Could Workers Grow and Jobs Decline? The Devil is in the Data.
Normally Scrooge lets jobs go at the end of the year. Corporations clean house at the ends of the year. Some let go of seasonal workers. Some close their doors for good. Sometime seasonal full-time jobs rise. Most of the time non-seasonally adjusted full-time jobs and part-time jobs are trimmed.
The good news is that the government data people realize this and seasonally adjust the data during December and January. The seasonal factors were not able to offset the net real job losses during 2007, 2008, or 2009. We should see non-seasonally adjusted job losses converted to seasonally adjusted job gains this month.
The non-seasonally adjusted and the seasonally adjusted unemployment data should both rise this month. The continuing claims data, while at near historic lows for the time period closest to the data collection period for the jobs report. That said, the unemployment claims data has risen from mid-November to mid-December so, in theory, the U-3 unemployment level should rise. These two data sets do not measure the same thing. U-3 measures those out of work, looking for work. The continuing claims data measures those who are out of work, who receive unemployment benefits, who are looking for work. A person could have lost his or her only part-time job and not qualify for unemployment benefits. Likewise, a person could have been working two or more jobs during the Holidays and lose one of them. They are still working, just fewer jobs. Companies could be adding more workers and converting jobs from seasonal to permanent or from full-time to part-time.
Are we still trending with President Clinton's first year in office? If we are trending with President Clinton's first year in office the number of full-time and part-time jobs may remain unchanged. The NSA CES worker growth continues as it has, President Trump will add workers, non-seasonally adjusted, this month, keeping him ahead of President Clinton's real growth and slightly behind President Clinton's growth rate.
More Jobs with fewer people? The number of multiple job holders could increase from the November level and still fall short of where we were during December of last year. Multiple job workers can spike during October, November, and December.
Participation should improve from last month, last December. The good news is that the increase in seasonally adjusted jobs and the increase in seasonally adjusted unemployed workers means that we should see a reported increase in participation.
Other factors to watch. This column writes articles regarding the changes in work for men and women as well as sector changes and changes by age groups. The question this month is will we see an increase in manufacturing and construction workers? Is there going to be a push at the end of the year for hurricane repairs done in Florida and Texas? What about mining and logging jobs? If these jobs improve then we will see more men working during December. WE should see a spike in the leisure and hospitality sector, and this should mean that more women were working during December than during November. Will we see a surge in workers under the age of 30? All of these data points are non-seasonally adjusted.
Expect a solid private sector "jobs" number. The trend is our friend. We may follow President Clinton's footsteps and add workers. If the growth rate is over 0.00% then we should see over 200,000 seasonally adjusted workers added for the month of December. A 300,000 headline number is within reach. Unemployment may rise. The combination of rising employment and rising unemployment means that participation should rise , as well. Participation should grow faster than the workforce population meaning that the workforce participation rate should improve. What is going to happen to wages? Readers of this column know that there is an unofficial measure of unemployment called U-7, the effectively unemployed rate. Participation is below 64%. We have had participation as high as 67%. Higher wages may draw people back into the workforce. Wages may not rise quickly as there are millions of potential workers, neither employed or unemployed, that will be "fighting for jobs."
It's the economy.
Could Real Private Sector Worker Growth Be Reported as a Super Surge?
The monthly employment situation report, or jobs report, will be released Friday January 5th. This jobs report covers through December 12th. We have seen increases in retail sales and in on-line sales. Will these surges in sales spur more seasonal hiring? Are we going to seasonally adjusted Current Population Survey gains even with a potentially large drop in full-time jobs? Will we see the regular December non-seasonally adjusted private sector worker losses during the 2000s swing back to end of the year hiring as we saw during the 1980s and 1990?
We have lost non-seasonally adjusted workers during fourteen of the past seventeen years - even during President Obama's Private Sector Worker Streak. The month to month change from November to December has been down We did add workers during December 2014 and December 2015. We lost workers during 2000-2011, 2013, and 2016. The good news is that the government can solve that inconvenient truth with seasonal adjustments to the data.
We only lose seasonally adjusted private sector workers during recessions. It is amazing how that happens. Minor losses are seasonally adjusted to substantial gains. This is why the growth rates have to be examined as well as the seasonal factors.
The Seasonal Factors had been falling - Will they fall again? If you look at the trend the seasonal factors had been falling since 2011. If they had used the seasonal factors for 2015 during 2016 the private sector growth would have been reported at just 71, 000 workers, not 203,000.
If we grow even slightly we could see well over 200,000 seasonally adjusted private sector workers added to the economy. If we follow the lead of President Clinton's economy we could see a growth of over 0.09%, non-seasonally adjusted. We will see private sector worker growth reported. Expect something around 0.01% to 0.03% growth. It could be positive. It could be a contraction. Expect the seasonal factor to drop. Expect a number between 162,000 and 249,000 private sector workers added - basically expect a 200,000 number - do not be caught off-guard with a 300,000 number
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