Jobs Report: Some Details

June 7th, 2013 at 9:51 am

[See First Impressions here.]

As noted, payrolls grew by 175,000 last month, and the jobless rate ticked up slightly, driven may more people joining the labor force.  A few facts of the case:

–Revisions to the prior two months were slightly negative: payroll growth was revised up 4,000 in March and down 16,000 in April for a sum of -12,000 in those two months.

–The average pace of job growth over the past three months–155,000–is slower than that over the prior three months: 255,000.  This could be evidence of the impact of increasing fiscal headwinds on job creation.

–Manufacturing has been on a bit of a slide (see figure) in the past few months.  After rising consistently since early 2010, it has lost jobs for the past three months, down 21,000 since February.  The growth of our trade deficit in recent months surely hasn’t helped here.

manuf1

Source: BLS

–In what looks like a sequester effect, the federal government has been shedding jobs at a sharp clip, down 45,000 in the past three months (see figure).

fed1

Source: BLS

–Hourly earnings before inflation are up 2% over the past year, a subdued growth rate as we’d expect given consistently elevated unemployment.  But since consumer inflation has been running at only about 1%, even this moderate pace of wage growth yields real gains.

–The percent of the long-term unemployed (jobless for at least six months) has been slowly coming down, and at 37.3% last month was the lowest its been since late 2009.  That is, however, still a very highly elevated share for this variable.

–That stuff I was saying yesterday about forecasts of the payroll number being a crap shoot.  Ignore it, as I almost nailed the number.  I predicted 178K total, and 180K private–the actual numbers were 175K and 178K.  So put me down as a social science genius at least until the revisions.   And kudos to Jan Hatzius at GS who predicted 175,000.  Jan, have a beer tonight on me (better yet, just tell the bartender you nailed the payroll number–I’m sure that will do it).

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2 comments in reply to "Jobs Report: Some Details"

  1. smith says:

    Ignoring for a moment those discouraged and/or not looking, the unemployment rate of 7.6 represents 3.5 to 4% over full employment. Due to job changing and ordinary economic activity 3.5 or 4% is considered full employment (right?), though that’s debatable since the rate for college educated is currently 3.6% http://www.bls.gov/news.release/empsit.t04.htm and no one is throwing money at them complaining of a labor shortage (just ask recent graduates). My point is 3.5% or 4% is 1 in 33 or 1 in 25 people. 32 out of 33 or 24 out of 25 are still working. Working people care about even 7% unemployment in a recession (shrinking economy) because they could be next. Not the case presently. Plus consider that people running the country are mostly in the 3.5% unemployment college educated group, so maybe 1 in a 100 are stuck, 1 in a hundred took a job out of their field. If you want people to care, link unemployment to wage increases for the other 92.5%. Fortunately for those hogging all the productivity increases, the U.S. standard of living is pretty darn high even without higher wages, and everyone has been to conditioned not to ask for more. Thus no pressure to help. Education is not the answer since 2/3 of all projected job openings don’t require college.


  2. Neildsmith says:

    All the economics bloggers are great at posting charts and graphs but do little to put unemployment in context. There was a NYTimes article the other day saying that “In essence, the job market has normalized for the short-term unemployed. But as the duration of joblessness grows, so does the divergence from prerecession trends of re-employment.”

    http://economix.blogs.nytimes.com/2013/06/07/long-term-jobless-still-a-bleak-picture/?ref=business

    The lack of understanding about why this is has left us all without any sort of policy to combat the problem. Krugman et al just talk about spending more as if it will magically solve this intractable unemployment problem, but that just doesn’t seem credible.

    Perhaps I missed it. From my working person’s perspective (engineer) there are plenty of jobs for people like me. It’s hard to argue that the economy is terrible when all our experience tells us otherwise. Who, exactly, are the long term unemployed and how can we help them?


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