The Employment Situation Report, or Jobs Report, is one of the most anticipated economic data sets during any given month. Other data of importance are the new home construction and new home sales reports, as well as the existing home sales report and the retail sales (MARTS) report. The past few jobs reports have been lackluster.
We officially lost seasonally adjusted "jobs" during May. We could have reported worker losses during August. We could have reported fewer than 50,000 workers added during during September and October. What has been apparent is that the unadjusted worker growth has been slowing.
This column wrote an article in advance of the release of the data projecting non-seasonally adjusted full-time job losses, unadjusted part-time job gains, a drop in unemployment, and the probability of a dropping unemployment rate and a drop in the participation rate. That is the Current Population Survey (CPS) Data. The forecast column also projected real, non-seasonally adjusted (NSA) worker gains and seasonally adjusted (SA) worker gains under 150,000.
So what happened?
We Recorded a Loss of 628,000 Full-time Jobs and added a Record Number of Part-time Jobs for the Month of November. We added 678,000 NSA Part-time (PT) jobs. This means that we added a total of 50,000 real, non-seasonally adjusted jobs last month. This is during the run-up to the Christmas Holiday. We lost more FT jobs last month than we lost during November 2015. We did not lose as many full-time jobs as we could have and we gained more part-time jobs than we should have.
They Reported a Net Gain of 118,000 Seasonally Adjusted Part-time Jobs and a gain of 9,000 Full-time Jobs. We gained fewer seasonally adjusted obs than last November. We added substantially fewer jobs than we added during November 2013. The good news is that we could have seen net seasonally adjusted CPS job losses during November. The bad news is that the SA CPS growth, in real terms, was slower than November 2007 and comparable to November 2009.
We Recorded and Reported huge drops in the Unemployment Levels. It was projected in this column that the unadjusted unemployment level should fall an that the seasonally adjusted unemployment level could rise. Both fell, not just a little, but by sizable amounts. We saw a drop in full-time jobs of over 600,000. This means that those FT job workers were either working multiple jobs and lost one of them - thereby being ineligible for unemployment benefits - or they lost a seasonal job - also ineligible for unemployment benefits.
A Growth in the Workforce Population and a minor addition of net jobs meant that the Participation Rate and Unemployment Rate Fell.The unemployment rate, non-seasonally adjusted, fell to 4.43%. This is supposedly "full-employment." Anytime the U-3 unemployment rate is below 5% we are supposed to be at full-employment. The participation rate fell to 62.64%. This is better than the November 2015 participation rate and worse than the November 2014 participation rate. This column will address the fallacy of the full-employment rate next week in the "Four Presidents at 94 months" article. The effective unemployment rate may exceed 10% when the participation rate is factored into the unemployment rate.
Is the Full-time Jobs Iceberg Reforming? Many months ago an article was published on the predecessor to this column's website called "The Part-time Iceberg." Peak employment, prior to the Great Recession, was July 2007. We lost nearly 15 million full-time jobs at the depth of the recession. This is the point in time that President Obama picks for his Job Creation Record as President. He forgets that he had to lose jobs before he could start adding them. We have been attempting to break through the 5 million job net creation level level ever since the recession began. We have only added 5.07 million jobs since July 2007. Eighty percent of those jobs have been part-time jobs.
We peaked for Full-time Job Creation this July. This is no surprise. We peak for employment either during July or August every year and we hit bottom most years during January. There is seasonality in the hiring and firing cycles here in the United States. This is why the government and the majority of the media use the seasonally adjusted data. Unfortunately, we experience the non-seasonally adjusted data. WE cannot just say we are employed when we aren't employed. We can't say our income, seasonally adjusted, went up when it didn't.
We are going to lose more jobs by the end of the Obama Presidency. January is a huge job loss month. We could see over 2 million jobs lost during January alone.. Companies trim staff or close up shop at the end of the year. It happens. It is almost a certainty that we will have fewer participants at that same time.
We Recorded a Slower Rate of Worker Growth than November 2013-2015. We want to see job growth. Worker numbers, the CES number, sound good except when you think about adding 150,000 on a basis of 122,000,000 compared to 150,000 on 120,000,00 workers. This is not the first time that we have seen slower monthly growth during this year.
We saw Slower Seasonally Adjusted Worker Growth than 2011-2015. Considering that they could have reported net seasonally adjusted worker loss multiple time during the past few months, and considering that we did lose seasonally adjusted workers during May, seasonal growth of any level is good, especially when the worker growth, NSA, was positive.
We are Adding Workers at a Slower Pace than 2011-2015. This year's job creation has followed a similar pattern as we have seen during prior years. We lose jobs during January.we spend the next three months recovering those lost jobs. WE add some jobs during May, June, July, and August. We lose workers during September and add jobs during October and November. December is is coin-flip.The "No Worker Creation Crash, Yet" graph shows a positive trend.We have not has weakness in the economy that is indicative of a looming Recession
We are Growing the number of Workers Slower than 2.0% per Year - and Slower than October. Where most people focus on the Gross Domestic Product definition of a Recession (Two Quarters with Negative Growth) this column examines the data from retail sales, housing sales, and the jobs market. We saw a downturn during the Fall of 2000 and during the Fall of 2007. The recessions officially began during 2001 and 2008. This is not to say that we are in the pre-recession doldrums. The rolling year NSA CES growth rate peaked in 2012 then dropped below 2% only to recover back to 2.6% during February of 2015.
The Problem is that the Seasonally Adjusted Jobs Could have Been Reported Lower than its was.The rate of growth, on a month to month basis, was at the top end of what was expected. The seasonal factor was not as high as it could have been. If they would have used last year's seasonal factor then the private sector number would have been modestly lower. If we used the seasonal factor from the prior election year the number would have been reported at 146,000. If we used the same factor as President Obama's first year in office the number would have been reported at a mere 121,00 workers added.
Will we see another push toward 2.5% or will it go negative? It is going to be a bumpy ride. That much is certain.
It's the economy.
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