August 2013 Workplace Economy
 

August 2013 Workplace Economy

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  • Source: BLS
  • Source: WhiteHouse.govThe Employment Situation in AugustBy: Jason FurmanOver the last four years, we’ve cleared away the rubble from the financial crisis and begun to lay a new foundation for stronger, more durable economic growth. With continued solid job gains, today’s employment report is another sign of progress, but we must continue to pursue policies that move our economy forward and restore middle class security. Five Key Points in Today’s Report from the Bureau of Labor Statistics1. Private sector employment has risen for 42 consecutive months, with businesses adding a total of 7.5 million jobs over that period. Today we learned that total non-farm payroll employment rose by 169,000 in August, with the private sector accounting for 152,000 of that gain. Private sector job growth was revised down for June (to 194,000) and July (to 127,000), so that over the past three months, private sector employment has risen by an average of 158,000 per month. The monthly change is shown below. 2. The overall unemployment rate ticked down 0.1 percentage point to 7.3 percent, the lowest since December 2008, with long-term unemployment remaining elevated. Although the unemployment rate remains too high, it has been trending down steadily since late 2009. The lingering elevation in the unemployment rate primarily reflects a large number of long-term unemployed (those unemployed for more than 27 weeks), while the share of the labor force that has been unemployed for less than 27 weeks has mostly returned to its average during the 2001-07 expansion period. That's why the administration continues to push for measures to spur job creation now and put the long term unemployed back to work.3. The economy has been consistently adding jobs at a pace of more than 2 million per year. Over the twelve months ending August 2013, total non-farm payroll employment rose by 2.2 million, similar to the gain in the year-earlier period. While the month-to-month figures can be volatile, the year-over-year changes indicate that the recovery has been durable in the face of several headwinds that have emerged in recent years. The separate household survey is more volatile month-to-month, but over a longer period, it tells the same story. When adjusted by the Bureau of Labor Statistics to be comparable to the concept of employment used in the payroll measure, household employment has risen by 2.4 million over the twelve months ending August 2013. 4. CEA estimates that if state and local government employment had held steady during the recovery, the unemployment rate would currently be below 7 percent. Unlike previous recoveries in which state and local government employment- like teachers, fire fighters and first responders-- expanded, public payrolls have declined in the current recovery (see chart). During the current 42-month consecutive streak of increasing private sector employment, state and local government employment has fallen by 507,000, including the loss of 267,000 education positions. 5. The number of persons working part-time for involuntary “economic reasons” has fallen by 152,000 over the past twelve months. Budget cuts due to sequestration led to an increase of 77,000 in the number of federal government employees at work part-time for economic reasons, so the number of persons part-time for economic reasons in private sector and non-federal government positions is down by an even larger 229,000 (see chart, based on not seasonally adjusted data). Measures of part-time employment can be volatile month-to-month, but the seasonally-adjusted 334,000 drop in persons working part-time for economic reasons in August almost entirely reversed the increase over the preceding two months. As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available. Nevertheless, incoming economic data broadly suggest that the recovery continues to make progress. It is therefore essential that policymakers avoid “self-inflicted wounds” that could derail the recovery and stay focused on policies that will help sustain and boost the pace of job creation.
  • Source: Economix.Blogs.NYTimes.com‘The Great Shift’: Americans Not WorkingBy: David LeonhardtLooking at these two charts together is a quick way to become demoralized about the American economy:Yes, the unemployment rate has fallen. But almost the entire reason it has fallen is the drop in the number of people in the labor force — either working or actively looking. As Binyamin Appelbaum has noted, the share of adult Americans with jobs is essentially unchanged over the last three years.In a brief new report from Express Employment Professionals, a staffing firm, the company’s chief executive, Bob Funk, refers to the problem as “the great shift.” This shift long predates the recent financial crisis, too. The labor force participation rate peaked more than a decade ago. If the decline stemmed largely from an aging work force, it would be much less worrisome. But the initial wave of baby-boomer retirements plays only a small role in the drop; the labor force participation rate has fallen almost as sharply for people aged 25 to 54 as it has for the overall adult population. As the report notes, economists are not entirely sure what has caused the shift. One factor seems to be the so-called skills gap — the slow growth in educational attainment in recent decades, even as the economy has become more technologically advanced. A second factor is most likely the weak economic growth of the past 13 years: the 2000-1 dot-com bust, the mediocre expansion that followed, the financial crisis that began in 2007 and the disappointing recovery of the last few years.Another cause may be the rise in the number of workers on disability. The report cites a study by the Federal Reserve Bank of San Francisco to argue that disability is helping cause the decline in work. That’s probably right, although it is worth remembering that the growth of the ranks of the disabled may be more of an effect of the jobs slump than a cause.Either way, the decline in labor force participation almost certainly receives too little attention. Each month, small changes in the unemployment rate receive great scrutiny. We often overlook just how flawed a measure of the job market that rate has become over the last 13 years.

August 2013 Workplace Economy August 2013 Workplace Economy Presentation Transcript

  • U.S. Economic Data As of September 2013 Reflective of the Bureau of Labor Statistics’ “The Employment Situation – August 2013”
  • As expected, job growth was reported in August JOBS GAINED IN AUGUST UNEMPLOYMENT RATE LOWEST UNEMPLOYMENT RATE SINCE 169,000 7.3% December 2008
  • The national unemployment rate Source: BLS
  • 169,000 new jobs were added in August Source: CNNMoney.com
  • ere United States jobless claims Source: DismalScientist.com
  • Sector changes observed in August Source: BLS
  • Education remained a job search differentiator Source: BLS * National unemployment average, according to education levels 7.3% 3.5% 6.1% 7.6% 11.3% National average College educated Some college High school diploma Less than high school
  • A snapshot of metropolitan unemployment figures Source: BLS
  • Year-over-year change in part-time workers for economic reasons (August 2012 – August 2013) Source: WhiteHouse.gov
  • Labor force participation rate (2007 – 2013) Source: Economix.Blogs.NYTimes.com Sources: BLS, Express Employment Professionals
  • The national unemployment rate declined for the second straight month in August, inching down to 7.3 percent, the lowest measurement recorded since December 2008. In all, 169,000 new jobs were created. Opportunities • 152,000 new private sector jobs were added to the national economy in August, the 42nd consecutive month of sector job growth. • As expected, hiring once again rose within the United States’ leisure and hospitality, professional and business services, and retail trade sectors, increasing by 27,000, 23,000, and 44,000 jobs, respectively. • Employment also upturned within the nation’s government, healthcare, and manufacturing sectors, rising by 17,000, 32,700, and 14,000, respectively. Weaknesses • In the meantime, financial activities and information employment contracted last month, declining by 5,000 and 18,000, respectively. • Although public sector hiring augmented considerably in August, state government employment continued to decrease, as the sector reported a net loss of 3,000 jobs. In Summary