Keeping you up to date on the latest data releases.
June 2013 :: Labor Markets, Unemployment, and Wages
Total nonfarm payroll employment rose by 175,000 and the unemployment rate ticked up to 7.6 percent in May, with the payroll numbers coming in slightly above the forecast of 168,000. On the household side of the report, the labor force participation rate increased slightly by 0.1 percentage points to 63.4 percent, but is still 0.2 percentage points below its January reading. The employment-to-population ratio was unchanged from April at 58.6 percent and has shown little movement over the past year. Overall this was a moderately positive report, with the unemployment rate increasing partially due to an increase in the labor participation rate as workers re-enter the labor force. Total number of employed increased by 319,000, indicating improved traction within the labor market.
As for the establishment side of the report, revisions to both March and April have subtracted a total of 12,000 more jobs than previously estimated as March was revised up 4,000 and April revised down 16,000 to 142,000 and 149,000, respectively. Over the past 12 months, employment growth has averaged a total of 172,000 jobs per month. Professional and business services continue to show solid improvement, adding 57,000 jobs, as well as food services and drinking places up 38,000 jobs, retail trade up 28,000 jobs, and healthcare up 11,000 jobs. Government continues to lead employment declines, falling 14,000 for the month and down 45,000 over the past three months. The total private diffusion index increased 4.2 percentage points to 59.8 and remains above the growth threshold of 50. The average workweek for all employees increased by 0.1 hours to 34.5 hours, while the average hourly earnings for all employees rose by one cent to $23.89.
Total nonfarm payroll employment rose by 165,000 and the unemployment rate fell to 7.5 percent in April, both of which exceeded consensus forecast. On the household side of the report, the labor force participation rate was unchanged at 63.5 percent, but has declined 0.3 percent since January. The employment to population ratio dipped slightly in April to 58.6 percent and has shown little movement over the past year. Overall this was a positive report and the total number of people employed increased by nearly 300,000, showing improved traction within the labor market.
As for the establishment side of the report, strong revisions to both February and March have added a total of 114,000 more jobs than previously estimated. Over the past 12 months employment growth has averaged a total of 169,000 jobs per month. Professional and business services continue to show solid improvement, adding 73,000 jobs, as well as retail trade, leisure and hospitality, up 43,000, and retail trade, up 29,000. Employment growth in manufacturing was flat and minor declines were reported in construction, down 6,000, and mining and logging, down 3,000. Government continues to lead employment declines, falling 11,000 for the month. The total private diffusion index fell 2.3 percentage points to 53.9, but remains above the growth threshold of 50. The average workweek for all employees fell by 0.2 hours to 34.4 hours, while the average hourly earnings for all employees rose by four cents to $23.87.
- Employer costs of compensation for civilian workers rose 0.3 percent (nonannualized) in the first quarter, following a 0.4 percent increase in the fourth quarter. The wages and salary component increased 0.5 percent, slightly above the fourth quarter’s 0.3 percent advance. The benefits component saw growth slow from 0.6 percent to 0.1 percent in the current quarter. Year-over-year, civilian compensation advanced 1.7 percent in the first quarter, slightly below its average (1.9 percent) since the recession ended. Civilian wages and salaries increased 1.7 percent over the past twelve months; wage and salary growth has ranged from 1.5 to 1.7 percent over the last 15 quarters. Growth in civilian benefits has slowed markedly from 3.7 percent in 2011 to increasing 1.9 percent in the first quarter. On a year-over-year basis, private compensation growth is 1.7 percent while private wages and salaries increased 1.7 percent and benefits grew just 1.5 percent. Inflationary impetus from the labor market continues to be minimal as compensation growth has averaged 1.9 percent for the since the recession ended.
In March, the unemployment rate ticked down to 7.6 percent, and nonfarm payrolls increased by 88,000—both of which fell short of consensus forecasts. On the household side of the report, the labor force participation rate fell 0.2 percent to 63.3 percent, which is the lowest level in over three decades. Meanwhile, the employment-to-population ratio, at 58.5 percent, posted a modest decline of 0.1 percent. The total number of persons employed fell by roughly 200,000 or 0.14 percent for the month, but remains up 0.89 percent since last March.
As for the establishment side of the report, positive revisions to January and February figures have added a total of 61,000 jobs to previous estimates. Over the past 12 months employment growth has averaged monthly gains of 159,000. Professional and business services as well as healthcare and education continued to post strong gains in line with annual and monthly trends. Construction posted an increase of 18,000 jobs, which were split evenly between residential and nonresidential. Manufacturing employment fell by 3,000. However, the sharpest declines were seen within the retail trade sector, which lost a total of 24,000 jobs after having averaged a gain of 32,000 jobs over the past six months. Government employment continues to trend downward, with postal services leading with declines of 12,000, while other areas were little changed.
The average workweek for all employees increased 0.1 hour to 34.6 hours, which is the highest since last February. The manufacturing workweek fell 0.1 hour to 40.8 hours, and factory overtime rose by 0.1 hour to 3.4 hours. Average hourly earnings rose 1 cent to $23.82, and over the past year hourly earnings have increased 42 cents or 1.8 percent.
- Total nonfarm payrolls improved by 236,000 in February, coming in well above consensus forecasts. Revisions to prior months, on net, subtracted 15,000 from our previous estimates. Over the past three months, payrolls are averaging a gain of 195,000. Private payrolls advanced by 246,000 in February, compared to a downwardly revised 119,000 gain in January. Performance across broad industries was good. The largest gains were seen in construction (up 48,000) healthcare (up 32,000) and professional and business services (up 73,000). Elsewhere on the establishment side, average weekly hours ticked up slightly to 34.5, which helped to nudge average weekly earnings up to $821.79. On the household side, the unemployment rate edged down to 7.7 percent, although the employment to population ratio was flat at 58.6 percent for the third consecutive month.
Nonfarm payrolls increased by 157,000 in January, but the real story is the annual benchmark revisions. Reflecting more complete data on unemployment insurance tax records, the level of nonfarm payrolls as of December 2012 was revised up by 647,000. Moreover, the pattern of these revisions make the recent job growth trajectory appear more substantial. We’d previously thought that the average monthly job gain over the past three months of 2012 was 151000—in line with its previous 2012 average. Now that average has been bumped up to 201,000, and even after rolling forward through January’s (now) slight dip, the average payroll growth over the past three months has been an even 200,000. Private payrolls, which advanced by 166,000 in January, were revised up by roughly 700,000 in 2012 (government payrolls were revised down during the year). Importantly, the pattern in the revisions suggests a bit more momentum in the fourth quarter, with private payrolls averaging a monthly increase off 225,000 in the fourth quarter, compared to an average gain of 142,000 in the third quarter. The previous pattern was a much more modest acceleration: 181,000 average in the fourth quarter, relative to a 140,000 average gain in the third.
Regarding the composition of the private payroll revisions, goods-producing payrolls were revised up by 119,000, reflecting an upward adjustment of 139,000 to construction employment, an upward revision of 20,000 to mining and logging employment, and a 42,000 knockdown to manufacturing payrolls. Private service-providing payrolls were revised up by 580,000, with upward adjustments spread over nearly all the major categories, except for healthcare and social assistance employment, which was revised down by 36,000 in 2012. The household survey was revised to reflect annual population adjustments, though the adjustments were relatively minor and did not effect the labor force participation rate (which is still at 63.6 percent) or the employment-to-population ratio (flat at 58.6 percent in January). The unemployment rate was also virtually unaffected by the population adjustment, though it was nudged up from 7.8 percent to 7.9 percent in January.
- Employer costs of compensation for civilian workers rose 0.5 percent (nonannualized) in the fourth quarter, following a 0.4 percent increase in the third quarter. The wages and salary component increased 0.3 percent, slightly below the third quarter’s 0.4 percent advance. The benefits component rose 0.6 percent in the fourth quarter. Year-over-year, civilian compensation advanced 1.9 percent in the fourth quarter, right in line with its average since the recession ended of 1.9 percent. Civilian wages and salaries increased 1.7 percent over the past twelve months, while benefits rose 2.5 percent. Private compensation grew 1.9 percent on a year-over-year basis and has also averaged 1.9 percent since the recession ended. Private wages and salaries increased 1.8 percent from this same time last year, while benefits grew 2.3 percent. Inflationary impetus from the labor market continues to be minimal as compensation growth has averaged 1.9 percent for the past three years.
Nonfarm payrolls rose by 155,000 in December, in line with its 2012 average gain of 153,000. Revisions to the previous two months’ estimates added 14,000 in sum, but that includes a shift in the composition away from government payrolls toward the private sector. Government payrolls were revised down by 24,000 over the previous two months, and slipped 13,000 further in December. On the other hand, private nonfarm payrolls were revised up by 38,000 over October and November (interestingly, a little more than half of that upward revision came from the construction sector). Private nonfarm payrolls rose 168,000 in December, slightly above its average monthly gain during 2012 of 159,000. In December, most broad industry groups outpaced their respective near-term trends, with payroll gains in healthcare (up 45,000), leisure and hospitality (up 31,000), and construction (up 30,000) leading the way. The gain in construction employment comes on the heels of some relatively volatile swings (down 10,000 in November and up 25,000 in October), which is usually a sign of measurement issues. Nonetheless, over the past three months, construction payrolls are averaging a 15,000 increase, compared to a measly 2,000 average for 2012 as a whole.
There were a couple of other interesting employment swings in December. First, manufacturing payrolls rose 25,000 in December, its strongest monthly performance since March, and have steadily increased since hitting a low point (shedding 16,000) in September. December’s factory employment increase was broad-based. Durables employment rose a little over 11,000 (roughly 5,000 of that was autos-related), and nondurables rose roughly 14,000. The other interesting swing came from retail trade payrolls, which fell 11,300 in December, after an increase of roughly 110,000 over the previous two months. Much of this weakness stemmed from a 19,000 decrease in employment at clothing and accessories stores in December (after an increase of 30,000 in November). Given the time of year, this pattern is suggestive of some seasonal adjustment issues. Turning to the household side of the report, the unemployment rate remained at 7.8 percent in December (November’s original unemployment rate estimate of 7.7 percent was revised up to 7.8 percent as the Bureau of Labor Statistics updated their 2012 seasonal factors for the household survey). The labor force participation rate was steady at 63.6 percent, and the employment-to-population ratio was virtually unchanged at 58.6 percent (about where it began the year).
