Investing Curiouscatblog

Tag: employment

  • Roubini Doesn’t See Jobs Rebounding Until Late 2010

    The Worst is yet to Come: Unemployed Americans Should Hunker Down for More Job Losses by Nouriel Roubini

    Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.

    While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession.

    Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.

    So we can expect that job losses will continue until the end of 2010 at the earliest.
    …
    There’s really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers.
    …
    Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.

    Roubini has predicted negative economic results and been right for the last few years. I am uncertain about with the short term economic outlook. I can certainly imagine the slow job recovery he predicts will happen. I am hopeful we will see jobs increasing before that but the news in the last few months has not made that prospect seem more likely. And the long term outlook is getting worse with the huge government debt being added as a burden for the future economy.

    Related: Nouriel Roubini Believes Stock Market has Risen too Far, too Fast – Unemployment Rate Reached 10.2% – Why the Dollar is Falling

  • Unemployment Rate Reached 10.2%

    The unemployment rate rose from 9.8 to 10.2% in October, and nonfarm
    payroll employment continued to decline (down another 190,000 jobs), the U.S. Bureau of Labor Statistics reported today. The largest job losses over the month were in construction, manufacturing, and retail trade.

    In October, the number of unemployed persons increased by 558,000 to 15.7
    million. The unemployment rate rose to 10.2%, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 530 basis points.

    Among the major worker groups, the unemployment rates for adult men (10.7%) rose in October. The jobless rates for adult women (8.1 percent), teenagers (27.6%), African-Americans (15.7%), and Hispanics (13.1%) were little changed over the month.

    The number of long-term unemployed (those jobless for 27 weeks and over) was little changed over the month at 5.6 million. In October, 35.6% of
    unemployed persons were long-term unemployed.

    The civilian labor force participation rate was little changed over the month
    at 65.1%. The employment-population ratio continued to decline in
    October, falling to 58.5%.

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

    Related: Unemployment Rate Rises to 8.1%, Highest Level Since 1983 (March 2009) – posts on employment – USA Unemployment Rate Jumps to 9.4% – Unemployment Rate Increases to 9.7%
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  • Unemployment Rate Increases to 9.7%

    The unemployment rate in the USA continued the climb toward 10% in August in the aftermath of the credit crisis. Nonfarm payroll employment decline in August, by 216,000 more jobs, and the unemployment rate rose to 9.7%, the U.S. Bureau of Labor Statistics reported today. Since December 2007, employment has fallen by 6.9 million jobs.

    In August, the number of unemployed persons increased by 466,000 to 14.9
    million, and the unemployment rate rose to 9.7%. The unemployment rates for adult men (10.1%), whites (8.9%), and Hispanics (13.0%) rose in August. The jobless rates for adult women (7.6%), teenagers (25.5%), and blacks (15.1%) were little changed over the month.

    The civilian labor force participation rate remained at 65.5% in August. The employment-population ratio, at 59.2%, edged down over the month and has declined by 3.5 percentage points since the recession began in December 2007.

    In August, the number of persons working part time for economic reasons was little changed at 9.1 million. These individuals indicated that they were working part time because their hours had been cut back or because they were unable to find a full-time job.

    In August, manufacturing employment continued to trend downward, with a decline of 63,000. The pace of job loss has slowed throughout manufacturing in recent months. Employment in health care continued to rise in August (28,000), with gains in ambulatory care and in nursing and residential care. Health care has added 544,000 jobs since the start of the recession.

    In August, the average workweek for production and nonsupervisory
    workers on private nonfarm payrolls was unchanged at 33.1 hours.
    The manufacturing workweek and factory overtime also showed no
    change over the month (at 39.8 hours and 2.9 hours, respectively).

    Related: Unemployment Rate Drops Slightly to 9.4% – posts on employment – May 2009 Unemployment Rate Jumps to 9.4% – California Unemployment Rate Climbs to 10.5 Percent (March 2009)

  • Unemployment Rate Drops Slightly to 9.4%

    The USA unemployment rate dropped slightly to 9.4%. The economy lost 247,000 jobs which is both a sign the economy is not strong and also that it is improving (job losses from November through April were 645,000/month and 331,000/month from May through July). The job losses for May and June were both revised to show 20,000 fewer job losses each in the press release from the Bureau of Labor Statistics.

    The number of long-term unemployed (those jobless for 27 weeks or more) rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemployed persons were jobless for 27 weeks or more.

    The employment-population ratio, at 59.4%, was little changed over the month but has declined by 330 basis points since the recession began in December 2007. About 2.3 million persons were marginally attached to the labor force in July, 709,000 more than a year earlier (The data are not seasonally adjusted). These individuals, who were not in the labor force, wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

    In July, the average workweek of production and nonsupervisory workers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours. The manufacturing workweek increased by 0.3 hour to 39.8 hours. Factory overtime was unchanged at 2.9 hours.

