03 Sep, 2010
Employment Data - Perspective
But there were many other parts of the nonfarm report that left much to be desired. Here’s an unlucky seven examples of softness beneath the surface:
1. Aggregate hours worked were flat.
2. All the employment gains were part-time — full-time employment, as per the Household Survey, plunged 254,000.
3. Those working part-time for “economic reasons” surged 331,000 — the biggest increase in six months.
4. While private payrolls were better than expected, 10,000 of that +67,000 tally reflected returning construction workers who had been on strike.
5. Manufacturing employment was down 27,000 and total goods producing jobs were flat — hardly signs of a robust economic backdrop.
6. The diffusion index for private payrolls actually fell to 53.0 from 56.7 in July — a seven-month low. It was 68.0 at the April high, which is consistent with an economy slowing down to stall-speed.
7. The labour market gap widened with the all-inclusive U6 unemployment rate rising to a four-month high of 16.7% from 16.5% in July. This is why the odds are stacked against a sustained acceleration in wages.
Yes, Rosenberg spells labor wrong -- he used to work for Merrill Lynch in NYC, but now works for a Canadian firm. His daily comments can be in your e-mail in-box -- go to www.gluskinsheff.com and look (on the home page) for the opportunity to subscribe -- free. 1. Aggregate hours worked were flat.
2. All the employment gains were part-time — full-time employment, as per the Household Survey, plunged 254,000.
3. Those working part-time for “economic reasons” surged 331,000 — the biggest increase in six months.
4. While private payrolls were better than expected, 10,000 of that +67,000 tally reflected returning construction workers who had been on strike.
5. Manufacturing employment was down 27,000 and total goods producing jobs were flat — hardly signs of a robust economic backdrop.
6. The diffusion index for private payrolls actually fell to 53.0 from 56.7 in July — a seven-month low. It was 68.0 at the April high, which is consistent with an economy slowing down to stall-speed.
7. The labour market gap widened with the all-inclusive U6 unemployment rate rising to a four-month high of 16.7% from 16.5% in July. This is why the odds are stacked against a sustained acceleration in wages.
03 Sep, 2010
Electrical Employment
In July, the nation's Electrical Distributors added 1,000 employees (of all kinds), to average 137,600 people employed in the month. It's the first time in 2010 that the employment number in the ED biz topped 137,000.
For Electrical Contractors, I looked at employment of "production workers" (people in the field). That went up to 598,600 in July from 586,000 in June. That's an increase of 12,600.
The BLS now says that the U.S. added 107,000 jobs in private industry in July 2010. Of those, apparently, 13,600 were in the electrical distribution + construction business! I know that seems astonishing (i.e., the electrical biz accounted for one in every eight jobs added in July) -- but that's what the numbers say!
03 Sep, 2010
Part-Time Workers
There are 2 classes of Part-timers -- those who ONLY want P/T work, and those who want full-time work, but are working part-time because that's the best they can do.
Total in August 2009, both classes = 25,726,000 workers. That was out of 139,433,000 employed (18.47%)
Total in August 2010, both classes = 25,516,000 workers, out of 139,250,000 employed (18.32%).
This is actually mixing apples and oranges, as the P/T numbers above are NOT seasonally adjusted, but the employed numbers ARE adjusted.
To net it out, there are 210,000 fewer people employed part-time (as of 8/10) -- and 183,000 fewer people employed, total -- compared with last August.
- - - - - - -
That got me thinking: What did these numbers look like when times were better? I downloaded the August 2007 employment report. In that month, there were 22,157,000 people employed part-time -- out of 145,794,000 people employed. That was 15.2% of the employment total.
Looking at the employed total: As of 8/10, we have 6.5 million fewer people with jobs of any kind.
03 Sep, 2010
U-6 vs. Headline Unemployment
However, I always look for the REAL unemployment rate -- the U-6, defined as
Total unemployed, plus all persons marginally attached to the labor force, plus total employed part-time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.
Here's the seasonally adjusted number for August: 16.7%. It was 16.5% in each of June and July, and 16.6% in May.
In other words: August was a terrible month for employment in the United States.
03 Sep, 2010
National Employment - FEWER Private Jobs?
Headline news, according to Calculated Risk, was a 67,000 net gain in private jobs.
I looked at the BLS site. Where the BLS economists had added only 6,000 jobs to the July report via the Birth/Deal model, in August they added 115,000 jobs via this estimating (or imaginary) method. ALL of these are in private industry.
I'm not sure how to do the calculations, but if the 115K estimated Birth/Death model jobs were added to the mix to get a +67K for the month, it would seem to me that REAL jobs declined in the private sector in the month . . . and there MIGHT BE 115K newly employed people.
Take it on faith? Not on your life.
02 Sep, 2010
July '10 Construction Spending
Construction spending fell 1.0% to $805.2 billion in July 2010, down from a revised June value of $813.1B.
June was revised down $22.9B
May was revised down $15.1B
June was revised down $22.9B
May was revised down $15.1B
This is all bad news.
+ + + + +
Here's what it equates to (missing from the above verbiage)
UNADJUSTED NUMBERS
Year-to-date (7 months) construction as of July 2010 = $460.3B
One year earlier (as of July 2009) =- $521.99B
Decline = 11.8%
------------------
The government's figures have Private Residential construction UP 2.8%, Public construction down 6.4%, and Private nonresidential down 26.0%.
02 Sep, 2010
Stimulus + Construction
There are
different ways of classifying the funds for construction in last year’s stimulus
legislation (AGC estimated $135 billion) but there is growing agreement that the
money for construction is being spent more slowly than many had expected.
“At the end of July, nearly 18 months after the stimulus passed, more than half of the $275 billion in investments [in infrastructure, health care and other areas] had yet to be spent,” the Washington Post reported on Saturday. “Administration officials say the stimulus remains on schedule, with 70% expected to be spent by September 30….Many of the unspent funds lie in programs portrayed from the outset as true long-term investments, such as $8 billion for high-speed rail, $17 billion for health information technology and $10 billion for the National Institutes of Health. But other programs that had been viewed as quicker job-generators are also taking a while to get rolling.”
The $862 billion total included “$230 billion to fund an array of projects ranging from road repaving to modernizing the electricity grid to launching new high-speed rail services,” the Wall Street Journal reported on Monday. “So far, $182 billion of the infrastructure money has been awarded, though the government has paid out only $66 billion. The biggest projects have been the slowest to start….A few recipients of $7.2 billion in grants allocated to the expansion of broadband Internet services have started laying cables, but the rest are still busy with preconstruction work.”
“At the end of July, nearly 18 months after the stimulus passed, more than half of the $275 billion in investments [in infrastructure, health care and other areas] had yet to be spent,” the Washington Post reported on Saturday. “Administration officials say the stimulus remains on schedule, with 70% expected to be spent by September 30….Many of the unspent funds lie in programs portrayed from the outset as true long-term investments, such as $8 billion for high-speed rail, $17 billion for health information technology and $10 billion for the National Institutes of Health. But other programs that had been viewed as quicker job-generators are also taking a while to get rolling.”
The $862 billion total included “$230 billion to fund an array of projects ranging from road repaving to modernizing the electricity grid to launching new high-speed rail services,” the Wall Street Journal reported on Monday. “So far, $182 billion of the infrastructure money has been awarded, though the government has paid out only $66 billion. The biggest projects have been the slowest to start….A few recipients of $7.2 billion in grants allocated to the expansion of broadband Internet services have started laying cables, but the rest are still busy with preconstruction work.”
(More)
