A Strong Jobs Report, Charted

From Oct. 3  NYT “TheUpshot” Blog by Neil Irwin:

Remember a month ago, when a crummy August jobs report raised some questions about just how robust the labor market recovery truly was? Never mind.

The September numbers are in, the last to be reported before midterm elections, and they show a job market that is recovering steadily but surely, with the unemployment rate falling below 6 percent for the first time since July 2008. And a solid 248,000 net new jobs were created.

But what are the finer details of the report telling us about the state of the American labor market? While the overall thrust of the report is unquestionably positive, there are some signs of continued weakness buried in the Labor Department numbers that give some reason for pause.

But first, the good news. The 248,000 gain in September payroll employment is part of a bigger trend over the last year, in which payroll gains have taken a decisive shift upward. You can see the shift in the chart of year-over-year job gains.

Over the course of 2014, the trend has risen from around 2.1 million net new jobs a year to 2.6 million as of September, the strongest since April 2006. That may be the single most important number to know to understand what people are talking about when they discuss the acceleration of American job creation.

So what about that unemployment rate? Crossing below the 6 percent threshold to 5.9 percent is surely a talking point we will hear from Democratic candidates in the remaining weeks of this election cycle, and there is no question it is good news.

And many of the internal details that are part of that decline in the unemployment rate are good, too. In September, 232,000 more people reported being employed and 329,000 fewer people reported being unemployed.

But here’s the less rosy sign of the report. The improving job market does not seem to be pulling people who left the labor force over the last few years back into it. In fact the size of the labor force actually ticked down by 97,000 in September, which in and of itself is too small a number in too volatile a series to make much of, but is part of a longer trend of the size of the labor force holding steady rather than increasing.

Read the entire article and see the graphics here.

The Changing Face of Temporary Employment

From NYT  “TheUpshot” Blog August 31 by Steven Greenhouse:

Temps aren’t just employees who sort mail and answer the boss’s phone.

The work of temping has changed vastly — today 42 percent of temporary workers labor in light industry or warehouses. And there are more of them. The number of workers employed through temp agencies has climbed to a new high — 2.87 million, according to the Bureau of Labor Statistics, and they represent a record share of the nation’s work force, 2 percent.

Labor groups fret that the trend signals the decline of full-time and permanent jobs with good benefits. But what is happening with temp employment is no sharp break with the past.

Temp employment has traditionally followed the business cycle, though in an exaggerated way. Temps are disproportionately thrown out of work when there is a slowdown, but when the economy starts to pick up — with businesses still wary of committing to making permanent hires — they disproportionately hire temps.

More than five years into a recovery marked by halting growth, many businesses are still adding temp jobs rather than permanent ones. “This is a reflection of business uncertainty, that businesses need to be more responsive, and part of that is keeping their work force flexible,” said Steven Berchem, the chief operating officer of the American Staffing Association.

Read the entire article here.

North Carolina’s Misunderstood Cut in Jobless Benefits

From today’s NYT blog “The Upshot” by Justin Wolfers:

Since North Carolina effectively eliminated unemployment benefits last year for people unemployed 20 weeks or more, the state has become a symbol in the partisan wars over economic policy. People on either side of those wars have argued that it proves the economic advantages — or damage — of providing the long-term jobless with cash payments.

But digging into the data suggests North Carolina should really be a case study in people seeing what they want to see. Over the last year, the state’s economy has performed remarkably like the economy in nearby states.

North Carolina is more than a case study, too. It is a laboratory for the rest of the country, given that at the start of this year, the federal government eliminated all benefits for the long-term unemployed. Both political sides have looked to North Carolina for evidence to bolster the positions they have taken in this debate.

Republicans, who voted against extending unemployment benefits, argue that ending benefits will spur the long-term jobless to look harder for work; with more eager workers, employment will rise, conservatives say. Democrats, many of whom voted to continue jobless benefits for the long-term unemployed, say that ending benefits will force the unemployed to cut their spending, which may have broader ripple effects that could slow the labor market recovery.

