Jobs increase, unemployment lowest in 4 years

[russ_watters]

Some analysis:

The civilian labor force rose by 578,000 to 155.6 million in October, and the labor
force participation rate edged up to 63.8 percent. Total employment rose by 410,000
over the month. The employment-population ratio was essentially unchanged at 58.8
percent, following an increase of 0.4 percentage point in September. (See table A-1.)

Based on what I said before, I had expected the total employment to drop to offset the unusually large increase last month. Instead, it had another big gain, but the labor force participation rate had a bigger gain, which is why the unemployment rate went up. It appears to me that these two numbers are chasing each other, going up and down together as part of the normal statistical fluctuations due to sampling. Still, there was a significant component that did correct a blip from last month:

The number of persons employed part time for economic reasons (sometimes referred to
as involuntary part-time workers) fell by 269,000 to 8.3 million in October, partially
offsetting an increase of 582,000 in September.

Not quite where I thought the blip was, but it is the concept I was discussing.
http://www.bls.gov/news.release/empsit.nr0.htm

For the political implications of this: [crickets chirp] Last month, the surprising drop was newsworthy to post in PF, by an Obama supporter. This month, a Romney supporter (me) brings it back. I had thought that last month's report would be the last before the election, but it was still significant for passing the round-number of 8%. This month's numbers show a continuing decent but unspectacular recovery (recall again that about 1250,000 is the zero-point for job creation). Improvements are good, but this improvement is much too slow to fully recover in one economic cycle. It is a touch slower than the so-called "jobless recover" that Bush endured, even with Bush getting a second hit to the economy due to 9/11: http://www.heritage.org/research/re...report-jobs-added-but-unemployment-rate-rises

 

[SixNein]

Some analysis:
Based on what I said before, I had expected the total employment to drop to offset the unusually large increase last month. Instead, it had another big gain, but the labor force participation rate had a bigger gain, which is why the unemployment rate went up. It appears to me that these two numbers are chasing each other, going up and down together as part of the normal statistical fluctuations due to sampling. Still, there was a significant component that did correct a blip from last month: Not quite where I thought the blip was, but it is the concept I was discussing.
http://www.bls.gov/news.release/empsit.nr0.htm

For the political implications of this: [crickets chirp] Last month, the surprising drop was newsworthy to post in PF, by an Obama supporter. This month, a Romney supporter (me) brings it back. I had thought that last month's report would be the last before the election, but it was still significant for passing the round-number of 8%. This month's numbers show a continuing decent but unspectacular recovery (recall again that about 1250,000 is the zero-point for job creation). Improvements are good, but this improvement is much too slow to fully recover in one economic cycle. It is a touch slower than the so-called "jobless recover" that Bush endured, even with Bush getting a second hit to the economy due to 9/11: http://www.heritage.org/research/re...report-jobs-added-but-unemployment-rate-rises

I'm not expecting us to recover in one cycle. The fact that our economy is doing as good as it is despite the fiscal cliff is amazing.

How are companies responding? “We’re not hiring,” says Mr Cote. He is far from alone. J.P. Morgan, an investment bank, reports that 61% of its American clients say the fiscal cliff is affecting their hiring plans. That is one reason why unemployment is so high. Durable-goods orders plunged 13.2% in August, partly because companies are too scared to invest their cash mountains to expand production.

http://www.economist.com/node/21564241

 

[Astronuc]

There seems to be a big disconnect here. Almost 3.6 million jobs not being filled!
I would like to how well those jobs pay.

Who’s Hiring? An Inside Out View of High Unemployment
http://finance.yahoo.com/blogs/breakout/hiring-inside-view-high-unemployment-172424938.html

While the headlines might make you think there aren't any jobs to be had, quite the opposite is true. According to government data there are more than 3.6 million unfilled jobs across the country right now. This is the highest level of job vacancies in nearly four years, and if just half of those jobs were filled, the unemployment rate would fall to 6.5%.

. . . .

The Bureau of Labor Statistics reports that no less than 4 of the 10 broad industries it tracks are not only hiring right now, but actually struggling to do so.

