tag:blogger.com,1999:blog-76653421077233362572024-03-13T10:53:21.930-04:00LaMarotteOn the economy, the secular, on bread and circuses...ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.comBlogger417125tag:blogger.com,1999:blog-7665342107723336257.post-47416560744358147362017-04-08T10:35:00.000-04:002017-04-08T10:57:30.756-04:00March 2017 Employment Change<div class="MsoNormal">
The March report, by the Bureau of Labor Statistics, known as the Employment Situation (<u><a href="https://www.bls.gov/news.release/empsit.nr0.htm">link</a></u>), produced something of a shock. February’s gains were 235,000. First of all those results were revised downward by 16,000 (to 219,000); January’s results of a 238,000 jobs gain were revised downward as well by 22,000 (to 216,000). And this month’s results, for March 2017, came in at 98,000—thus roughly half of what most people expected. NOT GOOD, as DT might tweet. Herewith the graphic I show for the total period from December 2007 to the current month:<br />
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The big drop in employment gain had much to do with chaotic weather all through March—much colder and liberally plagued by floods, storms, and tornadoes. Job gains in Construction, for instance, which had produced a gain of 59,000 jobs in February, came in with a gain of only 6,000 in March. The Retail Sector, which had shown growth of 35,300 jobs in January, showed <i>losses</i> in total employment of 30,900 in February and 29,700 in March. Turbulence and cold weather put a crimp in shopping too. Leisure and Hospitality, as one might expect, went from a job gain of 27,000 in February to a gain of only 9,000 in March.</div>
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Let’s next look at the annual projection produced by three months of gains in 2017. The graphic that follows shows it (last bar).</div>
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The projection is worse than it was for the 2012-2016 years—thus just a shade better than 2011. But, of course, it’s still early in the year. Having exploded $60 million worth of Tomahawk missiles recently—59 that landed and one that fell into the ocean—we’ve created a new demand for replacing them in the year that is still left. That might make up for some of the jobs taken away by misbehaving weather (or “fringe attacks” by Global Warming).</div>
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Hope’s just around the corner.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-53965786374009057972017-03-11T11:55:00.006-05:002017-03-11T12:49:59.736-05:00February 2017 Employment Updates<div class="MsoNormal">
It’s been a while since I’ve posted these data—the last time for November 2015. Herewith an update. It covers all of 2016 as well as the first two months of 2017. I do this because of all the hoopla from the Trump administration—which tends to label good news as due to Trump, bad news as numbers-games put out by his the opposition. The data shown are from the most recent issuance by the Bureau of Labor Statistics on the Employment Situation (<a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a>).<br />
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February results show that the economy added 235,000 jobs in February: February thus produced a good number, to be sure. But that number is shy of the January 2017 result by 3,000 jobs. That sort of change, again, is normal; but no big fuss had been made over the January result. And, looking back, 2016 produced, four months in which job growth exceeded the 235,000 jobs-gain number. So we’re in effect just soldiering on. Note, however, that February <i>2016 </i>produced 237,000 jobs, beating this year’s result under an Obama Administration. That surely can't be true, can it?<br />
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Alas. When looking at a long history of employment growth (or decline), as we do when looking at the information in the graphic above, the year so far shows no obvious sign of a coming “revolution” in job gains. To be sure, the next graphic, which projects full-year 2017 results from two months’ data, suggests that 2017 is on track to be <i>second </i>best to 2014 since the Great Recession:</div>
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ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-79529623485227682282015-12-04T13:15:00.001-05:002015-12-04T13:15:42.588-05:00November 2015 Employment Change<div class="MsoNormal">
The Bureau of Labor Statistics report on the Employment Situation (<a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a>) showed a gain of 211,000 jobs over October 2015. Herewith the standard chart:</div>
