The November Employment Situation Report (120409)

Run-up: ADP reported 169,000 jobs lost in the private sector during November in the national employment report it released Wednesday.

• This quickie note at a local Fox station predicts the unemployment rate will be unchanged at 10.2% and that 130,000 seasonally adjusted jobs will be lost.
• That same prediction is in this AP report from yesterday on the worsening employment situation in many metro areas.
• Forbes columnist Joshua Zumbrun, claiming that the “turning point is near,” has the rate staying the same and 125,000 lost.

The report comes out here at 8:30 a.m.

Here it is:

The unemployment rate edged down to 10.0 percent in November, and nonfarm payroll employment was essentially unchanged (-11,000), the U.S. Bureau of Labor Statistics reported today. In the prior 3 months, payroll job losses had averaged 135,000 a month. In November, employment fell in construction, manufacturing, and information, while temporary help services and health care added jobs.

The Forbes guy may be right.

If you look at the following graphic which has the seasonally adjusted and raw rates, it looks like the rate may indeed stay at 10% or even decline slightly in the coming months:

The actual on-the-ground rate went up from October to November in each of the past five years, but went down this time. That’s a pretty good thing.

One takeaway from this is that BLS probably overshot reality a bit in October when it showed a 0.4% increase in the unemployment rate, but that the rate might actually be stabilizing and headed slightly downward.

The open question is whether the rate dropped because fewer people are working and/or looking for work according to the Household Survey. I’ll be back with that shortly.

UPDATE: The workforce situation is a mixed bag –

The bad news is that the civilian labor force continues to shrink while the number of people who currently want a job continues to increase. The good news is that more people were working in November than in October, and fewer were unemployed.

“Luckily” for the calculation of the unemployment rate, a lot fewer people are participating in the workforce. If the participation rate had been the same as a year ago (65.8%), 1.9 million more people would be showing as unemployed (65.8% times 236.743 million is 155.777 million; 155.777 million minus the current civilian labor force of 153.877 million is 1.9 million right on the button), and the unemployment rate would now be 11.1% (17.275 million unemployed because of the additional 1.9 million unemployed in the labor force divided by 155.777 million) instead of 10.0%.

I would suggest that it’s at least as important for long-term economic growth for the administration to figure out a way to get as many of those who have withdrawn from the workforce back into it as possible as it is to help those who are currently looking. Doing that would involve lifting the pervasive, government-induced uncertainty that hangs over the entire economy. It would not involve increasing transfer payments beyond what is needed, as has clearly been done in the Food Stamp program.

Here’s an obvious idea, given that so many have withdrawn from the workforce by retiring early for the purpose of collecting Social Security benefits: Repeal the punitive Social Security earnings penalty.