- Nonfarm payrolls rose by 171,000 in October, outperforming even the most optimistic guess (168,000) by professional forecasters in the Bloomberg survey, and coming on the heels of relatively sharp upward revisions to the previous two months’ estimates. Nonfarm payrolls were revised up in sum by 84,000 over the past two months (61,000 of that was to private payrolls). These revisions helped push the average monthly gain in payrolls during the third quarter up to 174,000, compared to just 67,000 in the second quarter (which looks even more like transitory weakness given today’s report). Notably, nonfarm payrolls have averaged a gain of 162,000 per month over the past 12 months, compared to its pre-recession long-run (30-year) average of roughly 150,000. That comparison is perhaps even a little more favorable for private payrolls (164,000 per month. over the past 12 months, compared to a pre-recession long-run average gain of 130,000). Payroll gains were concentrated in the private service sector, accounting for 163,000 of the overall gain. Employment gains were strongest in professional and business services (up 51,000), retail trade (up 36,000), and healthcare (up 30,000). Goods-producing payrolls rose 21,000 in October, almost reversing a decline of 27,000 over the past two months. And government payrolls, which were revised up by 23,000 over the past two months, slipped down 13,000 in October. On the household side of the report, the number of employed persons increased by 410,000 in October, absorbing most of the net inflows into the labor force (up 578,000). However, that excess inflow into the labor force nudged the unemployment rate up to 7.9 percent. The labor force participation rate rose 0.2 percentage points to 63.8 percent, though that’s still 0.3 tenths below its level from a year ago. And the employment-to-population ratio edged up a tenth to 58.8 percent, and has risen by 0.5 percentage points over the past two months.
Nonfarm payrolls rose just 114,000 in September and are averaging a monthly gain of 146,000 over the past three months, roughly in line with its 2011 average monthly increase of 153,000. Interestingly, estimates over the past two months were revised up sharply (+86,000). However, the revisions came entirely from government payrolls, which were revised up by 91,000 in sum. Private nonfarm payrolls, which rose 104,000 in September, were actually knocked down by 5,000 in the revised estimates for July and August. Perhaps the most disappointing trend to highlight on this side of the report is that private nonfarm payrolls are averaging 121,000 over the past three months, down from an average monthly gain of 175,000 in 2011. Cross-industry performance was mixed in September. The largest payrolls gains came from health care (up 44,000), transportation and warehousing (up 17,000), and financial activities (up 13,000). The release pointed out that the gains in the financial sector were due to increases in credit intermediation employment (up 6,000) and a 7,000 increase in real estate payrolls. Most of the payroll employment declines in September came from goods-producing industries (and the bulk of that was in durables manufacturing). Manufacturing employment, after decreasing 22,000 in August, slipped down another 16,000 in September. Durables employment (down 13,000) accounted for most of September’s decline in manufacturing payrolls (roughly 3,000 of this loss was in the auto industry).
On the household side, the details were fairly positive. The unemployment rate fell 0.3 percentage points to 7.8 percent. The number of employed persons jumped up 873,000 in September (more than doubling its threshold for statistical significance), its strongest monthly gain since January 2003. As a result, the employment-to-population ratio jumped up 0.4 percentage points to its highest level since September 2009. Elsewhere on the household side, there was a sharp decline in the number of persons unemployed for less than five weeks (down 302,000). Other duration categories were little changed.
- Nonfarm payrolls rose just 96,000 in August, following downward revisions to June and July payrolls that totaled 41,000 (with half of that coming from government payrolls). Over the past three months, nonfarm payrolls are averaging a monthly gain of 94,000, a slight slowing from earlier in the year and moderately off its pace of 153,000 per month in 2011. Broad industry performance was mixed (perhaps with a downward tilt). On the plus side, leisure and hospitality rose 34,000 in August and have been posting accelerating job growth over the past four months. Healthcare payrolls continued their acyclical climb, rising 22,000 in August. Retail trade payrolls, which had declined in each of the previous three months, rose 6,000 during the month. On the other side, goods-producing payrolls remained on the mat, slipping 16,000 in August. Much of that decline, however, came from auto sector—which failed to follow its usual seasonal retooling pattern—and should be regarded as noise. Excluding autos, manufacturing employment still fell roughly 7,000. Also, construction and mining payrolls were essentially unchanged for the second consecutive month. On the household side of the report, the unemployment rate ticked down 0.2 percentage points to 8.1 percent. However, this “improvement” is misleading. The tick down in unemployment was entirely due to a labor force exodus (minus 368,000) which left the labor force participation rate 0.2 percentage points lower at 63.5 percent. Perhaps more importantly, the employment-to-population ratio edged down a tenth to 58.3 percent (its lowest level since last August).
Nonfarm payrolls rose 163,000 in July, more than doubling June’s increase (which was revised down from 80,000 to 64,000), and is roughly in line with its average hiring pace (+151,000 a month) since the beginning of the year. 2012’s average monthly increase is essentially unchanged from its 2011 average monthly gain of 153,000. Private payroll growth was a shade stronger than the headline number, rising 172,000 in July, as government payrolls decreased by 9,000. Private payrolls have averaged a gain of 161,000 per month so far this year, but that’s slightly off its pace in 2011 of 175,000.
Goods-producing payrolls increased by 24,000 in July, compared to 13,000 in June, but that was entirely due to a 25,000 increase in manufacturing employment (mining and logging payrolls were flat and construction payrolls slipped 1,000). Consistent with the anecdotes we’ve heard on auto plants not shutting down to retool in July, the release noted about half of the seasonally-adjusted increase in manufacturing was in the autos sector. Private service-providing payrolls rose 148,000 in July, compared to a mere 60,000 in June, largely on employment gains in professional and business services (up 49,000, of which temporary help employment accounted for 14,000), education and health services (up 38,000), and leisure and hospitality (up 27,000). Within leisure and hospitality, most sectors actually posted slight declines or were flat. The category’s increase was driven entirely by food services and drinking places employment, which jumped up 29,000 in July following three consecutive monthly gains of less than 10,000.
On the household side of the report, the unemployment rate edged up 0.1 percentage point to 8.3 in July. Household employment slipped by 195,000 in July, slightly outpacing a 150,000 decrease in the labor force, which led to the slight uptick in the unemployment rate. That said, the total number of unemployed persons—at 12.8 million—is little changed from the beginning of the year. The labor force participation rate edged 0.1 percentage point lower in July to where it started the year at (63.7 percent). And, the employment-to-population ratio slipped down 0.2 percentage points to 58.4 percent in July, and has been oscillating around that level for the past two years.
- Employer costs of compensation for civilian workers rose 0.5 percent (nonannualized) in the second quarter, following a 0.4 percent increase in the first quarter. Year-over-year growth rates in the compensation series have been slowly declining from 2.1 percent in the second quarter of 2011 to 1.8 percent for the current quarter. The wages and salary component also increased 0.4 percent, down slightly from the first quarter’s 0.5 percent advance. Civilian wages and salaries increased 1.7 percent for the year and has remained in the range of 1.5 to 1.7 percent for the past 12 quarters. The benefits component continues to slow; increasing 0.6 percent in the first quarter while year over year growth rates have declined from 3.6 percent during the second quarter of 2011 to 2.1 percent in the current quarter. Stable wage and salary growth along with falling benefits costs point signal minimal wage pressures.
Nonfarm payrolls added a mere 80,000 jobs in June, following a slight upward revision to May’s estimate (up from 69,000 to 77,000), but the gain is well off the 12-month pace of 148,000 per month. On net, revisions to the past two months were a wash. That said, the composition of the revisions shifted roughly 20,000 from public to private payrolls. Payroll growth in the second quarter slowed dramatically relative to its average monthly gain in the first quarter (75,000 vs. 226,000). Even if you were clinging to a story that the first quarter was elevated relative to its underlying trajectory and the second quarter is under-reporting the trend, that still leaves the average monthly gain in payrolls over the last six months at 150,000.
For context: The average monthly increase in the civilian labor force over the past 30 years is 125,000, so continued employment gains around 150,000 would do little to tamp down the unemployment rate. In June, most of the meager employment gains came from the private service-providing sector, which increased 71,000 compared to a 13,000 increase in goods-producing payrolls. And, of that 13,000 increase in goods-producing employment, roughly half was due to an increase in motor vehicle and parts payrolls (+7,000). Mining and logging employment was flat in June, and payrolls in the construction industry edged up just 2,000 after a relatively large 35,000 decline in May.
On the service side, temporary employment jumped up 25,000 accounting for 35 percent of the overall sector’s increase in June. Leisure and hospitality payrolls posted the next-largest gain in June, rising 13,000, and reversing losses of 7,000 in May and 4,000 in April. Transportation and warehousing payrolls slipped down 2,000 in June, but that was after a relatively large 32,000 increase in May. Employment losses in June were also seen in retail trade (down 5,400) and the information industry (down 8,000). On the household side of the report; the unemployment rate remained at 8.2 percent in June, as an increase in the civilian labor force of 156,000 slightly outpaced an increase in the number of employed persons (up 128,000). The employment-to-population ratio was also unchanged in June, remaining at 58.6 percent.
Nonfarm payrolls rose just 69,000 in May, following a downwardly revised 77,000 (from 115,000) increase in April. March’s payrolls estimate was also nudged a little lower—from 154,000 to 143,000. Moreover, the downward revisions to March and April were entirely on the private payrolls side (revised down by 62,000) compared to a slight upward revision in government payrolls (adding 13,000). Payroll growth now looks to have slowed considerably from its average monthly gain of 226,000 in the first quarter. The recent fall-off in momentum does appear consistent with the story that first quarter performance was inflated by mild weather and mismeasured seasonals, which may take a little sting out of this report. Nevertheless, if we smooth over the last six reports, payrolls are just averaging a 174,000 gain per month. Goods-producing payrolls slipped by 15,000 in May, its first monthly decline since last August. That decline was due to a relatively sharp 28,000 decrease in construction payrolls. Manufacturing (of durable goods in particular) seems to be the one bright spot on the establishment side of this report. Manufacturing payrolls rose 12,000, roughly in line with its 12 month average gain of 19,000. Durables manufacturing rose 13,000, in large part due to a healthy boost (6,000) from autos manufacturing. Private service-providing payrolls rose 97,000, slightly up from an increase of 83,000 in April, but well below its first quarter average gain of 179,000.