. . . .

Economic Shock From Fiscal Cliff Will Last Over a Decade: U.S. Manufacturers
http://finance.yahoo.com/blogs/brea...l-cliff-last-over-decade-warns-181646611.html

The next (or current) president-to-be needs to work with Congress to resolve this looming crisis.


The Unemployment Rate Is a Farce That Needs Fixing: Rep. Duncan Hunter
http://finance.yahoo.com/blogs/brea...needs-fixing-rep-duncan-hunter-113437674.html

It's a problem that he and a growing number of lawmakers want to fix, and it's why the California Republican has sponsored the Real Unemployment Calculation Act — a legislative fix that would require the Department of Labor to get real about what it tells the American people.

In fact, unbeknownst to most people, the Bureau of Labor Statistics (BLS) tabulates not one but six different unemployment rates, ranging from U-1 to U6 (4.2% to 14.9%).

Hunter's bill would make the U5 result the new official unemployment rate through what he calls "a little magic along with the math." According to the BLS website, the U-5 rate includes "discouraged workers, plus all other persons marginally attached to the labor force." . . . .

I agree with Hunter.

 

[russ_watters]

There seems to be a big disconnect here. Almost 3.6 million jobs not being filled!

What's the disconnect? Vs the unemployment rate? The fact that that's the highest in 4 years implies to me that the number isn't at all out of the ordinary. I would expect the number to increase as the employment situation improves: It takes time to fill vacancies and the lower the unemployment rate is, the harder it will be to find qualified applicants.

The Unemployment Rate Is a Farce That Needs Fixing: Rep. Duncan Hunter

I agree with Hunter.

Meh. The Unemployment Rate is just the number that people most commonly cite. You can't change that with legislation. The BLS collects a huge number of statistics and people can slice and dice them however they want. A full picture of the employment situation is more complicated than one number, no matter what the number is.

 

[mheslep]

I'm not expecting us to recover in one cycle. The fact that our economy is doing as good as it is despite the fiscal cliff is amazing.



http://www.economist.com/node/21564241

And what should be done to remedy the 'fiscal cliff'? Who has proposed remedies?

 

[D H]

And what should be done to remedy the 'fiscal cliff'? Who has proposed remedies?

We have a lame duck session starting soon. Compromise has been an extremely dirty word this election cycle. It won't be such a dirty word the day after tomorrow. I suspect Congress will find some way to legislate that fiscal cliff into a fiscal double black diamond. Problem solved -- Until the next Congress comes along and finds out that they don't even know how to ski down the bunny slope.

 

[ParticleGrl]

And what should be done to remedy the 'fiscal cliff'? Who has proposed remedies?

The thing I don't understand is that the EXACT SAME PEOPLE who were constantly going on about the deficit being a huge problem are NOW screaming about the fiscal cliff, which is just the deficit being reduced too quickly. If the deficit is a huge problem, you should embrace the 'fiscal cliff'.

Personally, I think that the deficit isn't a short term problem, and tax hikes and spending cuts aren't a great idea until we hit full employment. But I don't understand why deficit hawks are now screaming about the fiscal cliff.

 

[russ_watters]

I don't really like the mix of plans, but I do like the deficit reduction.

 

[SixNein]

The thing I don't understand is that the EXACT SAME PEOPLE who were constantly going on about the deficit being a huge problem are NOW screaming about the fiscal cliff, which is just the deficit being reduced too quickly. If the deficit is a huge problem, you should embrace the 'fiscal cliff'.

Personally, I think that the deficit isn't a short term problem, and tax hikes and spending cuts aren't a great idea until we hit full employment. But I don't understand why deficit hawks are now screaming about the fiscal cliff.

The fiscal cliff would be economic suicide even assuming a 1to1. And we have no clue about what the multipliers are for those deep spending cuts.

But that's not why their screaming about it. Their screaming because it contains tax hikes. Remember, they want to cut the debt without ever raising taxes.

Of course, that makes absolutely no economic sense... But the whole fiasco last year didn't make sense.