My reading of the North Carolina experiment is that it provides little support for either side.

The question of whether to provide those benefits is an important one. But perhaps the answers should depend more on social values than on macroeconomic implications. After all, the point of unemployment insurance isn’t to boost the economy as a whole, but rather to ensure that an unlucky few don’t shoulder an unbearable burden. Whether we’re doing that is a question more of values than of economic statistics.

Read the entire article here.

Review: Lost Jobs, Missing Workers, and Stagnant Wages

From NYT’s “Business Day” by ALICIA PARLAPIANO, SHAILA DEWAN and NELSON D. SCHWARTZ:

In the five years since the United States began its slow climb out of the deepest recession since the 1930s, the job market has undergone a substantial makeover. The middle class has lost ground as the greatest gains have occurred at the top and bottom of the pay scale, leaving even many working Americans living in poverty. The housing industry, once the primary engine of growth and a fountain of jobs, has shrunk, while health care, technology and energy have led the recovery.

After a long climb from the valley, the number of jobs has finally reached the previous peak of January 2008, with gains of more than 8.5 million jobs since early 2010. Still, the working-age population has grown substantially in the last six years, and the nation’s economy, by reliable estimates, is at least seven million jobs below its potential. That has cost Americans hundreds of billions of dollars in lost output.

With the weak recovery from the recession, more than four million people are still considered among the long-term unemployed, out of work for at least half a year. They face considerably dimmer prospects of finding another job as their skills deteriorate and their contact with the world of work fades.

And that does not count the more than six million who have opted out of the labor force altogether, even taking into account demographic factors like the aging of the population.

Economists hope that many such people will be lured back to work as business improves and that wages will rise as the labor market tightens. But for now, the slack in the economy has served to hold down pay; wages for roughly four-fifths of American workers have declined since 2007, after adjusting for inflation.

Read the entire article and review the interactive graphs here.

DOL reports jobless claims down, as workers give up looking for work

The Department of Labor announced that jobless claims were down from 9 to 8.04 percent in November, the single largest decline since March 2009. The fraction translates into roughly 120,000 new jobs created by private employers. However, the report grimly noted that the decline in jobless claims was also partly due to workers giving up looking for jobs in the grim labor market, particularly women.

The report also revised higher the average number of jobs created each month to 143,00 over the three-month period going back to September, an average that is higher than the historic low from May to August, in which anemic job growth signaled the unwillingness of investors and firms to take on new workers at the height of the European debt crisis and the earthquake in Japan that disrupted shipping and supply chains globally.

This November job “rally” can be traced in large part to retailers who added temp workers during the holiday season, so it is unclear whether there is cause for celebration as the transient nature of these 50,000 jobs may become all too apparent in January when retailers let go of their seasonal workers. (Can we expect a rise in jobless claims after the holidays?) In addition, this year’s record-breaking figures by retailers for Black Friday also improved prospects that consumers are more willing to spend in the hopes of a brighter economic future.

However, while economists are claiming that the labor report shows the economy is “improving at a faster clip,” the real news on the ground is that anemic job growth is hampering the economic recovery as workers without jobs spend less on goods and services and firms continue to find ways of cutting workers in order to bolster their bottom lines. The seasonal affective disorder known as “holiday shopping” is only a temporary respite from the really bad news, which is that the real wages of Americans are down and their credit card debt is on the rise again.

These are “not” the signs of a healthily recovering economy, but given the dismal performance and prospects of economic growth in the near future, economists, politicians and investors alike are holding onto this bare bit of news that jobless claims are down, literally, by .06 percent. This is an embarrassing piece of evidence that sound economic policy, which must include job creation (thank you very much, Republicans, for voting against jobs for Americans), has been substituted for the rather conventional approach of grasping at straws in a rising flood.