December 2, 2011

The November Employment Situation (120211); +120K Jobs (+192K with Prior Mos.), Unemployment at 8.6%

Filed under: Economy,Taxes & Government — Tom @ 8:22 am

ReutersEmplymentReportPredix1111Econ Update:

  • ADP’s jobs report came in with 206,000 private sector jobs added in November, with October revised up from 110K to 130K. That’s one of the better reports this year, though if I recall correctly, the last really strong ADP report was followed by a pretty weak one from Uncle Sam.
  • Car sales in November were strong, especially at Chrysler and Nissan, which actually outsold Honda, which is struggling with supply issues from Thailand. General Motors’ November market share was 18.1%, which I think is its lowest in a very long time. The other stars compared to November 2010 were Kia (+39%), Mercedes (+46%), and Volkswagen (+41%).
  • The Institute for Supply Management’s Manufacturing Index came in at 52.7%, up from 50.8% during the previous month, though at the same time nine industries reported contraction vs. eight reporting expansion.
  • Yesterday, weekly initial unemployment claims jumped back to over 400,000. It marked the fourth return to 400K+ following a dip below that level in the past nine months. Given the possibility that employers might be running out of people to let go, each return to 400K+ could really be indicating a “progressively” (pun intended) worsening situation.

Predictions — The Reuters medians, as pictured at right, are plenty for now.

The Not Seasonally Adjusted Benchmarks:

Readers here know that I like to loo at the raw (i.e., not seasonally adjusted) figures to get an idea of what would represent genuine job-market progress, regardless of what the seasonally adjusted figures, which have been rendered much less useful than they normally are by the POR (Pelosi-Obama-Reid) Economy of the past 3-1/2 years.

So here’s the situation:

SAandNSAjobsJan2001toOct2011

November’s overall raw job adds need to be at least 450,000, and the private sector really needs to be at least 350,000, regardless of what the seasonally adjusted numbers are. I think there’s a decent chance that the benchmarks just ID’d will be met.

Well see if that happens here at 8:30 a.m.

Waiting for a page load … (Zero Hedge: “NFP Prints At 120K, Below Expectations Of 125K, Unemployment Rate Drops To 8.6%”; immediate reax is that the “give-up” factor must be really depressing)

HERE WE GO (and the hunch is at least half-right):

The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. Government employment continued to trend down.

Household Survey Data

In November, the unemployment rate declined by 0.4 percentage point to 8.6 percent. From April through October, the rate held in a narrow range from 9.0 to 9.2 percent. The number of unemployed persons, at 13.3 million, was down by 594,000 in November. The labor force, which is the sum of the unemployed and employed, was down by a little more than half that amount.

The civilian labor force participation rate declined by 0.2 percentage point to 64.0 percent. The employment-population ratio, at 58.5 percent, changed little.

Establishment Survey Data

Total nonfarm payroll employment increased by 120,000 in November, in line with the average gain for the prior 12 months (+131,000). The private sector added 140,000 jobs, as employment rose in a number of service-providing industries. Government employment continued to trend down. (See table B-1.)

… The change in total nonfarm payroll employment for September was revised from +158,000 to +210,000, and the change for October was revised from +80,000 to +100,000.

So 192,000 more people were estimated to be working in November (120K plus prior-month upward revisions of 72K) than in October. That part’s not bad; about 20 rinse-and-repeats of that is about what’s needed. The fact that this occurred in conjunction with the Household Survey’s unemployment rate drop is not comforting. The job pickup needed to bring the rate down that far should be much greater … unless people who could be working are leaving the workforce and not even trying to find work.

More later when the numbers are available.

UPDATE: Here’s what the past three months of not seasonally adjusted numbers look like with prior-month revisions:

- September overall: Benchmark, none; Actual, +688K
- October overall: Benchmark, +1,000K; Actual, +874K
- November overall: Benchmark, +450K; Actual, +339K

- September private: Benchmark, none; Actual, -293K
- October private: Benchmark, +450K; Actual, +348K
- November private: Benchmark, +350K; Actual, +234K

The September numbers, though not benchmarked, are in historical context the best of the bunch. October and November are at least somewhat close to the benchmarks, but not close enough considering how much slack there is in the economy.

We shouldn’t forget that seasonally adjusted private sector employment of 109.7 million is still down by over 6 million from its January 2008 peak of 115.6 million. That’s a lot of ground to recover, even before considering population growth, which would probably add another 2-3 million to the true required catch-up number.

UPDATE 2: At Bloomberg, appropriately teased by Drudge — “The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.”

UPDATE 3: BLS site isn’t responding right now. Will revisit this later. Nah, this rundown from Zero Hedge (numbered by me) is pretty much all you need to know –

Here are the four most important data points and charts from today’s job report:

  1. The civilian labor force declined from 154,198 to 153,883, a 315K decline despite the civilian non-institutional population increased (as expected) from 240,269 to 240,441: always the easiest way to push down the unemployment rate.
  2. Percentage wise this was a drop from 64.2% to 64.0%: the lowest since back in 1983. Naturally, this would mean that the people not part of the labor force rose, and indeed they did by 487,000 to a record 86,558 from 86,071.
  3. This also means that more people are looking for a job: and indeed, the number of “Persons who want a job now” rose by 192K to a record 6.595 million. (Note: “Want a job now” is NOT the same as “looking for a job.” The “want a job now” number really reflects drop-outs who would like to start looking for work if they thought there was a decent chance of finding any. — Ed.)
  4. And lastly, confirming the behind the scenes disaster of the US jobless picture, the average duration of unemployment rose to a new record 40.9 weeks from 39.4 weeks previously.

And that is your “improving” jobless picture in a nutshell.

UPDATE 4: Meant to look at Birth/Death. At least in November, it wasn’t out of line (29,000 net job “deaths”).

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5 Comments

  1. [...] are a bit better on the jobs added front. Tom Blumer noted that the seasonally-adjusted jobs created numbers were revised upwards for both September [...]

    Pingback by November unemployment rate down to 8.6%, 120K jobs added « Hot Air — December 2, 2011 @ 10:08 am

  2. How many of these jobs were Christmas holiday jobs in stores? A lot of hiring for these jobs took place in November. Most of these people will get laid off in January, and they will be looking for work again.

    Comment by toledojim — December 3, 2011 @ 12:14 pm

  3. #2, Seasonal adjustment is supposed to smooth out that kind of thing, which is why I look at NSA. The NSA of 234K is less than I think it should have been in a genuinely recovering job market. The retail hiring is interesting because the initial word was that a lot of retailers were going to try to get by with existing staff. Apparently not.

    Comment by TBlumer — December 3, 2011 @ 1:24 pm

  4. #2, the information can be found on Table 8: http://www.bls.gov/webapps/legacy/cpsatab8.htm 413,000 part timers were hired from October to November, subtract from the 450,000 total figure and you get 37,000 Full time jobs created – an economic disaster where at min you must have 350,000 PERMANENT FULL TIME jobs per month created to employ new workers due to the population increase!

    For context lets look at November 2007 which is the highest before the drop off in employment occurred.

    NSA Non Ag November 2007 2011

    Total Employ 135,705,000 130,261,000
    Part Econ 4,301,000 8,161,000
    Part Non Econ 20,349,000 18,950,000

    subtracting out
    Full Time 111,055,000 103,150,000 7,905,000 lost jobs

    Comment by dscott — December 4, 2011 @ 9:19 am

  5. #4, great catch.

    Comment by TBlumer — December 4, 2011 @ 9:56 am

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