    This news supports the increasing livelihood of a weak recovery taking hold during 2009 – which is frankly pretty amazing in my opinion. The economy could certainly have taken longer to recover. Still, more job losses and an increasing unemployment rate are likely before the end of 2009.

    Related: Another 450,000 Jobs Lost in June – USA Unemployment Rate Jumps to 9.4% (May 2009) – USA Unemployment Rate Rises to 8.1%, Highest Level Since 1983 (March 2009)
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  • U.S. Job Report Suggests that Green Shoots are Mostly Yellow Weeds

    U.S. Job Report Suggests that Green Shoots are Mostly Yellow Weeds by Nouriel Roubini

    The June employment report suggests that the alleged ‘green shoots’ are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10 percent by later this summer, around August or September, and will be closer to 10.5 percent if not 11 percent by year-end. I expect the unemployment rate is going to peak at around 11 percent at some point in 2010, well above historical standards for even severe recessions.

    It’s clear that even if the recession were to be over anytime soon – and it’s not going to be over before the end of the year – job losses are going to continue for at least another year and a half. Historically, during the last two recessions, job losses continued for at least a year and a half after the recession was over.
    …
    The latest figures – published this week – on mortgage delinquencies and foreclosures suggest a spike not only in subprime and near-prime delinquencies, but now also on prime mortgages. So the problems of the economy are significantly affecting the banking system.
    …
    So the outlook for the US and global economy remains extremely weak ahead. The recent rally in global equities, commodities and credit may soon fizzle out as an onslaught of worse- than-expected macro, earnings and financial news take a toll on this rally, which has gotten way ahead of improvement in actual macro data.

    Certainly this is not a forecast that will make people happy. I agree that the expectations for a nice quick recovery have become too optimistic. I am far from certain what lies ahead but the second half of 2009 does not look to be very strong. It is still a time to be cautious.

    Related: Jim Rogers on the Financial Market Mess (Oct 2008) – Beware of the Sucker’s Rally – USA Consumers Paying Down Debt – Investing quotations

  • Another 450,000 Jobs Lost in June

    Nonfarm payroll employment continued to decline in June (by 467,000), and the unemployment rate increased to 9.5% (with a total of 14.7 million unemployed), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job losses were widespread across the major industry sectors, with large declines occurring in manufacturing, professional and business services, and construction.

    Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.2 million, and the unemployment rate has risen by 460 basis points (from 4.9% to 9.5%). The number of long-term unemployed (those jobless for 27 weeks or more) increased by 433,000 over the month to 4.4 million. In June, 30% of unemployed persons were jobless for 27 weeks or more.

    Employment in manufacturing fell by 136,000 over the month and has declined by 1.9 million during the recession. Health care employment increased by 21,000 in June. Job gains in health care have averaged 21,000 per month thus far in 2009, down from an average of 30,000 per month during 2008.

    The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in June at 9.0 million. Since the start of the recession, the
    number of such workers has increased by 4.4 million.

    About 2.2 million persons (not seasonally adjusted) were marginally attached to the labor force in June, 618,000 more than a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the past 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

    Related: posts on employment – Unemployment Rate Increased to 8.9% – Can unemployment claims predict the end of the American recession? – The Economy is in Serious Trouble – Over 500,000 Jobs Disappeared in November 2008

  • USA Unemployment Rate Jumps to 9.4%

    Nonfarm payroll employment fell by 345,000 in May, about half the average monthly decline for the prior 6 months, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The unemployment rate continued to rise, increasing from 8.9 to 9.4 percent. Steep job losses continued in manufacturing, while declines moderated in construction and several service-providing industries.

    According to the Household Survey Data, the number of unemployed persons increased by 787,000 to 14.5 million in May, and the unemployment rate rose to 9.4 percent. Since the start of the recession in December 2007, the number of unemployed persons has risen by 7.0 million, and the unemployment rate has increased by 450 basis points.

    Unemployment rates rose in May for adult men (to 9.8%), adult women (7.5%). Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 732,000 in May to 9.5 million. This group has increased by 5.8 million since the start of the recession.

    The number of long-term unemployed (those jobless for 27 weeks or more) increased by 268,000 over the month to 3.9 million and has tripled since the start of the recession.

    The civilian labor force at the end of May, 2009 stood at 155,081,000 (at the end of April was 154,731,000) growing by 350,000, employment stood at 140,570,000 down from 141,007,000 the month before. The ranks of unemployed grew to 14,511,000 from 13,724,000.

    Related: Unemployment Rate Increased to 8.9% – USA Unemployment Rate Rises to 8.1%, Highest Level Since 1983 – Bad News on Jobs

  • Can unemployment claims predict the end of the American recession?

