May 04, 2012 at 10:31 am
First impressions here, including anti-austerity rant. A few more observations:
–One of CBPP’s Unemployment Insurance experts, Hannah Shaw, tells me the following: since the beginning of the year 17 states with unemployment rates above 6.5% have triggered off of EB (extended benefits: extra weeks of UI in high unemployment states—learn about it here), 8 of those states have unemployment rates of 8% or higher. It’s possible that some of these folks leave the job market after their benefits run out and that could be playing a role in the low and stagnant participation rate.
–Hourly and weekly earnings are growing more slowly: 1.8% over the past year for average hourly earnings and 2.1% for weekly earnings. The most recent inflation reading is 2.7%, Mar11-Mar12, meaning paychecks are not going as far as they were a year ago. Nominal hourly earnings have been hovering around 2% for a while, but increased hours of work were goosing weekly earnings for a while, which were up around 3% a year ago. That’s fading; that’s bad for family budgets and for a macro-economy that’s 70% consumption.
–I always like to take a look at the diffusion index in the monthly jobs report. It’s a measure of the percent of private sector industries adding jobs, so it provides a quick look at the question of how broad-based hiring has been. Last month, about 57% of firms added jobs, compared to 65% last month, 70% in January, and less than 20% in the heart of the Great Recession. So, a lot more industries are expanding than in the worst of times, but there’s been a pretty broad pullback of late.
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