Professional and business services employment looked particularly weak, falling 1,000 in May (despite a 9,000 boost from temp help employment), and contrasting its 12 month average gain of roughly 50,000. Also, leisure and hospitality payrolls fell for the second straight month, edging down 9,000 in May and breaking from its 12 month average gain of 25,000. Government payrolls, which have fallen in every month since July 2010, slipped down 17,000 in May. There was more bad news in hours and earnings. Average weekly hours edged down 0.1 hour to 34.4 hours in May, and are now down 0.2 hours after reaching a post-recession high (and even with its December 2007 level) of 34.6 hours in February. Perhaps the more striking development was the 0.3 hour decline in the average manufacturing workweek (from 40.8 hours to 40.5 hours), only its second decline of that magnitude since the end of the recession. Manufacturing overtime hours edged down 0.1 hour in May. Also, average weekly earnings slipped down 1.7 percent in May, its sharpest decline since last August. On the household side, the unemployment rate edged up 0.1 percentage point to 8.2 percent in May, as the civilian labor force jumped up 642,000 (more than reversing a 500,000 exodus over the previous 2 months), and outpaced a 422,000 rise in the number of employed persons. Reflecting the bounce back in employment during May, the employment-to-population ratio did rise 0.2 percentage points to 58.6, though that's still 0.8 percentage points below its level at the end of the previous recession (June 2009).
Nonfarm payrolls rose just 115,000 in April, about 50,000 lower than private forecasters were expecting. However, both February’s and March’s estimates were revised up, adding 53,000 in sum and providing a rough offset for April’s undershoot. Still, even after factoring in the upward revisions, nonfarm payrolls have averaged a monthly gain of 176,000 over the past 3 months, modestly decelerating from its pace of 218,000 over the previous 3-month span (November to January). Private payrolls appear to be following that trend as well, averaging 183,000 over the past 3 months, compared to a average gain of 230,000 over the 3 months prior. Despite the recent deceleration, the near-term trend in nonfarm payrolls is holding above its average gain over the past 12 months of 151,000 (169,000 for private payrolls). Goods-producing payrolls rose 14,000 in April, following a gain of 38,000 in March. Manufacturing employment (up 16,000) accounted for all of that increase, as mining and logging payrolls were flat and construction payrolls slipped down 2,000. After relatively strong gains in December and January (up 44,000 in total), construction employment has fallen by 6,000. If you were looking to tell a “mild-winter” story (that pulled forward some projects), this might be tentative evidence.
On the service side, professional and business services employment rose 62,000 in April (temporary help employment accounted for a third of the gain), in line with its near-term (3-month) average of 63,000. Retail trade payrolls increased by 29,000 in April, though this comes after declines of 21,000 in March and 15,000 in February. While auto sales and production have been a recent source of (relative) strength, employment in this sector has averaged just 2,400 over the past 3 months, compared to an average monthly gain near 4,000 over the year prior. Elsewhere on the service side, health and education payrolls rose 23,000 in April, slightly off its near-term average gain of 46,000. And leisure and hospitality payrolls rose 12,000 during the month, compared to an average gain of 26,000 over the past year.
On the household side, the unemployment rate ticked down a tenth to 8.1 percent, but not for “good” reasons. The number of employed persons (as measured by this survey) fell 169,000 in April, its sharpest decline since last June, and after factoring in a 31,000 decline in March, has started to undo some of its first quarter strength relative to nonfarm payrolls. While the number of unemployment persons fell as well in April (down 173,000), the civilian labor force shrank by 342,000 (its sharpest decline since January 2011). The labor force participation rate fell 0.2 percentage points to 63.6 percent in April, down 2.4 percentage points from the end of 2007.
Nonfarm payrolls rose 120,000 in March, following revised estimates for January and February that, on net, added 4,000 jobs. Despite the hiccup in March, payrolls have still managed an average increase of 210,000 over the last three months, and are trending above the 12-month average gain of 158,000. Cross-industry performance was mixed. Perhaps surprisingly, manufacturing was among the top gainers in March, adding 37,000 to payrolls (12,000 was in auto manufacturing). Other goods-producing categories didn’t fare as well, as mining and logging payrolls were flat and construction payrolls slipped down 7,000. In the service sector, employment in food services and drinking places rose 37,000, in line with its 6-month average gain of 34,000. Healthcare employment continued its upward march, rising 26,000 during the month. Employment in the financial sector jumped up 15,000 in March, its largest monthly gain since April 2006. Also, professional and business services employment rose 31,000 in March, unaided by employment in temporary help services (which was flat after jumping up 55,000 in February). On the other hand, retail trade payrolls fell by 34,000 in March, following a sharp downward revision to February’s estimate—from a gain of 25,000 to a decrease of 29,000. The average workweek for all employees edged down 0.1 hour to 34.5 hours (factory overtime was unchanged) in March. And earnings ticked up slightly (0.2 percent) and are up 2.1 percent over the past year.
On the household side, the unemployment rate edged down 0.1 percentage point to 8.2 percent. However, that was largely due to a 164,000 decrease in the labor force. The number of employed persons slipped down 31,000 in March (which is roughly flat considering the standard error of this series). The employment-to-population ratio was nudged down 0.1 percentage point to 58.5 percent. Interestingly, the number of persons employed part-time for economic reasons slipped down from 8.1 million to 7.7 million in March, though it's not entirely clear where they went. Given the decrease in hours (from the other survey) and the contraction in the labor force, it may be tempting to speculate that these workers left the labor force, though that is not certain. Also, the number of long-term unemployed (jobless for 27+ weeks) was roughly unchanged in March, still accounting for a little more than 42 percent of the pool of unemployed persons.
Nonfarm payrolls rose 227,000 in February, following upwardly revised gains of 284,000 in January and 223,000 in December. Revisions to the past two months added 61,000 in total (roughly 20,000 of that was upward revisions to government payrolls). Monthly payroll growth has averaged a gain of 245,000 over the past 3 months, compared to an average monthly increase of 153,000 in 2011. Job gains were seen across most broad industries in February, with the only exceptions being construction (down 13,000) and retail trade (down 7,400). Industry gains were led by professional and business services, which added 82,000 in February, compared to its average monthly gain of 50,000 in 2011. Roughly half of February’s overall gain in professional and business services can be traced to an increase in temporary help services payrolls. The other big gainer in February was healthcare employment, which rose by 61,000 and has now added 360,000 over the past 12 months.
In contrast to the slip in construction payrolls, manufacturing employment rose by 31,000 during the month, following a relatively strong (52,000) gain in January, and outpacing is average monthly gain over the past year of 19,000. Interestingly, nearly all of the gains in manufacturing payrolls over the past three months can be tied to gains in durables manufacturing (only a modest amount of that growth was due to gains in motor vehicle and parts assemblies).
Elsewhere on the establishment side of the report, the average workweek for all employees was unchanged at 34.5 hours in February, but the manufacturing workweek ticked up 0.1 hour to 41.0 hours. Also, average hourly earnings for all employees edged up 3 cents to $23.31. However, the year-over-year growth rate in hourly earnings stands at 1.9 percent, which is running slightly below the pace of measured inflation. On the household side, the unemployment rate was flat at 8.3 percent, as a jump in the number of employed persons (+428,000) was offset by a similar gain in the labor force. Still, the employment-to-population ratio ticked up 0.1 percentage point to 58.6 percent (its first increase in three months). Despite recent improvements, the number of long-term unemployed (unemployed for 27+ weeks) was unchanged at 5.4 million in February (or about 43 percent over the pool of unemployed persons).
Nonfarm payrolls jumped up by 243,000 in January, following revisions to 2011 data that left the level of employment as of December 266,000 jobs higher than we previously thought. Importantly, the near term trajectory appears to be looking up. Average payroll growth over the past three months was 201,000, compared to an average gain of 152,000 in 2011. Private payroll growth was a little stronger than the overall gain in January, rising 257,000 (its strongest monthly gain since last April), as government sector employment continued to trend down (decreasing 14,000). Nearly every major private sector industry posted employment gains that either met or exceeded their near-term trends in January. The two exceptions were information sector payrolls (down 13,000) and employment in financial activities (down 5,000). Goods-producing employment posted its highest monthly gain since January 2006, rising 81,000 during the month, and was much improved relative to its 2011 average monthly gain of 33,000. Durable goods manufacturing payrolls rose by 50,000 in January, accounting for much of the overall gain in goods-producing payrolls.
On the service side, notable increases were seen in professional and business services employment (up 70,000—a 10 month high), and transportation and warehousing, which rose by 13,000 in January compared to an average gain of just 7,000 in 2011. Other indicators on the establishment side were mixed. Hours and earnings were little changed. However, the employment diffusion index (which measures the breadth of the employment gains) improved from 62.4 percent to 64.1 percent of firms adding to payrolls. And this improvement appears to be driven by a marked jump up in the manufacturing diffusion index, which rose from 64.2 percent to 69.1 percent in January—its highest level since January 2011.
Any signal of labor market improvement coming from the household side of the report should be weighed against a dramatic adjustment in the Bureau of Labor Statistics’s measurement of the annual population. The civilian noninstitutional population was revised up by 1.5 million people as of December 2011, with most of these individuals “entering” into existence outside the labor force. This led to a 0.3 percentage point drop in the labor force participation rate to 63.7 percent in January. On the other hand, the number of employed persons jumped by 847,000 in January, and the combination of various factors led to a decrease in the unemployment rate from 8.5 percent to 8.3 percent. It is important to note that despite the unusually large increase in the population and the strong January gain in employment, the employment-to-population ratio remained unchanged at 58.5 percent.