    Can unemployment claims predict the end of the American recession? by Robert J. Gordon

    Since economists are notoriously poor at forecasting turning points, this hope is likely to be dismissed as a will o’ the wisp. But is it wisely dismissed? Recently I have discovered a surprisingly tight historical relationship in past US recessions between the cyclical peak in new claims for unemployment insurance (measured as a four-week moving average) and the subsequent NBER trough.
    …
    To this point I have examined a single indicator to see if it is useful in predicting the end of recessions without any consideration of what is going on in the rest of the economy. Our conclusion is supported by the fact that previous false peaks occurred when new claims were at 80 to 90% of the level at the ultimate true peak. For the peak of 4 April 2009 to be false by this historical precedent, the ultimate future peak would have to be in the range of 730,000 to 800,000. As the weeks go by, such a sharp future increase in new claims looks increasingly implausible.
    …
    My reasoning leads me to conclude that the ultimate NBER trough of the current business cycle is likely to occur in May or June 2009, substantially earlier than is currently predicted by many professional forecasters.

    Interesting points. Time will tell what happens. I am skeptical this measure alone will prove to be perfect but I can believe it will be one useful measure to consider. I tend to be skeptical we are close to a strong recovery. But at what point the economy moves out of a recession is less certain. I still believe we will be lucky if we show job gains by the end of this year.

    Related: How Much Worse Can the Mortgage Crisis Get? (March 2008) – Unemployment Rate Increased to 8.9% – Manufacturing Employment Data – 1979 to 2007 – First Quarter 2009 GDP down 6.1% – Poll: 60% say Depression Likely (Oct 2008)

  • Unemployment Rate Increased to 8.9%

    Nonfarm payroll employment continued to decline in April, and the unemployment rate rose from 8.5 to 8.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Since the recession began in December 2007, 5.7 million jobs have been lost. In April, job losses were large and widespread across nearly all major private-sector industries. Overall, private-sector employment fell by 611,000.

    The number of unemployed persons increased by 563,000 to 13.7 million. Unemployment rates for April for adult men reached 9.4% and for adult women 7.1%. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 498,000 to 3.7 million over the month and has risen by 2.4 million since the start of the recession in December 2007.

    The civilian labor force participation rate rose in April to 65.8 percent, and the employment-population ratio was unchanged at 59.9 percent. The employment-population ratios for adult men and women showed little or no change over the month. However, since December 2007, the men’s ratio was down by 440 basis points, while the women’s ratio was down by 130 basis points. Since those that stop looking for work (retire or just stop actively looking) are not counted as unemployed the participation rate is a useful statistic to examine in conjunction with the unemployment rate.

    Much of the commentary on the April job losses have been that the decrease in the number of job losses from previous months shows the economy is stabilizing. While it is true losing 611,000 jobs is better than losing 700,000 jobs, losing 611,000 is still very bad. The unemployment rate increased to 8.9% and long term unemployment is increasing drastically. This is hardly good economic news. It is true that there is hope that the economy is turning around, but the employment data we have so far is hardly positive (employment data is a lagging economic indicator so it is not surprising employment data does not recover before other signs point to improvement).

    Related: Another 663,000 Jobs Lost in March in the USA – USA Unemployment Rate Rises to 8.1%, Highest Level Since 1983 – Over 500,000 Jobs Disappeared in November – What Do Unemployment Stats Mean?

  • April 2009 Federal Reserve Beige Book

    Federal Reserve Beige Book highlights for April 15th. The Beige Book documents comments received from business and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials. The book is published eight times a year.

    Manufacturing activity continued to decline in most Districts and across a wide range of industries. Several reports, however, noted that the pace of decline had slowed or that factory activity had stabilized. The Boston, Philadelphia, Richmond, Atlanta, St. Louis, Minneapolis, and San Francisco Districts cited decreases in production. The Chicago and Kansas City Districts said declines in production had slowed.
    …
    Manufacturers’ assessments of future factory activity improved marginally over the survey period as well.
    …
    Consumer spending remained generally weak. However, several Districts said sales rose slightly or declines moderated compared with the previous survey period.
    …
    Home prices continued to decline in most Districts, although a few reports noted that prices were unchanged or that the pace of decline had eased. Low mortgage rates were fueling refinancing activity. Outlooks for the housing sector were generally more optimistic than in earlier surveys, with respondents hopeful that increased buyer interest would lead to better sales.
    …
    Commercial real estate investment activity weakened further.
    …
    Labor market conditions were weak and reports of layoffs, reductions in work hours, temporary factory shutdowns, branch closures and hiring freezes remained widespread across Districts.

    Related: Central Bank Intervention Unprecedented in scale and Scope – Why do we Have a Federal Reserve Board? – Manufacturing Employment Data – 1979 to 2007 – Oil Consumption by Country