October 7, 2011

The September Employment Situation Report (100711): 9.1% Unemployment, 58K Non-Verizon SA Jobs Added; SA Jobs Trending Downward; Sept. Weaker Than August

Filed under: Economy,Taxes & Government — Tom @ 8:55 am

From the Bureau of Labor Statistics — a triple-digit month but which, after necessary adjustments, at least in terms of seasonally adjusted data, is a bit of a downshift:

Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August.

Household Survey Data

The number of unemployed persons, at 14.0 million, was essentially unchanged in September, and the unemployment rate was 9.1 percent. Since April, the rate has held in a narrow range from 9.0 to 9.2 percent.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose to 9.3 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

Establishment Survey Data

Total nonfarm payroll employment edged up by 103,000 in September. Since April, payroll employment has increased by an average of 72,000 per month, compared with an average of 161,000 for the prior 7 months. In September, job gains occurred in professional and business services, health care, and construction. Government employment continued to trend down.

… Employment in information was up by 34,000 over the month due to the return of about 45,000 telecommunications workers to payrolls after an August strike.

The change in total nonfarm payroll employment for July was revised from +85,000 to +127,000, and the change for August was revised from 0 to +57,000.

Well, the prior-month revisions are good to see, but that leaves us in a less than desirable deceleration mode in the land of seasonal adjustment:

  • July, +127K
  • August, +57K, which would have been +102K if the 45K (net seasonal effect) Verizon workers hadn’t gone on strike.
  • September, +103K, which would have been +58K if the 45K Verizon workers hadn’t gone on strike and then returned to work.

I’ll look at the not seasonally adjusted (NSA) news to find out how things really are on the ground shortly.

UPDATE: Here’s what the NSA numbers look like after making Verizon strike-related adjustments for the purpose of seeing the bigger picture (adding back 45K to both charts in August, subtracting 45K from both in September):

NSAandSAjobsMayToSept2011

What we generally see are months that don’t look awful, but still mostly trail in the historical context of the early and middle parts of the last decade. It’s also clear (pending revisions, of course) that September was not as strong as August, especially on an overall basis.

This is supposed to be a recovery from the loss of millions of jobs, and they’re just not coming back like they should. It needs to, and should be, running rings around the data of the previous decade because there’s so much unused potential. At this rate, millions people are going to remain unemployed for a long, long time.

UPDATE 2: Jobs certainly aren’t coming back like they did during the 1980s recovery. That comparison is coming. … Here it is:

ReaganVsObama9QtrsAt100711

Overall, the post-recession economy under Reagan added over 6.9 million jobs in the nine quarters after the 1980s recession ended — over eight times as many as have been added under Obama since the recession officially ended in June 2009. Adjusted for workforce size, the economy performed about 12-1/2 times better at adding jobs.

Focusing on the private sector, the post-recession economy under Reagan added over 6.5 million jobs in the same nine quarters — over 4.6 times as many as have been added under Obama in his analogous nine quarters. Adjusted for workforce size, the economy performed about seven times better at adding private-sector jobs.

This is why Keynesianism as a credible economic theory has collapsed.

UPDATE, 11:45 a.m.: Made adjustments to excluding-Verizon SA data to correct a misunderstanding of BLS’s +34K change in info processing jobs. I thought that was the SA Verizon effect, when is was the overall sector change. The conclusions don’t change.

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6 Comments

  1. If you want a bigger damnation of Obama, use the CPS numbers instead of the CES ones. While Reagan saw the addition of 7,008,000 jobs from October 1982 to December 1984, Obama saw the addition of just 231,000 jobs from July 2009 to September 2011.

    Worse, while it took Reagan only 5 months to see the number of jobs get above “end-of-recession levels” and keep growing, it took Obama 19 months to see the number of jobs get above “end-of-recession” levels, and then it promptly fell back below that point until this month.

    Oh, and Reagan topped the pre-1982 recession high of 101,056,000 jobs (set April 1981) in July 1983. Obama’s still over 6 million jobs short of November 2007′s 146,584,000 jobs, not to mention the 142,201,000 jobs that were around the month he entered office.

    Comment by steveegg — October 7, 2011 @ 12:24 pm

  2. I fouled up the math just slightly; I subtracted from the month after each recession ended instead of the month each recession ended. That changes things slightly:

    - Reagan saw CPS job growth of 6,719,000 in the first 27 months after the 1981-1982 recession. March 1983 (6 months after the end instead of 5) was still the first month after the end to be positive relative to the end.
    - Obama saw CPS job growth of 47,000 jobs in the first 27 months after the “end” of the 2008-2009 recession. More notably, this month is the first to have more jobs according to the CPS survey than June 2009.

    I really need to take off on Fridays :-)

    BizzyBlog response: Yeah, I’d like to see more reports come out on Thursday too.

    Comment by steveegg — October 7, 2011 @ 12:54 pm

  3. Great point. I looked at the contrast between the two sources a month ago based on July, and it was an eye-popper. Since the end of the recession through July CPS showed -700K, CES showed +700K.

    That 1.4 mil narrowing of the difference between the two reports has significantly narrowed. CPS is now at +47K since the recession ended, a huge pickup in the past two months. It would be nice to think that this means a lot of percolating start-ups and self-employeds that CES doesn’t pick up. CES is now at +841K.

    The Reagan contrast is interesting because as you note, the CPS number increased by more, meaning that start-up/SE activity was consistently strong.

    Comment by TBlumer — October 7, 2011 @ 12:55 pm

  4. The Wall Street Journal did a full-court press on this today, including both a front page story (behind the online paywall, though the dead-tree above-the-fold graphic isn’t behind it) and an editorial comparing the third Septembers of Reagan and Obama.

    Comment by steveegg — October 8, 2011 @ 8:57 am

  5. [...] Tom Blumer has been noting the failure of the current “recovery” versus the recovery from the 1981-1982 recession for some time. Before I take you to the main event, I do encourage you to look at the latest from Tom; he also explains how the “103,000 jobs added in September” isn’t quite all in September. [...]

    Pingback by No Runny Eggs » Blog Archive » Saturday Hot Read – WSJ’s “103,000 vs. 1.1 million” — October 8, 2011 @ 9:30 am

  6. [...] September 2011, the economy, pending revisions, added 103,000 seasonally adjusted jobs (well, 58,000 after subtracting out Verizon workers who walked off the job in August and returned last month). In [...]

    Pingback by BizzyBlog — October 8, 2011 @ 9:34 am

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