- Employer costs of compensation for civilian workers rose 0.4 percent (nonannualized) in the fourth quarter, following a 0.3 percent increase in the third quarter. The wages and salary component also increased 0.4 percent, up slightly from the third quarter’s 0.3 percent advance. The benefits component, averaging 1.2 percent growth in the first half of the year, continues to slow; increasing 0.6 percent in the fourth quarter. Year-over-year, civilian compensation has now advanced 2.0 percent for two straight quarters and has averaged 1.9 percent since the recession ended. Civilian wages and salaries increased 1.5 percent for the year while benefits continue an upward trajectory, increasing 3.2 percent. Year-over-year, private compensation grew 2.1 percent and has averaged 1.9 percent since the recession ended. Private wages and salaries increased 1.7 percent for the year while benefits grew 3.6 percent in 2011. Looking across private industry groups, manufacturing posted the largest increase, 2.8 percent, while leisure and hospitality increased 1.0 for the year.
Nonfarm payrolls rose by 200,000 in December, following an downwardly revised 100,000 gain in November (though October’s estimate was revised upward nearly offsetting November’s adjustment). For 2011 as a whole, total nonfarm payrolls rose by 1.6 million workers. Though after excluding the government sector, which shed nearly 300,000 workers over the year, private payrolls rose 1.9 million. December’s overall gain, which came in above expectations of roughly 150,000, was bolstered by a particularly large jump in transportation and warehousing (up 50,000). The release noted the jump was due to strong seasonal hiring. Interestingly, we saw a similar gain in this series last December that was almost completely wiped out in January. Goods-producing payrolls posted their strongest monthly gain since July, rising 48,000 in December. Gains were spread across the sector, with construction employment jumping up 17,000 (following two consecutive declines that totaled 22,000), manufacturing payrolls that rose 23,000 (more than doubling its total gain over the last 4 months), and mining & logging employment that continued to post modest gains (up 8,000).
On the service side, retail trade employment rose by 28,000 in December, compared to a 39,000 increase in November, totaling a 240,000 gain in 2011 as a whole. Healthcare payrolls continued its steady upward march, rising 29,000 during the month. Employment in the healthcare sector rose by 315,000 in 2011, and by roughly 820,000 since the end of the recession. As an aside, employment in this sector did happen to swell by a little over half a million during the recession). Aside from the surprise in transportation and warehousing, modest gains were seen across other service industries.
Elsewhere on the establishment side of the report, the average workweek did tick up 0.1 hour to 34.4 hours and average hourly earnings rose by 0.2 percent to $23.24. On the year, average hourly earnings rose by 2.1 percent, though (barring a shock in December’s inflation data) failed to keep pace with the rise in the CPI. On the household side, the unemployment rate edged down 0.2 percentage points to 8.5 percent. This follows what we thought was a somewhat shocking 0.4 percentage point (pp) decrease in November, though after a revision to the seasonal factors in 2011, that became a 0.2 pp decline down to 8.7 percent. The unemployment improved modestly during 2011, falling nearly a percentage point—from 9.4 percent to 8.5 percent. However, this improvement came as the civilian labor force, which usually adds a little more than 1 million workers a year, was roughly stagnant. An alternative measure of labor market health—the employment-to-population ratio—stands at 58.5 percent, and has yet to show any significant improvement since the recovery began.
- Overall, November’s report was positive. Importantly, nonfarm payrolls rose by 120,000 in November (consistent with expectations), following upward revisions to the previous two months that added an additional 72,000 jobs to earlier estimates. Government payrolls continued to shrink (falling 20,000 in November), partially masking some of the strength from private payrolls (which rose 140,000). Importantly, the average gain in private payrolls over the last three months (at 160,000) is roughly on par with the longer (12-month) trend in the series of 157,000. Gains were seen across most broad categories in November. Construction was the only category with a significant decrease (down 12,000), while manufacturing employment, as hinted at by yesterday’s ISM survey, was roughly flat during the month. Retail trade employment posted the most robust gain, rising 50,000, its largest gain since April (though it is not clear whether the estimate was affected by a disproportionately large hiring of seasonal workers). Perhaps the most surprising number from this morning’s report was the relatively large tick down in the unemployment rate—from 9.0 percent to 8.6 percent. This is the largest monthly decrease in the unemployment rate since January. Partially accounting for the outsized decline, the labor force participation rate did tick down 0.2 percentage points to 64 percent; but the employment-to-population ratio improved to 58.5 percent—its highest level since March. Other evidence of labor market improvement is that the number of employed persons (according to the household survey) has increased lately. Over the last three months, the average monthly increase in employed persons was 318,000, compared to an average loss of 51,000 over the three months prior.
Nonfarm payrolls rose 103,000 in September (slightly above consensus expectations), following upwardly revised gains of 57,000 in August and 127,000 in September (adding nearly 100,000 in sum). However, September’s increase was boosted by the return of 45,000 telecommunications workers who had been on strike in August. Also, more than half of the upward revision to the two prior months reflected upward adjustments to government employees (largely local government education workers, perhaps reflecting some seasonal back-to-school timing issues).
Importantly, the near-term trend has yet to show a meaningful pickup. It has, in fact, slowed since the first six months of year, as nonfarm payrolls have risen on average just 96,000 over the past three months, compared to 131,000 over the first six months. That trajectory is roughly the same for private payrolls. They have averaged a 117,000 increase over the last three months, down from their monthly average of 165,000 over the first six months of 2011.
Goods-producing payrolls increased by 18,000 in September, more than reversing a 9,000 decrease in August. The series has improved by 430,000 from its current cyclical low in February 2010, but it is still down 320,000 from its level at the end of the recession. September’s slight gain in goods-producing employment was driven by a 26,000 increase in construction payrolls (largely nonresidential construction workers and specialty trade contractors). Manufacturing payrolls slipped down 13,000 during the month (auto payrolls were flat), and mining employment increased by 5,400.
Private service-providing payrolls rose 119,000 in September, though without the return of the striking telecommunications workers the increase would have been just 74,000. Healthcare employment continued to outshine gains in other sectors, rising 44,000 in September. It is now up 650,000 since the end of the recession (about 40 percent of that gain has come in the first nine months of this year).
Elsewhere, professional and business services employment rose 48,000 in September (bolstered by a 19,400 increase in temporary help services). Retail trade payrolls increased 13,600. Government payrolls continued to trend down, slipping 34,000 in September. They have decreased by 267,000 since the beginning of the year. Local government workers, a sizable part of the overall downward trend, fell 35,000. Local government educational services employment decreased 24,400 in September, after an 11,800 gain in August (that was revised up from a 14,000 decrease). Still, the series is down 84,200 over the past six months.
Other indicators on the establishment side were mixed in September. Hours and earnings roughly reversed their respective decreases in August. However, the diffusion index slipped down 0.2 points to 55.4 in September, remaining well below its recent cyclical high of 70.8 in February. The manufacturing sector diffusion index slipped down from 48.8 in August to 46.3 in September, its lowest level since last October.
On the household side, the unemployment rate—which hasn’t moved much all year—remained at 9.1 percent in September. An alternative measure of labor market health—the employment-to-population ratio—ticked up 0.1 percentage point to 58.3 in September, though it is still 0.1 percentage point below its level at the start of 2011 and a little over 1.0 percentage point below its June 2009 level of 59.4 percent.
Nonfarm payrolls were unchanged (with a margin of error of plus or minus 100,000) in August, following downwardly revised gains of 85,000 (from 117,000) in July and 20,000 (from 46,000) in June. However, those downward revisions were almost entirely due to a bleaker picture of government payrolls, as private nonfarm payrolls were only revised down by 3,000 over June and July. Still, over the past three months nonfarm payrolls are averaging a gain of just 35,000, roughly half of its average over the previous 12 months. Private payrolls are telling a similar story of stagnation, averaging just 83,000 over the past three months, compared to an average of 144,000 over the prior 12 months. The Bureau of Labor Statistics (BLS) did note a couple of special factors in August. First, 45,000 Verizon workers were on strike during the reference week (and thus off company payrolls in August), accounting for nearly all of the the decline in the information sector (which fell 48,000). Importantly, even after adding back the workers on strike, private payrolls would have only grown by 62,000, which is far from “robust” employment growth. Also, a return of roughly 22,000 government workers in Minnesota following a partial shutdown bolstered state government payrolls. However, despite this one-off increase, government payrolls slipped down by 17,000 in August, largely on a 20,000 decline in local government payrolls. So far this year, local government employment is down by 421,000.
Across broad industries, performance was mixed. Goods-producing payrolls slipped by 3,000 after a 52,000 gain in July. Construction employment fell by 5,000 in August, while manufacturing payrolls edged down by 3,000 after a 36,000 gain in July. On the service side, payrolls rose 20,000, compared to an average increase of roughly 120,000 over the past 12 months. As usual, healthcare payrolls continued to swell, adding 29,700 in August, in-line with its average gain over the past 12 months of 26,000. On the other hand, retail trade employment slipped down 8,000 in August, following gains of 26,000 in July and 12,000 in June. Average weekly hours of all employees ticked down from 0.1 hour to 34.2 hours in August, its lowest level since January. However, the series has improved markedly from its cyclical low of 33.7 hours in June 2009. Also, average (nominal) hourly earnings for all employees fell by $0.03 in August, its sharpest monthly decline over the short history of this series (which goes back to March 2006). The unemployment rate remained at 9.1 percent in August, despite a slight increase in the labor force participation rate—up 0.1 percentage points to 64 percent (its first monthly uptick since August 2010). The employment-to-population ratio edged up 0.1 percentage points to 58.2 percent, but is still hovering near current cyclical lows.
