"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Friday, June 3, 2011

Employment Situation

And now, the moment you've all been waiting for with baited breath, the balm bringing sweet surcease of sorrow to soothe the hurts of the market...
It's the Employment Situation report!  The Bureau of Labor Statistics' monthly review of how many jobs were created in a month and what the current unemployment rate is.
If you recall from last month, the April figures were... mixed.  Nonfarm payroll employment crushed expectations, increasing by 244,000.  The official unemployment rate rose to 9.0% (missing expectations by 20 basis points), as we added about 200,000 people to the list of the people who are unemployed but looking for work (bringing the level to 13.7 million).  The average workweek remained steady at 34.3 hours, and average hourly earnings rose 0.1% (missing expectations) to a level of $22.95 per hour.
The number of long-term unemployed declined by 283,000 to 5.5 million, meaning they made up 43.4% of the unemployed.  Individuals employed part time for economic reasons increased to 8.6 million (up about 200,000), and the marginally attached individuals increased to 2.5 million (up about 100,000), putting the effective unemployment rate at 16.29%.
So, that was April.  For May, the Econoday-surveyed analysts are guardedly optimistic.  They're expecting to see 170,000 nonfarm jobs added, the unemployment rate decline to 8.9%, average hourly earnings increase 0.2%, and the average workweek remain steady at 34.3 hours.  Is that optimism justified?  Let's turn to The Employment Situation -- May 2011 report to find out.
And...  Oh.  Oh, my.
Before we go any further, a little mood music.
Nonfarm payroll employment increased by 54,000 in May, missing expectations by 116,000.  The unemployment rate increased to 9.1%[1], with 13.9 million people unemployed and looking for work.  The average workweek increased mildly to 34.4 hours, and average hourly earnings beat expectations by increasing 0.3% to $22.98.
The number of long-term unemployed[2] increased by 361,000 to 6.2 million people, meaning they now make up 44.6% of the total population of the unemployed.  The number of people employed part time for economic reasons[3] declined slightly to 8.5 million.  Individuals marginally attached to the labor force[4] fell to 2.2 million.  This puts the effective unemployment rate at 16.1%.
Sing it with the Man in Black:
"IF I could start again
"a million miles away
"I would keep myself
"I would find a way."
[1]  The BLS report tries to play that off as "essentially unchanged".
[2]  That's anyone unemployed for 27+ weeks who is still looking for work.
[3]  That is, people who would really like to have a permanent full time job with good benefits, but who can't find one and so are working part time in an effort to make ends meet.  Or, more formally, "individuals ... working part time because their hours had been cut back or because they were unable to find a full-time job".
[4]  People who are not in the labor force, want and are available for work, and have looked for a job in the past 12 months.  Despite being unemployed, they are not counted as unemployed because they had not looked for work in the past 4 weeks.  Often because they've given up hope.

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