Unemployment Falls to 7.7%

[Direckshun]

I'm surprised, I was hearing it was going to be much lower, that the fourth quarter was generally stagnant, and that 2013 is supposed to be another tough year, economically.

http://www.calculatedriskblog.com/20...=Google+Reader

November Employment Report: 146,000 Jobs, 7.7% Unemployment Rate
by Bill McBride
on 12/07/2012 08:30:00 AM

From the BLS:

Total nonfarm payroll employment rose by 146,000 in November, and the unemployment rate edged down to 7.7 percent, the U.S. Bureau of Labor Statistics reported today. ...

Hurricane Sandy made landfall on the Northeast coast on October 29th, causing severe damage in some states. Nevertheless, our survey response rates in the affected states were within normal ranges. Our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November. ...

The change in total nonfarm payroll employment for September was revised from +148,000 to +132,000, and the change for October was revised from +171,000 to +138,000.

There was uncertainty about this report because of Hurricane Sandy.

The headline number was above expectations of 80,000, but both September and October payroll growth was revised down.

The second graph shows the unemployment rate. The unemployment rate declined to 7.7%.

The unemployment rate is from the household report.

The unemployment rate declined because of lower participation (a decline in the civilian labor force).

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 63.6% in November (blue line. This is the percentage of the working age population in the labor force.

The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although most of the recent decline is due to demographics.

The Employment-Population ratio decreased to 58.7% in November (black line). I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the job losses from the start of the employment recession, in percentage terms, compared to previous post WWII recessions. The dotted line is ex-Census hiring.

This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

With all the uncertainty about the impact of Hurricane Sandy, this was a decent report, especially with the decline in the unemployment rate. However, negatives include the downward revisions to prior months, and the decline in the participation rate.

[FD]

Given the difficulties associated with seasonal hiring (early thanksgiving), hurricane Sandy, and the fiscal cliff, I would take this months jobs report with a big grain of salt.

[FD]

November jobs report: A good number — with tons of caveats
By Brad Plumer , Updated: December 7, 2012

Let’s start with the good news: The U.S. economy added 146,000 jobs in November, far more than expected. And the unemployment rate dipped to 7.7 percent, the lowest level since the financial crisis kicked off in 2008.

Yet the Bureau of Labor Statistics’ November jobs report isn’t all unalloyed positives. Let’s take a look at a few caveats:

1) Hurricane Sandy may still be affecting the job market. The BLS report says that the hurricane didn’t affect its ability to collect data last month, as many forecasters had worried. “Our survey response rates in the affected states were within normal range.”

Yet the storm still affected actual employment levels. About a million workers said they were working part time rather than full time because of “bad weather.” And the economy lost 20,000 construction jobs. In theory, those jobs should come back as post-hurricane rebuilding gets underway. But it makes the underlying trend more difficult to pick out.

2) Bad news: jobs numbers from past months got revised downward. Last month’s jobs report suggested that the economy had added 148,000 jobs in September and 171,000 jobs in October. That’s been revised down to 132,000 and 138,000, respectively.

That means there were 49,000 fewer jobs in the past two months than we thought. Not great.

3) Last month’s increase in the participation rate has been wiped out. More Americans appear to be giving up looking for work and dropping out of the labor force. The participation rate dropped from 63.8 percent to 63.6 percent — essentially erasing last month’s gains. That caused the unemployment rate to plunge (since the official unemployment rate only looks at those who are actively seeking work), but it’s not a good sign for the actual economy.

That said, as economist Justin Wolfers points out, the broader trends are encouraging — unemployment has fallen since January mainly because the economy has added jobs, not because people are giving up looking. So this month may just be a blip.

4) The United States is still on a sluggish path to recovery. For the past three months, the U.S. economy has added an average of 139,000 jobs per month. At this rate, we won’t get back to full employment until…. well, at least a decade. Maybe more. And it will be a long time before we start seeing improvements for the 4.8 million long-term unemployed — those Americans who have been out of work for at least half a year and who typically have the toughest time finding jobs.

5) As always, this jobs report is probably wrong. These monthly payroll numbers always come with a margin of error of +/- 100,000. September and October’s numbers have been revised heavily. Keep that in mind.

http://www.washingtonpost.com/blogs/...veats/?print=1

[durtyrute]

How can the unemployment rate be calculated accurately if not everyone is filing for it?

[petegz28]

it's a hollow 7.7%. The work force pool is the smallest it has been since 1982.

[jiveturkey]

Originally Posted by petegz28

it's a false 7.7%. The work force pool is the smallest it has been since 1982.

Isn't part of that due to retirees? There are a shit ton of boomers leaving the workforce every month. It's something like 10k per day.

[petegz28]

Originally Posted by jiveturkey

Isn't part of that due to retirees? There are a shit ton of boomers leaving the workforce every month. It's something like 10k per day.

Maybe some but not the majority. I guess if you wanted to cross reference the number of new SS claims vs. the number of people dropping out of the workforce you would have a better idea. And I do believe a lot of these are people who were in unemployment and are not on it any longer though they do not have a job.

[petegz28]

73% of New Jobs Created in Last 5 Months Are in Government

http://cnsnews.com/news/article/73-n...are-government

[Taco John]

I wonder what the real number is. I find it funny that anyone would bother reporting the ginned up number.

[BigCatDaddy]

Originally Posted by Taco John

I wonder what the real number is. I find it funny that anyone would bother reporting the ginned up number.

.

[KCWolfman]

And economists noted that the unemployment rate would have risen if more people hadn't stopped looking for work. Once people without jobs stop looking for one, they're no longer counted as unemployed.

[Taco John]

Originally Posted by KCWolfman

And economists noted that the unemployment rate would have risen if more people hadn't stopped looking for work. Once people without jobs stop looking for one, they're no longer counted as unemployed.

I'm pretty sure at that point, they officially become "Democrats."

[BucEyedPea]

Govt stats are frequently manipulated. Unemployment is not figured the same as it once was in the past, such as during the Great Depression. Shadow stats has shown the numbers have been higher throughout this depression.

[vailpass]

Disinformation is fun!!!

[Garcia Bronco]

6 percent is average