Jack Dunn - Reclaiming Common Sense

Last Friday we received a strong October Jobs Report - the Second strongest September to October private Sector worker growth since 1980. Unemployment fell, as expected, part-time jobs edged higher and full-time jobs dropped, as expected. If you heard that this past Friday you probably did not hear any more after Saturday. This column spends days digging into the details and writes more than one article on the Jobs Report data. In addition to the top line Current Population Survey (CPS) data on jobs and unemployment and the Current Employment Statistics (CES) data on workers this column has published:

  • "Five Presidents a Nine Months." This article details how President Trump has added more non-seasonally adjusted Private Sector Workers during his first nine months than his prior two-term Presidential predecessors. He has also added more full-time jobs and seen a larger drop in unemployed workers.
  • "Multiple Job Workers Down during October." Obamacare was supposed to afford workers the opportunity to work fewer hours and still receive health care benefits. What we saw from July 2007 to January 2016 was a full-time jobs Iceberg with huge full-time job losses and noticeable part-time job gains. The problem is that employers were hiring more part-time workers to avoid these benefits. We had seen record or near record levels of people working two part-time jobs each month last year.
  • "Men (Not) at Work" detailed how there are more new male workers than new full-time jobs for men. The same could be said for women. The disparity is more pronounced with men. Only 288,000 new full-time jobs have been created for nearly 12 million more men since July 2007.

This disparity in job creation for men can be seen, and has been seen, in the CES sector data. The CES data, seasonally adjusted or non-seasonally adjusted, has indicated that some sectors have not returned to 2007 levels. Four to be exact. One sector has not returned to its October 2009 level of workers. Also, the Non-farm payroll number could have been reported higher.


The Non-Farm Pay-roll (NFP) number could have been reported higher. The best September to October NFP worker growth rate  was reported during 2015. This column normally focuses on the total private sector number. The NFP number includes government jobs while the private sector data does not. Each sector, or super sector, had its own seasonal factor that is used to covert the NSA data to the reported SA value. These seasonal factors change month to month and year to year.If the seasonal factors from 2009 were used, even with a new record growth rate, the NFP number could have been reported as a decrease. The forecast article detailed how the aggregate seasonal factor had been all over the place. If last year's seasonal factors were applied to this October's data then the seasonal grwth could have been reported at 291,000 workers.


Did we Gain or Lose workers in Three sectors last month? The main disparity between the 2009 and 2017 values can be found in three sectors: Construction, Manufacturing, and the Trade, Transportation, and Utility (TTU) Sectors. The TTU sector, as well as the Professional Business Services Sector and the Health and Education Sector have seen the largest growth. Manufacturing and Construction have been down.  We saw seasonally adjusted gains reported in Manufacturing, Construction, and the TTU sectors that could have been reported lower or negative.


Two Sectors Recorded month to month drops in Workers. There was a slight down-tick in Mining and Logging. there was a considerable drop in the Leisure and Hospitality Sector. That said, mining and logging have seen the number of workers soar by over 8% since last October.  Year to year every sector except IT is up in the number of workers. The largest number increase is in Professional and Business Services followed by health and Education Services. A similar pattern is seen in the SA CES data. The main difference is the Leisure and Hospitality Sector. Note that all of this data is available on the Bureau of Labor Website. This data is also available from the Federal Reserve Economic Division.


Last Month's Data was revised higher. The August data and the September data were both revised higher. This means that the "job loss" reported last month was converted to a "jobs gain."


This has been an incomplete recovery. Four sectors to returned to pre-recession levels. Two sectors, IT and Manufacturing, may "never" return to pre-recession levels. The data recorded was better than was reported.


It's the economy.