December Employment Situation Summary (010612); +200K Jobs SA, Unemployment Rate 8.5%, With Quirks and Qualifiers
Econ Catch-up — Yesterday’s reports:
- ISM Non Manufacturing — slightly faster expansion.
- Initial unemployment claims — 372,000, down 15,000 from previous week, which was revised up by 6,000.
- ADP private-sector employment — 325,000 jobs added, best in a year (“The increase in December was the largest monthly gain since last December 2010″).
- Challenger Gray mass layoffs — 41,785, considered a pretty decent result.
Other Econ Catch-up:
- ISM Manufacturing — Improved by 1.2% to 53.9%, indicating faster expansion.
- Auto sales — a relatively strong December, up 8.7% from December 2010 (10.3% for the year, more in light trucks than in cars). GM, which I thought was predicted to be up over 30% (Update: That was Dec. vs. Nov., and was an accurate prediction), came in at +5%. Ford was up 10%. Chrysler was up 37%. For the year: GM, +13%; Ford, +11%; Chrysler, +26%. Despite the underhanded nature of the government’s handling of the bankruptcy, you’ve got to hand it to CEO Marchionne and his crew (the guess here is that he kept Team Obama at a distance). Others with stellar full-year results: Nissan, +15%; Hyundai, +20%; Mitsubishi, +42%; Kia, +36%; Mercedes, +16%; VW, +26%.
Predictions for today:
- Business Insider’s email: +155,000 overall jobs added, with unemployment rate going up to 8.7%.
- Same at Bloomberg.
- Associated Press — +150,000 overall jobs added, unemployment rate to 8.7%.
Not seasonally adjusted benchmarks:
The jobs change number on the ground (i.e., NOT seasonally adjusted, or NSA) needs to be 100,000 or fewer. NSA Private-sector job losses need to be 50,000 or fewer. These numbers are important than whatever the seasonaly adjusted (SA) numbers end up being, because the irregularities of the past 3-1/2 years render normal concepts of seasonality almost useless.
My instinct is that both benchmarks will be met.
The report will be here at 8:30.
HERE IT IS — in Month 30 after the end of the recession, it seems to be a relatively good report for this “recovery” but nowhere near Reaganesque-level good news (pending a look at whether it’s “Going Galt”-aided or not and at what the NSA numbers are):
Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.
Household Survey Data
Both the number of unemployed persons (13.1 million) and the unemployment rate (8.5 percent) continued to trend down in December. The unemployment rate has declined by 0.6 percentage point since August.
… The civilian labor force participation rate (64.0 percent) and the employment-population ratio (58.5 percent) were both unchanged over the month.
Establishment Survey Data
Total nonfarm payroll employment increased by 200,000 in December. Over the past 12 months, nonfarm payroll employment has risen by 1.6 million. Employment in the private sector rose by 212,000 in December and by 1.9 million over the year. Government employment changed little over the month but fell by 280,000 over the year.
The change in total nonfarm payroll employment for October was revised from +100,000 to +112,000, and the change for November was revised from +120,000 to +100,000.
So the seasonally adjusted change including prior revisions is +192K (200K today plus 12K from October minus 20K from November).
UPDATE: The NSA numbers are disappointing, and the SA numbers came out wacky in Team Obama’s favor –
- Overall, December job losses on the ground were 219,000. That’s 119,000 below where I believe it needed to be (and below where anyone looking at the chart before the numbers came out would have hoped for). Note that the overall NSA number in 2006 was -110K, almost exactly half of today’s loss. It led to a lower SA number (+180K) than we saw today (+200K).
- In the private sector, jobs losses on the ground of 80,000 were much closer to the benchmark of -50,000, but still didn’t meet or beat it. Today’s raw number is pretty close to 2005′s -94K, yet today’s result led to +212K seasonally adjusted vs. 138,000 that year.
The Birth/Death numbers hardly had an impact in December.
As I said earlier, the past 3-1/2 years have thrown seasonality into total turmoil. This month, Team Obama caught a huge break. Ordinarily in these things, what goes around will come around. Update: As if by magic — “Morgan Stanley Warns 42,000 “Jobs” Bogus Due To Seasonal Quirk.” That’s only about half of the overall discrepancies.
UPDATE 2: From the Household Survey (all seasonally adjusted) — Compared to a year ago, 1.4 million more people are not in the labor force, 1.7 million more Americans are working, and the civilian labor force has increased by less than 300,000 (and has decreased by 843,000 since the recession ended 2-1/2 years ago). The unemployment rate has come down, but it’s not the sign of improvement you would ordinarily expect it to be.
In the same 30 months after September 1982, the last full quarter of the Reagan-era recession, the civilian workforce increased by 4.6 million.
Yeah, the “Going Galt” thing the left loves to ridicule is for real.
UPDATE 3: Good new, bad news — The good news is that the number of people employed full-time (seasonally adjusted) has increased by almost 1.3 million in the past three months, and by 1.8 million since that number hit its trough six months ago.
The bad news is that the number of full-time workers is still over 8 million fewer than was the case in November 2007, and only 1 million more (about 0.8% higher) than when the recession ended. The Reagan-era recession’s-end comparable? Up by almost 7.5 million (about 9%).
UPDATE 4, Jan. 11: Late on this, because I didn’t see a trackback and haven’t yet seen a Google Alert hit, but Jay Cost at the Weekly Standard referenced this post on January 10.