- Nonfarm payrolls rose 117,000 in July, following an upwardly revised 46,000 in June and 53,000 in May. The revisions added 56,000 on net. Private payrolls were a little stronger than the headline as the government sector shed 37,000 workers (mostly state and local). Since last July government payrolls are down 547,000 workers. Private payrolls rose 154,000 in July and are averaging 111,000 over the past three months (though thatandrsquo;s still well short of its average of 204,000 over the first four months of the year). Goods-producing payrolls rose 42,000 in July, in line with its average over the first four months of the year, after posting two consecutive gains of 20,000 or less. Manufacturing employment rose 24,000 in July, accounting for most of the overall increase in goods-producing payrolls. The gain was bolstered by a 12,000 jump up in motor vehicles and parts employment, likely as supply chain disruptions dissipated. Private-sector employment rose 112,000 in July, following a 64,000 increase in June. Gains were mixed across most major categories, with the largest gains in health care and social assistance (up 37,000), professional and business services (up 34,000), and retail trade (up 26,000). Interestingly, temporary help services, which had been a large part of the initial recovery in employment, were roughly flat in July and have actually fallen roughly 18,000 over the past four months. On the household side, the unemployment rate edged down to 9.1 percent, though that appears to largely be a function of a decrease in the labor forceandmdash;which slipped down roughly 200,000 in July. The labor force participation rate decreased by 0.2 percentage points to 63.9 percent (a fresh cyclical low). Importantly, the employment-to-population ratio also edged down 0.1 percentage point to 58.1 percent (also a new cyclical low).
Nonfarm payrolls were essentially flat in June, growing just 18,000 and falling well short of consensus expectations. Revisions to the past two months lowered nonfarm payroll estimates for April and May by a total of 44,000. Factoring in the two-month gain through revisions to government payrolls of 24,000, the private sector lost a total of 68,000 from their April and May totals. Since averaging a gain of 220,000 nonfarm payrolls from February to April, the past two months have added an average of 22,000 jobs. Goods-producing payrolls were virtually unchanged in June (up 4,000) following a similarly flat May (up 3,000). Construction payrolls fell 9,000 in June, while mining and logging payrolls rose by 7,000. Manufacturing payrolls gained 6,000 during the month, continuing its slowdown from the first quarter. Private service-producing employment rose by 53,000 in June, matching the 70,000 gain in May after strong gains in April and March. Retail trade employment remained a fairly noisy series in June, adding 5,200 payrolls after a 4,300 decline in May (the noise is characteristic of either seasonal adjustment issues or mismeasurement). Professional and business services added 12,000 jobs in June, fewer than the 90,000 added in April and May, but did so after the decline in temporary help services continued for the third consecutive month. Temporary help services payrolls have fallen by 19,100 over the past three months. Education and health services hit a bump in June, coming in flat after averaging a gain of 35,000 over the past 12 months. Revisions also knocked a total of 30,000 payrolls off of education and health services employment gains over April and May. Leisure and hospitality rebounded from a 24,000 decline in May by adding 34,000 payrolls in June.
Average weekly hours of private employees dropped slightly from 34.4 in May to 34.3 in June, and the index of aggregate hours decline from 93.9 to 93.6. The breadth of the expansion, as indicated in the 1-month diffusion index, did not recover from May’s 54.1 reading. June’s index was reported as 53.4, indicating that just over half of private industries added to their payrolls during the month. Turning to the household side of the report, the unemployment rate edged up for the second consecutive month, going from 9.1 percent to 9.2 percent in June. The unemployment rate increase came in as the increase in the number of unemployed outpaced the decline in the labor force. There was also a move up in the other measures of labor underutilization (U4, U5 and U6) that include discouraged and marginally attached workers in the underlying definitions. The employment-to-population ratio fell from 58.4 to 58.2, matching its low during the cycle. The labor force participation rate fell to its lowest value since 1984, falling to 64.1 percent.
Nonfarm payrolls were little changed in May, rising just 54,000 and coming in well below consensus expectations. Revisions to the past two months data were also disappointing, as nonfarm payrolls were revised down in April and March by 39,000 (29,000 of that came from private payrolls). May’s performance looks like a clear break from the recent past, as average gain in nonfarm payrolls over the prior three months was 220,000. However, since the official end of the recession 23 months ago, nonfarm payroll employment has increased just 550,000, while private payrolls have gained nearly 1 million workers. Goods-producing payrolls were virtually unchanged in May (up 3,000), following an average gain of 53,000 over the prior three months. Construction employment increased 2,000 in May, while mining and logging payrolls rose by 6,000. Manufacturing payrolls, which have swelled by 160,000 in the past six months, slipped down 5,000 during the month, in concert with the recent dour reports on the sector. Private service-providing employment rose 80,000 in May, following stronger readings in April (up 213,000) and March (up 179,000). Retail trade employment, which has been bouncing around noisily over the past six months or so, slipped down by 8,500 in May after a relatively strong 64,000 gain in April (behavior characteristic of either seasonal adjustment issues or mismeasurement ). Smoothing over the last three months, retail trade payrolls are averaging a gain of 16,600, compared to an average increase of 9,000 over the past 12 months. Professional & business services payrolls posted the largest increase across broad service industry categories in May, rising 44,000 and doing so without a boost from temporary help services, which fell slightly for the second consecutive month.
Elsewhere, education and health services employment continued its acyclical upward trend (rising 34,000), while leisure and hospitality employment edged down 6,000, contrasting rather robust gains over the prior three months (totaling 132,000). Average weekly hours of private employees were unchanged at 34.4 hours in May, but average hourly earnings ticked up 6 cents an hour to $22.98/hour. Unfortunately, the breadth of the expansion in payrolls appeared to falter in May, as the one-month diffusion index fell from 65.0 to 53.6 (indicating that just over half of private industries added to their payrolls during the month). On the household side of the report, the unemployment rate edged up from 9.0 percent to 9.1 percent in May as the number of unemployed persons and the labor force ticked up slightly. The employment-to-population ratio remained at 58.4 percent and is essentially unchanged over the past five months.
- Nonfarm payrolls rose 244,000 in April (surprising expectations to the upside) bringing its average gain over the past three months to 233,000, compared to its 12-month average increase of just 109,000. Revisions to the prior two months’ estimates added 46,000 in sum, perhaps making the headline increase a little more encouraging. Private payrolls rose 268,000 in April—its largest monthly increase since February 2006—and are averaging a gain just north of 250,000 over the past three months. Private payrolls gains have been outpacing total payrolls lately because state and local governments are shedding employees (down 142,000 in the last six months, an average loss of 24,000 per month). Employment gains were broad-based across major industries in April. Interestingly, the only decrease came from temporary help services (slipping down 2,300), which may be an indication that firms are becoming less timid with respect to permanent hires. Goods-producing employment increased 44,000 in April, compared to a 37,000 increase in March. Manufacturing employment rose 29,000 during the month, accounting for most of the increase in the goods sector. Manufacturing payrolls have swelled by 141,000 through the first four months of 2011, and are up 250,000 since a cyclical low in December 2009. Service-sector employment rose by 224,000 in April, a slight acceleration compared to March’s increase of 194,000. Retail trade payrolls rose 57,100 in April, its largest monthly gain since April 2000, though about half of that increase looks to be noise, as employment in general merchandise stores rose 27,400 rebounding from a decrease of 26,600 in March. Leisure and hospitality payrolls rose by 46,000 in April, following gains of 51,000 in March and 54,000 in February. The largest driver of this gain is employment at food services and drinking places, which have averaged a gain of 32,400 over the past three months, compared to just 3,000 over the prior three months. Elsewhere in the service-sector, health care and education employment rose 42,000 and professional and business services employment increased 26,000 (again, without a boost from temporary help services). The household side of the report didn’t mesh with the positive signs from the establishment survey (a not-all-too uncommon occurrence on a monthly frequency). The unemployment rate rose 0.2 percentage point to 9.0 percent in April as the number of unemployed persons increased by 200,000. The labor force was roughly unchanged during the month. Also, the employment-to-population ratio edged down a tenth to 58.4 percent in April.
Nonfarm payrolls increased by 216,000 in March. Since their recent low in February 2010, they have risen 1.5 million. January and February’s estimates were revised up slightly (up 7,000 in sum), with an upward revision to private payrolls of 44,000 more than offsetting a downward revision to government payrolls of 37,000. Government payrolls slipped again in March, falling 14,000 (their fifth consecutive decline). The decline hass been driven largely by local government employment losses. Private payrolls rose 230,000 in March and, perhaps breaking slightly with their recent past, saw relatively broad-based gains. Only three major industries experienced employment losses in March (construction, transportation and warehousing, and information), with a combined decrease of 4,100. Goods-producing payrolls increased by 31,000 during the month, as mining employment increased 15,000 and manufacturing payrolls increased 17,000 (and construction employment fell 1,000). Recent gains in manufacturing have largely reflected gains in durables payrolls, which have averaged an increase of 22,000 over the past six months, compared to 20,000 for all of manufacturing. Private services employment rose 199,000 in March, its largest increase since November 2006. Service-side gains were led by professional and business services, which increased by 78,000 (roughly 40 percent of the increase was due to temporary help services). Also within the category, accounting and bookkeeping payrolls had a relatively large jump up of 20,000, though this may be some seasonal noise, as the not-seasonally-adjusted employment change was −1,400. Other gains on the service side came from health care and social assistance (up 44,500), leisure and hospitality (up 37,000), and retail trade (up 17,700). On the household side of the report, the unemployment rate edged down 0.1 percentage point to 8.8 percent. It has fallen 1.0 percentage point in the last four months. The employment-to-population ratio also improved in March—rising 0.1 percentage point to 58.5 percent (its highest level since last September).
Nonfarm payrolls rose by 192,000 in February, following upwardly revised estimates for January and December that, in sum, added 58,000. Private payroll gains outpaced the headline increase, rising by 222,000 in February as government payrolls slipped down by 30,000 (the loss was roughly split between state and local governments). Over the past three months, private payroll gains have averaged 152,000, compared to an average monthly gain of 107,000 over the previous twelve months. Goods-producing employment increased by 70,000 in February, posting its largest monthly gain in five years. Part of the reason for the relatively strong increase was that construction payrolls jumped up by 33,000, reversing a (likely weather-related) 22,000 decline in January. Manufacturing employment also rose by 33,000, but this came on the heels of an upwardly revised 53,000 increase in January. The durables sector accounted for nearly all of February’s gain, continuing its recent trend. Since December 2009, durables employment has risen 233,000, while nondurables payrolls have decreased 37,000. On the service side, February payroll gains were led by healthcare and social assistance (up 36,200), leisure and hospitality (up 21,000), and temporary help services (up 15,500). Retail trade payrolls decreased by 8,000 in February, partially reversing a 31,000 gain in January.
