Reclaiming Common Sense

Eight Sectors Lost Jobs Last Month, Six are Below Pre-Recession Levels

Last month this column published an article  "Jobs in Recession and Expansion - Five Sectors not back to Pre-Recession Levels." This was one of many columns written regarding the August Jobs Report. It was found that the Mining and Logging sector, the Construction sector, Manufacturing Sector, Information Sector, and Financial Services Sector had not returned to pre-recession levels of employment. We saw a half million workers leave the workforce last month. This is known as the End of Summer. Summer jobs disappear at the end of Summer. This is one of the reasons why the government seasonally adjusts the data. Another reason is that it is easy to manipulate seasonal changes when they are worse than expected, as they did this Augustand September

This week, or weak, we will receive the Monthly JOLTS (Job Opening and Labor Turnover Survey) data. It is a ton of gobbledy gook. It tells us wheer the hires and fires are by region. It also tells us where they are by sector. They do not delineate full-time and part-time jobs - that is why the report is virtually worthless. It is also nearly worthless because while we are still digesting the September Employment Situation Report the JOLTS report is for August. A value of this report may be in the sector breakdown, non-seasonally adjusted. We know where the sectors lost jobs during August a month ago.

Let's get back to September.

No Surprise - Mining and Logging Down. We saw a surge in mining and logging through 2014. We have seen declines since that time. We are approximately 110,000 workers down from August of 2008 and 125,000 from September 2014.

Home Construction Down - Construction Workers Down. We know that the new construction data has been sluggish for years. We suffered a massive new construction crash. There is no easy way to say that. August new construction was slower during 2016 than 1992 for starts. There are 1 Million fewer construction workers than during the peak of the new construction market during 2005 (Units) and 2006 (Price.)

Manufacturing is Down 1 Million workers since  September 2008. President Obama was going to grow manufacturing through his  Manufacturing Technology Hubs. Remember than from 2014? There has been some improvement since 2010 - 665,000 workers. The problem is that there are fewer manufacturing workers this September compared to September of 2015.  There are 5 million fewer manufacturing workers since 1998. That is what a "giant Sucking Sound" looks like in graphic form.

Information Service is down 900,000 since the Recession of 2001 - 200,000 since 2008. This is a number that continues to amaze me. We hear that Facebook, Amazon, Netflix, and Google (Alphabet) are doing very well. These four FANG companies rely on technology. FedEx relies on technology. Cybersecurity depends upon technology. Are we really farming these jobs across the rest of the world ?

Financial Services have almost recovered from the financial crisis. Remember that this was a banking and housing recession that caused a retail recession and a jobs recession that lead to a GDP recession. We are less than 100,000 workers from the pre-recession peak.

Fewer Government Workers than 2007 - more than 2008. We have been under some budgetary constraints since the "Sequester."  We  see this data excluded from the "Private Sector" data. It is included in the "Non-Farm Payroll" data.

We saw worker loss last month in Eight Sectors. We saw month to month contraction in the Mining and Logging sector, the Construction sector, Manufacturing Sector, Information Sector, and Financial Services Sector, as well as the Trade and Transportation Sector, Leisure and Hospitality Sector, and "Other Services" Sector.   We should not be surprise that the Leisure sector is seeing a slump because that is pretty much the definition of Summer. Mining is the only sector that is down from last September. Low fuel prices - lower profits - fewer workers.

Where would we have been without a spike in government workers?