the September report
The Bureau of Labor Statistics of the Department of Labor issued its monthly Employment Situation on Friday, October 8th. The bottom line: a loss of 18,000 jobs during the month, excluding the end of employment for another 77,000 temporary government census workers. September will have been the last month where census workers will be a significant factor. Of the peak of 564,000 temporary census employees in May, only 6,000 now remain on the federal payroll.
The BLS also revised down the employment figures from the past two months by 15,000 jobs.
To me, the report has three important aspects:
–the service sector, the nation’s largest, continues to chug along, adding new jobs at an 80,000+ per month rate (86,000 in September),
–the goods producing sector, manufacturing and construction, has stopped hiring new employees. The sore point seems to be non-residential construction, which shouldn’t be much of a surprise, and
–in a new development, local governments have begun to deal with budget deficits by laying off workers. Nationally, teachers comprise 55% of the local government workforce. They made up two-thirds of the 76,000 local government layoffs during September.
The overall picture that the September report presents is one of an economy more or less in idle from an employment perspective. Private sector job gains are below the 100,000 level that represents absorption of new entrants into the workforce. While Federal and state worker levels are holding steady, cities and towns are being forced to shrink their payrolls to adjust to lower levels of tax revenue being received. It’s not clear how long this process will take.
more information from the household survey
The information above comes from what the government calls the “establishment” survey, that is, data it obtains from employers. The BLS also does a “household” survey, which consists of interviews with employees. The employee sample is smaller than the employer sample, so the margin of error in the former is larger than in the latter.
involuntary part-time work rising
One of the questions the BLS asks employees is whether, if they are working part-time, they are doing so voluntarily or not. They also try to find out whether “involuntary” means their hours have been cut back by their employer or that the respondent wants full-time work but can’t find it.
The involuntary part-time worker group has jumped by 943,000 over the part two months, to 9,472,000. Of that increase, about two-thirds of the newly part-time workers said their employers cut back their hours.
This is a potentially troubling development. How troubling isn’t yet clear, since most of the rise comes from a seasonal adjustment of the raw data by government statisticians. The idea is that workers who have their hours cut back during the summer normally have them restored in September. That hasn’t happened so far this year. At the very least, though, this is another potential weak point for the US economy.
Every economic recovery is marked by an initial surge in activity as consumers “catch up” on spending deferred during the bad times. After that, the economy settles back to “normal” growth. In the case of the US, continuing structural adjustment–hopefully municipalities will prove to be the final area to be pruning jobs–means that for now “normal” growth isn’t strong enough to add jobs.
No wonder the Fed it stalking about additional easing measures to stimulate job expansion.
Whether that will work or not is another question. The day before the Employment Situation, BLS released August data in its series of job vacancy reports. (See my post: FRB can’t change construction workers into manufacturing workers.) This latest JOLT report shows that employers continue to have 3.2 million unfilled job openings, 800,000 more than a year ago, but can’t find suitable workers to fill them.