make the hole we have to climb out of deeper.

At 12/07/2010 1:22 PM, Blogger morganovich said...


"This is going to be a segment of the economy that will grow because the U.S. is a major breadbasket for Asia. "

i doubt that very much. employment in agriculture will continue to decline as a % of the US workforce as it has done for the last 100 years. increased productivity will make this so, particularly in the bulk foods that are exported.

agriculture is never going to be a material part of the US employment picture again.

nationwide there are around 800k ag jobs.

mcdonalds alone is something like half that size.

labor is just not the relevant to farming in the age of GPS guided robot combines.

At 12/07/2010 1:27 PM, Blogger morganovich said...


farming can only grow 2 ways: increased prices or increased productivity.

arable acres are not going to increase.

neither higher food prices nor greater productivity drives hiring.

you need the same workers to plant $3 wheat as $4 wheat, and if they get more productive, you may need even fewer of them.

At 12/07/2010 2:34 PM, Blogger Benjamin Cole said...

I can show your a perma-recession deflationar that has happened thanks to too-tight money, and that is Japan.

A growing economy needs money like oxygen.

Cut it off, and you join the Nipponistas. Pettifogging about inflation while property and equity values sink 75 percent, as they have in Japan.

As for me, I prefer properity to recession.

Bring on the boomtimes, baby, I am so ready, Freddy.

And today's rally on Wall Street tells me we have maybe, just maybe, turned the corner....

At 12/07/2010 3:25 PM, Blogger morganovich said...


we already have the loosest money that has ever occurred in american history.

"tight money" is nothing resembling an issue.

it's the opposite that is the problem. we are driving huge asset and commodities bubbles that actually crowd out growth.

the US economy behaves very little like japan. we fund with equity, not debt.

you are advocating smothering the economy by sucking all the oxygen elsewhere.

you cannot drive prosperity through loose money. sure, you can choke it off by driving rates too high, but that is hardly a problem at the moment.

your arguments don't make any sense.

how can the loosest money in US history be too tight? we have negative real interest rates. they are paying people to take money, and still it doesn't work.

when are you going to give up on this banana republic nonsense?

how does printing money drive real growth?

At 12/07/2010 4:40 PM, Blogger Benjamin Cole said...


Read Milton Friedman. Google Hoover Institution, Friedman and Japan. A monograph will come up.

Read it.

The central bankers in Japan have been making your arguments for 20 years. The Nipponistas were wrong then and now, and will always be wrong.

MF would have told us to print money until we get growth and inflation. I agree.

At 12/07/2010 6:16 PM, Blogger Buddy R Pacifico said...

Benji said: "MF would have told us to print money until we get growth and inflation".

Milton Friedman said: " I gave a presidential address to the American Economic Association in 1967, I believe it was, in which I essentially predicted that if you continue to use monetary policy to attempt to promote full employment the result would be that you would have higher inflation, and that you would not have lower unemployment."

It is my understanding that Friedman was for a steady (%) increase in money supply as policy; not stepping on brakes or accelertor as policy.

At 12/07/2010 6:45 PM, Blogger morganovich said...


i have read Friedman exhaustively.

you are misinterpreting his views.

japan is not a comparable situation.

our real interest rates are already negative and our consumer debt is already high.

you cannot inflate out of overcapacity nor can you clean up a debt bubble that way.

negative real interest rates (even using the BLS CPI) are an extreme condition. money is already extremely loose. a lack of money is not holding back the US economy in any way. money is and has been plentiful.

there is already a great deal of inflation. it just does not show up in CPI because that number has been manipulated not to show it. if we use the CPI measure upon which friedman's work is based (pre 1992 BLS) inflation is already 8%.

food is up in price, rents are up, healthcare is up, commodities are up. read volcker or bill gross on this instead of the study paid for by BLS you continually cite which is both biased and methodologically flawed as i have shown you a dozen times before.

the reason the "recovery" from 2000-8 was so weak is that it was just a monetary bubble. take the housing bubble out, and the recovery was incredibly anemic. use real inflation numbers, and it barely happened at all.

you are advocating more of the same bad policy of concatenated bubbles that got us here.

At 12/07/2010 7:18 PM, Blogger Benjamin Cole said...

Morgan-Well, we have had this argument before, and I have to say you are as wrong as Liberace at a Hell's Angels BBQ.

Look, the Celeveland Fed (Dr. Perry's fave) and other non-BLS outfits release all sorts of data showing we are coming closer and closer to outright deflation.

Yes, MF favored steady monetary grwoth, But unusual times call for unusual solutions.

Here is yet another link, and yet another economist who says MF would have supported Bernanke:


Morgan, you are getting to the point where you say the Cleveland Fed is deluded, the BLS is deluded, several name economists are deluded, Bernanke is evil and deluded...only Morgan can devine the real truth.

Time for a vacation, a beer, warm sands and a pretty girl with nice headlights. When you find that, ring me up.

At 12/07/2010 11:10 PM, Blogger morganovich said...

no benji, i am saying that the fed is politicized, not deluded.

they changed CPI to rein in growth in entitlement programs and to make GDP growth appear higher and lessen the US federal debt burden at the expense of savers.

it's not that they are fools, it's that they are pushing a political agenda. is that so difficult for you to believe?

you continue to cite japan as some sort of analogy despite the fact that it has little bearing on our current situation.

their demographics and economic system are dramatically different from ours

then you pretend that somehow money is tight in the US when it is in fact looser than it has ever been in history. loose money has not done us any good yet, yet you keep advocating bigger hammer theory as though it's going to work this time.

you essentially have no argument at all.

the US is not japan. our response has not been japan like.

so i really don't see what you are on about.

it's clear that QE2 is failing and having precisely the opposite effects that were intended. rates on the long end are going up as the rest of the world backs away from or bonds due to the reckless course you advocate.

yields on the 10 year are up 30% since qe2 started and show no signs of letting up.

there comes a point when a loss of confidence in our monetary policy swamps the effects of printing money.

it's clear we are past that point.

if each bond the fed buys stops buying of 1.5 others, the policy is doomed to fail.

watch and see.

this is a catastrophe in the making.

At 12/08/2010 12:08 PM, Blogger juandos said...

"no benji, i am saying that the fed is politicized, not deluded.

they changed CPI to rein in growth in entitlement programs and to make GDP growth appear higher and lessen the US federal debt burden at the expense of savers

Very interesting comment morganovich and personally I totally agree...

You may find this interesting though not necessarily good news considering the politics of the situation: House Republicans Continue Drumbeat Against Fed’s Role

Top members of the incoming Republican majority in the U.S. House of Representatives continued to level broadsides against the Federal Reserve Tuesday, questioning its proper role in shaping U.S. economic policy...

At 12/08/2010 1:54 PM, Blogger morganovich said...


i agree. the fed has no business trying to affect employment levels. their instruments are poorly suited to it.

the fed should keep price levels stable with perhaps a small (1-2%) inflationary bias.

putting them in a position of responsibility for growth and employment with only monetary policy as a tool is dramatically counterproductive and put them in an impossible situation.

they will wind up creating bubbles, not growth.


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