A positive sign buried in the details: the one-month diffusion index for private establishments—a measure of the breadth but not intensity of employment gains—jumped up from 60.1 percent to 68.2 percent in February (its highest level since May 1998). On the household side, the unemployment rate edged down from 9.0 percent to 8.9 percent as the number of unemployed persons fell by 190,000, outpacing an increase in the labor force by 60,000. While there are some technical reasons to discount the recent decrease in the unemployment rate, it still has fallen by nearly a percentage point over the past three months. In contrast, the employment-to-population ratio has only improved by 0.2 percent to 58.4 percent over that time period.
Nonfarm payrolls ticked up just 36,000 in January. Still, even after factoring the upward revisions, January’s payroll gain fell shy of the Bloomberg survey’s median forecast of 150,000. There were a couple of technical factors contributing to the poor estimate. First, annual revisions derived from unemployment insurance tax records (as well as updated birth/death model adjustments and new seasonal factors) knocked down the trajectory of the recovery a little, as the level of nonfarm payrolls in December 2010 was adjusted down by 483,000. Also, severe winter weather in January contributed to a decline in construction employment (down 32,000) and may have affected temporary help services (THS) as well. THS employment fell 11,000 in January, compared to an average gain of 25,000 per month over the last 12 months.
The news wasn’t all bad on the goods-producing side, as manufacturing payrolls rose 49,000 in January, compared to an average monthly gain of 9,000 in 2010. On the service side, payrolls increased just 32,000, following increases in excess of 100,000 over the previous five months. Retail trade employment increased by 27,500 in January and is up just 123,000 since a trough for the series in December 2009.
Perhaps the only constant in this release was the continued, seemingly acyclical growth in healthcare employment, which rose roughly 11,000 in January. The average weekly workweek for all employees on private nonfarm payrolls fell by 0.1 hour to 34.2, though that appears to have been impacted by a near full hour decline in the construction workweek—from 38.1 hours to 37.3 hours. On the other hand, average hourly earnings jumped up 8 cents to $22.86, its largest monthly gain since November 2008. On the household side, annual population control adjustments (still based on the 2000 Census) decreased the civilian population by 347,000, the civilian labor force by 504,000, and employment by 472,000. Importantly, the BLS has not revised the estimates for December 2010 and earlier releases, making the comparison to January’s estimates more noisy than usual. The resulting unemployment rate slipped down by 0.4 percentage point to 9.0 percent. Regardless of the asterisk you may hang on January’s data, the unemployment rate has improved recently, but at 9.0 percent it is still well above its pre-recession level and the employment-to-population ratio improved by 0.1 percentage point in January and December and now sits at 58.4 percent (still 4.3 percentage points below its December 2007 level).
- Nominal personal income rose 0.3 percent (non-annualized) in November, following a downwardly revised (but still relatively strong) 0.4 percent gain in October. Nominal disposable income—income less current taxes—rose 0.3 percent in November. After adjusting for price changes, “real” disposable income increased 0.2 percent, and is up 2.4 percent over the past year. Real personal consumption expenditures, which were revised down from a 2.8 percent annualized gain in the third quarter to 2.4 percent, rose 3.9 percent in November and are trending at an annualized 5.0 percent through the first two months of the fourth quarter. Personal savings as a percent of disposable income ticked down to 0.1 percentage point to 5.3 percent in November, continuing to shy away from a recent high of 6.3 percent in June.
Nonfarm payrolls disappointed expectations (+150,000), rising just 39,000 in November. While revisions to the previous two months added 38,000 in sum, just 6,000 of that gain was from private payrolls. Over the past three months, nonfarm payrolls are averaging a gain of 62,000 a month, which isn't much of an improvement compared to its 12-month average of 70,000. The trend in private payrolls is faring a little better, averaging 107,000 over the past three months compared to its average monthly gain over the past 12 months of 91,000. Goods-producing payrolls slipped 15,000, largely on a 13,000 decrease in manufacturing payrolls, which, when compared with its December 2009 level, are up only 114,000. The service sector added 65,000 in November, but that was off its pace of 135,000 over the previous three months. Accounting for some of the drop-off in service-sector payrolls was a 28,100 decline in retail trade employment (its largest monthly decline since October 2009). Given the time of year (and the relative size of the decrease), it’s possible that the seasonal adjustment factors may be taking a little too much off the top. Still, even if employment in the retail trade was flat, it doesn't make up for the total miss in payrolls relative to expectations. The bright spots on the establishment side continue to be health care and temporary help services, up 19,200 and 39,500, respectively, in November. Temporary help services have now added nearly a half million to payrolls since September 2009, while health care employment is up roughly 300,000 over that time period. On the household side, the unemployment rate rose 0.2 percentage points to 9.8 percent in November, as the number of unemployed persons rose 273,000. Moreover, the employment-to-population ratio, which had been as high as 58.8 percent in recent months, ticked down 0.1 percentage point to 58.2 percent, back down to its current cyclical low (matching its level from last December).
- Nonfarm payrolls expanded by 151,000 in October, following large upward revisions to private payrolls in September and August (totaling 93,000), and leaving its three month average increase at 136,000. As expected, government payrolls ticked down slightly (−8,000) as the number of temporary Census workers left on the payroll dwindled to a negligible 1,000. Nearly all of October’s gain came from the service side, as goods-producing payrolls only edged up 5,000. In fact, construction and manufacturing employment levels are little changed since May. On the service side, the largest gains came from education and health services (up 53,000), temporary help services (up 34,900), and retail trade (up 27,900). Temporary help services have increased by roughly 409,000 over the past year, accounting for almost 40 percent of the growth in private-service sector employment over that time period. Also, average hours and earnings continued to increase. On the household side of the report, the number of unemployed persons was little changed in October, and the unemployment rate remained at 9.6 percent. However, both the labor force participation rate and the employment-to-population ratio worsened during the month. The participation rate fell 0.2 percentage points to 64.5. And perhaps more importantly, the employment-to-population ratio—which tends to be a cleaner measure of labor market duress than the unemployment rate—slipped down from 58.5 percent to 58.3 percent in October and is now hovering just 0.1 percentage point above its current cyclical low of 58.2 reached last December.
- Total nonfarm payrolls slipped down 95,000 in September, largely reflecting a decrease of 159,000 in government payrolls, which was roughly split between a 77,000 decrease in temporary Census workers and a decline of 76,000 in local government workers (its largest decline since July 1982). While effects from the Census are nearing their final throes, local government decreases seem to have increased in recent months, averaging a roughly 50,000 decrease over the past three months compared to a roughly flat average since the beginning of the recession (perhaps some speculative evidence of budgetary strains?). Revisions to the past two months revealed a combined 15,000 decrease, but that came as losses in government payrolls (−51,000) swamped upward revisions to private sector (+36,000). Private payrolls appear to be gaining some traction, rising by 64,000 in September, following upwardly revised gains of 93,000 in August and 117,000 in July. Over the last six months, the average gain in private payrolls has been 107,000, compared to an average of −6,000 over the six months prior to that. Goods-producing payrolls fell 22,000 in September, though that was largely on as construction employment decreased 21,000, nearly reversing a 31,000 increase in August. Manufacturing payrolls were just shy of flat, while mining payrolls increased slightly (up 5,800). Private service-sector employment increased by 86,000 during the month, nearly matching its gains over the previous two months. The largest gains in the sector came from leisure and hospitality (up 38,000), health care (up 24,000), and temporary help services (up 17,000). Other measures that have been showing some recent improvement, average hours and earnings, were flat in September, though factory overtime ticked up from 3.8 hours to 3.9 hours. On the household side, the unemployment rate remained at 9.6 percent and the employment-to-population ratio was unchanged at 58.5 percent.
- The Fourth District’s unemployment rate remained at 9.6 percent for the month of July. The distribution of unemployment rates among Fourth District counties ranges from 7.4 percent (Delaware County, Ohio) to 18.4 percent (Magoffin County, Kentucky), with the median county unemployment rate at 10.8 percent. County-level patterns are reflected in statewide unemployment rates as Ohio and Kentucky have unemployment rates of 10.3 percent and 9.9 percent, respectively, compared to Pennsylvania’s 9.3 percent and West Virginia’s 8.6 percent.
Total nonfarm employment fell by 131,000 in July, as government jobs declined by 202,000 and private payrolls grew by a less-than-expected 71,000. Most of the government losses in July were due to the termination of 143,000 temporary Census positions, as was the case in June, when government employment declined by 252,000. Downward revisions to May and June’s total payroll figures amounted to 97,000, leaving May with a slightly smaller gain of 432,000 and June with a much larger loss of 221,000.
Private payroll gains were evenly shared between goods-producing and service-providing industries. Within goods-producing industries, gains were led by manufacturing, which tacked on 36,000 jobs in July and has expanded solidly since January. Construction, on the other hand, continued to struggle amidst a still-weak housing market, losing 11,000 jobs over the month following a 21,000 loss in June. Within services, payroll gains were most notably led by health services (27,800) and trade, transportation, and utilities (25,000). At the same time, the largest losses came from the financial activities sector (17,000) and professional and business services (13,000). In the nine months since last September, temporary help services has added nearly 370,000 jobs and has largely driven the positive performance in the professional and business services sector as a whole over that period. It comes as no surprise, then, that July’s loss of professional and business services jobs was accompanied by the first net decline in temporary help positions in nine months.
Despite July’s drop in total payroll employment, the unemployment rate remained unchanged at 9.5 percent, but only because 181,000 people exited the labor force. Over the last three months alone, the labor force has contracted by more than 1.1 million people. The employment-to-population ratio—considered a less noisy indicator of labor market stress—ticked down for the third straight month, from 58.5 percent to 58.4 percent in June. It now stands 4.3 percentage points below its level at the onset of the recession.
- The Employment Cost Index (ECI) for civilian workers increased 2.1 percent (annualized rate) in the second quarter, down slightly from an increase of 2.5 percent in the first quarter, but still represents a slight firming over its longer-term (4-quarter) growth rate of 1.9 percent. Wages and salaries for both state & local government workers as well as private industry workers, rose 1.8 percent in the second quarter. However, the 4-quarter growth rate in private industry wages and salaries improved by 0.2 percentage point to 1.6 percent, while the trend for state & local government workers slipped from 1.8 percent to 1.3 percent in the second quarter.
