Thursday, November 26, 2015

Another “Black Friday” Note

Going back to 2011, I’ve posted notes on Black Friday on LaMarotte, the last such being in 2013. The marketing efforts of an almost hysterical Retail Sector, intended to incentivize us to shop—with a mountain (or a log-pile, as Monique has put it) of paper—nicely drenched by the rain that fell from 2 am onwards early this morning. In my case it incentivizes me to think about the economy—and try to explain to myself the broad patterns I note and note again on the first Friday of every month when the Bureau of Labor Statistics (BLS) brings its employment report. Certainly since the Great Recession (2008-2009) I cannot help but think that something really new is in the works. The Consumer Society appears to be fading. Since that time has also coincided with vast troubles all across the world, the beginnings of what may some day be called the Thirty-Years War of the Muslim culture, the explanation for a continuingly sluggish economic performance here at home cannot be entirely economic. Indeed I don’t think it is. But the spine, the core, of it, is. We may be feeling the effects of a paradox. It is that for profitability business benefits by getting rid of labor in the work place (i.e. the Luddites had it right), but shifting more and more activity to technology has the paradoxical effect to curbing demand by depriving at least a part of the population of income.

The Consumer Society was based on confidence—confidence that jobs would be present; that holding one would be rewarding; that jobs would be safe, well paying; that income would grow with seniority. Needless to say, travel would be safe—and sending children to school would not be tantamount to sending them to a potential shooting gallery as innocent targets. The Great Recession, perhaps, was a kind of moment in recent history—like the fall of the Berlin Wall. It was the falling of global confidence in the economy.

One instance of this is the transformation of fulltime, permanent into temporary employment. A graph will illustrate this. It’s just a sliver of evidence, but meaningful. I present, below, data on part time employment since 1995. I have the data from successive reports of the BLS’ Current Population Survey; for a beginning point, see the link here.

Temporary employment began rising around 2000, shot up sharply in the Great Recession, and has stayed up there ever since—indeed is growing still. In 2015 we have nearly 4.5 million more temporary workers than we had in 1995. Full time employment grew 18.2 percent (1995-2015—from 101.7 to 120.2 million), temporary employment 19.8% (same dates, from 23.2 to 27.7 million). The annual rate of growth for fulltime employment is 0.84, that of temporary employment 0.91 percent. These are small numbers, to be sure, but the phenomenon is measurable. And if you know any people in their 50s, say, looking for permanent work and being able only to get temporary assignments—and we certainly do—those facts begin to circulate…and have an ever growing effect on one’s general confidence.

Saturday, November 7, 2015

October 2015 Employment Change

The October report on the Employment Situation arrived from the Bureau of Labor Statistics yesterday (link) and was, you might say, well received. BLS reported a gain of 271,000 jobs—well above the 200K level that is generally anticipated. Indeed, this month’s result has been the best for October since the end of the Great Recession as shown in the following graphic:

 To be sure, the data are subject to revision and may therefore eventually turn out to be either even better or be revised downward. The second best performance came in 2010 (a gain of 248K jobs)—when, it seemed, the economy behaved as if a normal, meaning rapid, recovery would be taking place. But 2010 did not quite deliver.

The regular month-by-month report is presented graphically below:

October looks good, but the exuberant sentiment in the media may well be premature. Personal observation while shopping—and scattered reports in the business press—suggests that an almost desperate Retail Sector was pushing everything back in time lest it miss out on what may turn out, again, to be a weak-ish holiday season.

October looks good, but projections for the year as a whole (see the next graphic) still has 2015 under-performing 2014:

A look at the job gains in some detail, thus sector by sector, also reveals signs of chronic weakness. Thus the highest gains were scored by Professional and Business Serives (78K), Health Care and Social Services (56.7K), Retail Trade (43.8K – presumably staffing up for the holidays), and Leisure and Hospitality (41K). Four sectors showed loss of jobs (Mining and Logging, Transportation and Warehousing, Utilities, and Information (Publishing and Media). Manufacturing added zero jobs! Thus the more “serious” sectors were at zero or negative growth. In other words, let’s curb our enthusiasm.

The media make much of the fact that unemployment has now reached 5 percent; but I don’t trust that number. It does not count those who’ve given up looking for work…