Nonfarm payrolls slipped down by 125,000 in June, though that was on a 225,000 decrease in temporary Census takers. Private payrolls rose 83,000 during the month and have increased by 593,000 since the first of the year, but are still 7.9 million below its level in December 2007. While June’s increase in private payrolls is an improvement over May’s downwardly revised 33,000, it is still under-performing the 3-month average gain of roughly 150,000 prior to May. Across sectors, gains were paltry though fairly widespread. Notably, temporary help services continues to bolster the overall increase in private payrolls, adding 20,500 workers in June and is now up nearly 200,000 for the year. Another relatively large increase came from the leisure and hospitality sector, which rose by 37,000. However, delving into the weeds reveals that the gain was driven mostly by a 28,000 increase in amusements, gambling, and recreation employment that followed a 16,000 loss in May (likely a seasonal adjustment or measurement issue). Goods-producing employment was fell by 8,000 in June, as construction employment followed up a 30,000 dip in May with a 22,000 loss and gains in the manufacturing sector slowed down—from an average of 30,000 over the past three months to 9,000 in June. The average workweek for all employees ticked down 0.1 hour to 34.1 hours in June (its first decline since February), largely on a 0.5 hour drop in the manufacturing workweek to 40.0 hours. Average hourly earnings of all employees were nudged down 2 cents to $22.53 in June, while average hourly earnings of production and nonsupervisory workers were flat at $19.00.The unemployment rate ticked down from 9.7 percent to 9.5 percent in June, as 652,000 people (or 0.4 percent) left the labor force in June. A decrease of this magnitude has only happened two other times since the 1990 recession: recently in December 2009 (down 0.4 percent), and in May 1995 (down 0.6 percent). A less noisy indicator of labor market duress—employment-to-population ratio—ticked down from 58.7 percent to 58.5 percent in June, 4.2 percentage points below its level at the start of the recession.
The Fourth District’s unemployment rate decreased 0.1 percentage point to 10.2 percent for the month of May. The dip in the unemployment rate can be attributed to a decreases in the number of people unemployed (−1.7 percent) and the labor force (−0.6 percent).
The distribution of unemployment rates among Fourth District counties ranges from 7.4 percent (Delaware County, Ohio) to 19.4 percent (Menifee County, Kentucky), with the median county unemployment rate at 11.3 percent. County-level patterns are reflected in statewide unemployment rates, as Ohio and Kentucky have unemployment rates of 10.7 percent and 10.4 percent, respectively, compared to Pennsylvania’s 9.1 percent and West Virginia’s 8.9 percent.
Nonfarm payrolls rose 431,000 in May, almost entirely on a 411,000 boost from temporary Census takers. Private nonfarm payrolls inched up just 41,000 in May, compared to an average gain of 146,000 over the prior three months. Also, revisions subtracted an additional 29,000 from private payrolls over April and March. On the goods-producing side, construction employment fell by 35,000 during the month, resuming its string of losses after gains of 14,000 in April and 27,000 in March.
Since December 2007, construction employment has fallen by 1.9 million workers (or roughly 25 percent). On the brighter side, manufacturing payrolls increased by 29,000, driven by broad-based gains in the durables sector, where employment rose for the fifth consecutive month. Private service-providing employment increased by just 37,000 in May, following gains of 156,000 in April and 101,000 in March. Service-sector employment was again bolstered by an increase in temporary help services (up 31,000), as retail trade payrolls fell 9,000 and financial activities employment edged down 12,000. Average weekly hours of production and nonsupervisory workers continued to improve, ticking up 0.1 hour to 33.5 hours, their highest level since October 2008. Also, factory overtime hours rose 0.2 hour to 4.1 hours, their highest level since the first few months of 2008, which is closing in on their 2004–07 average of 4.4 hours. On the household side, the unemployment rate slipped down to 9.7 percent in May, but that came as 322,000 individuals left the labor force and the labor force participation rate fell 0.2 percentage point (pp) to 65.0 percent. A less noisy barometer of labor market conditions, the employment-to-population ratio, fell 0.2 pp to 58.7 percent in May.
Nonfarm payroll employment grew by 290,000 in April, topping expectations for roughly a 200,000 gain. Census hiring inflated April’s figure by 66,000, but private payrolls still increased a healthy 231,000 when discounting the government’s boost. Revisions to February and March figures were solid as well, tacking on an additional 121,000 jobs and leaving those months’ respective gains at 39,000 and 230,000. Employment growth in April was broad-based. Jobs in goods-producing industries expanded by 65,000, and services expanded 166,000, its largest increase in over three years. The most impressive gains in the report came from manufacturing (44,000) and professional and business services (80,000), which received a helping hand yet again from temporary help hiring (26,000). Another bright spot was an increase in the average workweek for production and nonsupervisory workers, which climbed to 33.4 hours from 33.3 in March, and a 0.2 hour increase in factory overtime.
On the household side, the unemployment rate rose 0.2 percentage point (pp) to 9.9 percent, defying expectations for a 0.1 pp decline. However, the rise should not be considered a strictly negative development because it reflects the largest influx of workers to the labor force (805,000) since January 2003. Labor force participation jumped up 0.3 pp to 65.2 percent in April (its fourth consecutive increase), and the employment-to-population ratio also continued to improve, ticking up 0.2 pp to 58.8 percent.
- After surging 6.3 percent in the fourth quarter, nonfarm business sector productivity increased at an annualized pace of 3.6 percent in the first quarter. On a year-over-year basis, productivity is up 6.3 percent, its highest growth rate since 1962:Q1. The first quarter’s productivity gain came as real output jumped up 4.4 percent, while hours worked rose for the second consecutive quarter, up 0.8 percent. Nominal compensation per hour increased 1.9 percent in the first quarter, though after adjusting for price effects, “real” compensation ticked up just 0.4 percent. Still, over the past year compensation is down 0.1 percent. As gains in output have outpaced compensation growth, unit labor costs have continued to decline, slipping down 1.6 percent in the first quarter, though this is somewhat of an improvement in the series given the growth rate over the second half of 2009 was −6.6 percent. On a year-over-year basis, unit labor costs are down 3.7 percent.
- The Fourth District’s unemployment rate increased 0.1 percentage point to 10.5 percent for the month of March. The increase in the unemployment rate is attributed to an increase in the number of people unemployed (0.8 percent) and the labor force (0.1 percent) outpacing increases in the number of people employed (0.1 percent). The distribution of unemployment rates among Fourth District counties ranges from 7.6 percent (Fayette County, Kentucky) to 19.5 percent (Magoffin County, Kentucky), with the median county unemployment rate at 11.4 percent. These county-level patterns are reflected in state-wide unemployment rates as Ohio and Kentucky have unemployment rates of 11.0 percent and 10.7 percent, respectively, compared to Pennsylvania’s 9.0 percent and West Virginia’s 9.5 percent.
The Fourth District’s unemployment rate increased 0.2 percentage point to 10.4 percent for the month of February. The increase in the unemployment rate is attributed to an increase of the number of people unemployed (1.9 percent) and an increase in the labor force (0.2 percent).
The distribution of unemployment rates among Fourth District counties range from 7.5 percent (Butler County, Pennsylvania) to 20.8 percent (Magoffin County, Kentucky), with the median county unemployment rate at 11.4 percent. These county-level patterns are reflected in statewide unemployment rates as Ohio and Kentucky have unemployment rates of 10.9 percent and 10.9 percent, respectively, compared to Pennsylvania’s 8.9 percent and West Virginia’s 9.5 percent.
Nonfarm payrolls jumped up 162,000 in March, following upward revisions to January and February that added, on net, an additional 62,000. Yes, today’s report was bolstered by temporary Census hiring, but not quite to the extent of some had expected (adding 48,000). Private nonfarm payrolls jumped up 123,000 in March, its largest monthly gain since May 2007, though there may be some “payback” in there from February’s winter storms that blanketed the Northeast. That said, even if you average over February and March (+66,000), it’s still the largest two month average in a little over two years. Gains were broad-based in March, as nearly every major category posted increases except for financial activities (−21,000). As has been the case over the past six months or so, temporary help services posted another relatively strong increase, rising 40,000 March, and has added 313,000 since last October. Healthcare and education employment also continued to trend higher, increasing 45,000 and 22,000, respectively in March. Also, the manufacturing sector eked out a slight gain (up 17,000) in March, while construction employment increased for the first time since June 2007 (up 15,000). Other positive signs coming from the establishment survey included a 0.2 hour increase in the average workweek of production and nonsupervisory workers (rising from 33.1 hours to 33.3 hours), a tick up in the manufacturing workweek, and a 0.2 hour increase in factory overtime.
As for the household survey; the unemployment rate remained at 9.7 percent as the number of unemployed persons continued to hover around 15 million in March. However, the labor force participation rate continued to edge higher, rising 0.1 percentage point (pp) to 64.9 percent in March, up 0.3 pp from its current cyclical low in December. Also, the employment-to-population ratio ticked-up 0.1 pp to 58.6 percent in March.
The Fourth District’s unemployment rate decreased 0.5 percentage point to 10.2 percent for the month of January. The decline in the unemployment rate is attributed to an increase of the number of people employed (0.8 percent), a decrease in the number of people unemployed (−3.6 percent) and an increase in the labor force (1.0 percent).
The distribution of unemployment rates among Fourth District counties ranges from 7.1 percent (Greene County, Pennsylvanis) to 21.2 percent (Magoffin County, Kentucky), with the median county unemployment rate at 11.3 percent. These county-level patterns are reflected in state-wide unemployment rates as Ohio and Kentucky have unemployment rates of 10.8 percent and 10.7 percent, respectively, compared to Pennsylvania’s 8.8 percent and West Virginia’s 9.3 percent.
Nonfarm payrolls edged down a slight 36,000 (changes of plus or minus 100k are needed for significance) in February, following a decrease of 26,000 in January. On net, back revisions (to the two previous months) added 35,000. Concerning the snow storms, the BLS added a technical note explaining that in order for the weather to have affected the estimates, employees must have been sidelined (not paid) for any part of that pay period (about half the survey has a pay period longer than one week). Also, there might have been additions due to hirings for snow removal, making any determination on the net effects of the storms “not possible to quantify precisely.” Turning to the details of February’s report, private payrolls fell 18,000, compared to losses of 33,000 in January and 83,000 in December. Construction employment saw the worst of it during the month, slipping down 64,000, and has now fallen by 1.9 million since December 2007. Manufacturing payrolls were essentially flat in February. The service side added 42,000 workers in February. As gains in temporary help services (up 48,000), education (up 12,000), and health services (up 20,000) more than offset losses in information industries (down 18,000), transportation (down 12,000), and financial activities (down 10,000). Federal government payrolls added 7,000 in February, mostly as temporary hiring for the Census (plus 15,000) offset a decline in postal service employment (down 9,000). Local government payrolls continue to shed workers, cutting 31,000 in February, and have trimmed 156,000 (or 1.1 percent) over the past year. Average weekly hours of production and nonsupervisory workers slipped down 0.2 hour to 33.1 hours, though this was largely due to a large decrease in construction hours, slipping from 37.8 hours to 36.8 hours, which the BLS noted likely reflected the “unusually severe winter storms.”
On the household side, the number of unemployed persons was virtually unchanged in February, and the unemployment rate remained at 9.7 percent (analysts expected a slight uptick to 9.8 percent). Also, the employment-to-population ratio improved for the second consecutive month, ticking up 0.1 percentage point (pp) to 58.5 percent in February.
- Nonfarm payroll employment slipped down just 20,000 in January, following a downwardly revised 150,000 loss in December and an upward revision to November’s payrolls (from 4,000 to 64,000). The release corresponds with the BLS’ annual benchmark (adjusting for seasonals, unemployment insurance tax records, and updated business birth/death model adjustments), which pushed down the March 2009 payrolls level by 930,000 (a little more than the preliminary benchmark suggested). Given the revisions, payrolls have fallen by 8.4 million since December 2007, though over the past three months have averaged a negligible decline of 35,000. Digging into the January detail reveals some noteworthy positive trends. First, while goods producing industry employment fell by 60,000 during the month, manufacturing payrolls increased by 11,000, its first increase in three years (January 2007). Also, private service providing payrolls rose by 48,000, lifted by relatively strong increases in retail trade employment (up 42,000) and gains in temporary help services (up 52,000). Over the past three months, temporary help services payrolls have risen by an average of 68,400, perhaps an indicator that employers, still too wary to add permanent employees, are starting to sop up some nascent increases in demand. Bolstering that story, would be evidence of other relatively easy ways employers ramp-up, such as increased hours and overtime. The average workweek of private production and nonsupervisory workers ticked up 0.1 hour to 33.3 hours, while the manufacturing workweek jumped up 0.3 hour to 39.9 hours, and factory overtime increased by 0.1 hour. New with this release, the BLS also published hours and earnings for all private sector employees. The average workweek for all private employees edged up 0.1 hour to 33.9 hours in January, while average hourly earnings rose 0.2 percent to $22.45. One other detail to note is that temporary hiring due to the 2010 Census is already starting to trickle in, as the BLS mentioned that the 33,000 gain in federal government payrolls during January included 9,000 Census workers. This effect is expected to be rather sizable heading into March and April. The BLS did not leave the household survey untouched either, updating the series with new population estimates. The adjustment decreased the estimated size of the noninstitutional population in December 2009 by 258,000, the civilian labor force by 249,000, and employment by 243,000. However, it did note the roughly offsetting effects has having a "negligible impact on unemployment rates and other percentage estimates." In January, the number of employed persons jumped up by 541,000, reversing a 589,000. Also, the labor force grew by 111,000, pushing the participate rate up 0.1 percentage point to 64.7. Reinforcing the tick-down in the unemployment rate (from 10.0 percent to 9.7 percent), the employment-to-population ratio (a somewhat less noisy measure of labor market slack) improved by 0.2 percentage points, its second increase (and largest) since January 2008. Also, the oft cited U-6 measure of labor market underutilization (which includes marginally attached workers and those working part-time for economic reasons) fell a whopping 0.8 percentage points to 16.5 percent (its largest decrease on record, though the record only goes back to 1994).
- The Employment Cost Index (ECI) for civilian workers increased 1.8 percent (annualized rate) in the fourth quarter of 2009. Over the past year, the ECI is up only 1.5 percent, a new low in the history of the series. Wages and salaries for state and local government workers increased 1.4 percent following a slight dip of 0.4 percent in the 2009:Q3, while wages and salaries of workers in private industry increased 1.8 percent. Benefits rose 1.8 percent during the quarter, up from 1.5 percent in the previous quarter.
Nonfarm payrolls, though still solidly negative, continued to improve in August, decreasing 216,000 compared to an average loss of 482,000 over the past six months. However, revisions to June and July’s payroll estimates were to the downside, subtracting an additional 49,000 (though that came entirely from downward revisions to government payrolls). Private payrolls fell 198,000 in August its smallest decline in 12 months. Payroll losses moderated across most of the major categories in August. Goods-producing payrolls fell 136,000 in August, with losses evenly split between construction and manufacturing. Service sector employment fell by 80,000, following a 154,000 decline in July. Retail trade payrolls fell by just 10,000 in August, compared to an average loss of 41,000 over the past six months. Auto dealers, electronics and appliance stores, and department stores actually posted gains in August (a first for electronics stores in nearly a year and the first gain for auto dealers since October 2007).
After somewhat of an artificial tick-down in July (from 9.5 percent to 9.4 percent—on a decrease in the workforce) the unemployment rate rose 0.3 percentage point to 9.7 percent in August. The number of unemployed persons jumped up 466,000 in August after a 267,000 decrease in July (highlighting the volatility of the series), while 73,000 people entered the workforce during the month. An alternative (and somewhat less noisy) measure of labor market duress, the employment-to-population ratio slipped down 0.2 percentage point in August to its lowest level since 1984—59.2 percent.
Nonfarm payrolls posted their smallest decrease since last August, decreasing 247,000 in July and beating expectations of a 320,000 decline. Moreover, revisions to both May and June’s estimates were positive, adding 43,000. That said, since the start of the recession, payroll employment has fallen by 6.7 million, back to mid-2004 levels. Losses were still widespread across the major categories in July, though at a markedly slower rate (in most cases). For example, manufacturing employment decreased by 52,000 in July, compared to an average loss of 172 since the beginning of the year. Also, professional and business service payrolls slipped just 38,000 in July, much less than the average loss of −118,000 over the past six months. Retail trade was the one sector not to see an improvement, as payrolls declined by 44,000 in July, compared to −27,000 over the past three months and −41,000 over the past six months. The average workweek of production and nonsupervisory workers ticked up 0.1 hour to 33.1 hours, its first increase in 11 months. Additionally, the manufacturing workweek rose 0.3 hour to 39.8 hours, its largest increase since March of 2007.
Also, the unemployment rate ticked down by 0.1 percentage point to 9.4 percent in July (its first decrease since April 2008). However, the headline measure may not be characterizing the underlying employment situation completely. While the number of unemployed persons did decrease (−267,000), many more people exited the workforce (−422,000). An alternative measure of labor market stress, the employment-to-population ratio, was relatively stable in July, ticking down just 0.1 percentage point to 59.4 percent.
- Nonfarm payroll employment fell by a much less-than-expected 345,000 in May, compared to an average decline of 643,000 over the prior six months. Moreover, this was the first release that upwardly revised both prior monthly estimates since before the start of the recession, netting a gain of 82,000. Goods-producing employment fell by 225,000, with manufacturing payrolls shedding 156,000 (nearly half of the overall total loss). The manufacturing sectors experiencing the largest losses all came out of durables: motor vehicles and parts (-29,800), machinery (-26,400), and metal fabrication (-18,700). On the service side, retail trade experienced its smallest loss since June of 2008, decreasing by 17,500. Financial payrolls fell 30,000 in May, compared to a loss of 45,000 last month. Employment services have been hit hard during the recession, averaging losses of 55,500 (or nearly 2.0 percent) per month, but these decreased to just 11,200 in May. Health care employment continued to rise in May, increasing 23,500. Also, education services increased by 8,000 following three straight monthly declines. On the household side, the unemployment rate continued its rapid ascent, climbing 0.5 percentage point to 9.4 percent, as the number of unemployed persons rose by 787,000. Consensus expectations were for 9.2 percent. The employment-to-population ratio, which had been steady at 59.9 percent in April, slipped down 0.2 percentage point to 59.7 percent. Both measures of the labor market are at levels not seen since the mid-1980s.
- Nonfarm payroll employment continued to deteriorate, falling 80,000 in March, after a downwardly revised 76,000 job loss in February. Over the past three months, nonfarm payrolls have decreased by 232,000. Employment losses in goods-producing industries accelerated during the month, falling by 93,000 jobs after decreases of 82,000 and 69,000 in February and January, respectively. Construction employment fell by 51,000 jobs in March, while the manufacturing industry cut 48,000 workers from its payrolls. The service sector—bolstered by job gains in health care (+22,800), food services (+23,400), and local government (+13,000)—showed a net gain of 13,000 workers. While there were some minor losses elsewhere in the service sector, employment services were hit the hardest, trimming 41,800 workers in March.
- The ISM manufacturing index remained in contractionary territory for the second straight month, although the diffusion index rose 0.3 point to 48.6 in March. While the employment and supplier deliveries components improved during the month, the new orders and production components decreased. The new orders component fell 2.6 points to 46.5 in March, its lowest reading since 2001. The production index slipped into contractionary territory, decreasing 2.0 points to 48.7. The prices paid index jumped 8.0 points to 83.5, as manufacturers continue to face significant price pressure.
- Total private construction spending fell 0.5 percent in February, after declining in excess of 1.0 percent in three of the previous four months. Private residential construction fell 0.9 percent over the course of the month, its smallest decline since April 2007. The nonresidential side fell for the third consecutive month, albeit a meager 0.1 percent, after increasing in 28 of the previous 29 months.