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<a href="http://4.bp.blogspot.com/-jiRX5fkPk5k/VmHWqlHBjFI/AAAAAAAAHsc/hZk8Advuk98/s1600/Month%2Bfor%2BNovember%2B15.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="http://4.bp.blogspot.com/-jiRX5fkPk5k/VmHWqlHBjFI/AAAAAAAAHsc/hZk8Advuk98/s400/Month%2Bfor%2BNovember%2B15.png" width="400" /></a></div>
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The number is in the respectable range. But I got to wondering: How does it compare to other transitions from October to November—considering that November is the first month of the biggest retail months of the year? Herewith another graphic:</div>
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<a href="http://3.bp.blogspot.com/-4bmqhjMQS78/VmHXh2QwBYI/AAAAAAAAHso/EbnsAUIMJBA/s1600/Novembers%2B2005%2B2015.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="http://3.bp.blogspot.com/-4bmqhjMQS78/VmHXh2QwBYI/AAAAAAAAHso/EbnsAUIMJBA/s400/Novembers%2B2005%2B2015.png" width="400" /></a></div>
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This one goes back to 2005 and shows changes, October to November, in the 2005-2015 period. Notice how the October-November change signals the coming of the Great Recession—and thereafter the annual increase October to November of the same number—until 2015. Last month the number, while respectable, indicates a divergence from trend. Last year we added 423,000 jobs; this year less than half as much. Does that signal that Christmas sales are moving to December—or is it a sign of continued uncertainty and lack of confidence? We shall see how December behaves.</div>
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The next chart, showing projections for 2015 based on 11 months of data, show that 2015 may also break the total annual job-growth trend since the Great Recession by under-performing 2014:</div>
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ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-38417107917199545982015-11-26T14:38:00.002-05:002015-11-26T14:38:51.334-05:00Another “Black Friday” Note<div class="MsoNormal">
Going back to 2011, I’ve posted notes on Black Friday on <i>LaMarotte</i>, 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. <o:p></o:p></div>
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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.<o:p></o:p></div>
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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’ <i>Current Population Survey</i>; for a beginning point, see the link <u><a href="http://www.bls.gov/cps/cps_aa1995_1999.htm">here</a></u>.<o:p></o:p></div>
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<a href="http://1.bp.blogspot.com/-ByaUp9EtzwA/Vldfpv_HhZI/AAAAAAAAHr0/DQzMFTx9DXM/s1600/PT%2BEmploy.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="http://1.bp.blogspot.com/-ByaUp9EtzwA/Vldfpv_HhZI/AAAAAAAAHr0/DQzMFTx9DXM/s400/PT%2BEmploy.png" width="400" /></a></div>
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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.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-73543759583179821332015-11-07T11:39:00.003-05:002015-11-07T11:39:39.870-05:00October 2015 Employment Change<div class="MsoNormal">
The October report on the Employment Situation arrived from the Bureau of Labor Statistics yesterday (<a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a>) 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:</div>
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<a href="http://4.bp.blogspot.com/-Ys4mEjvXk1o/Vj4oq9b_TnI/AAAAAAAAHqY/HB6b39QLRBo/s1600/Octobers%2B2008-2015.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="http://4.bp.blogspot.com/-Ys4mEjvXk1o/Vj4oq9b_TnI/AAAAAAAAHqY/HB6b39QLRBo/s400/Octobers%2B2008-2015.png" width="400" /></a></div>
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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.</div>
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The regular month-by-month report is presented graphically below:</div>
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<a href="http://4.bp.blogspot.com/-Wz1PDsThBec/Vj4o0S4aezI/AAAAAAAAHqs/1Rme-srsHRA/s1600/Month%2Bfor%2BOctober%2B15.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="http://4.bp.blogspot.com/-Wz1PDsThBec/Vj4o0S4aezI/AAAAAAAAHqs/1Rme-srsHRA/s400/Month%2Bfor%2BOctober%2B15.png" width="400" /></a></div>
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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.</div>
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October looks good, but projections for the year as a whole (see the next graphic) still has 2015 under-performing 2014:</div>
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<a href="http://1.bp.blogspot.com/-O0VZ9cra6II/Vj4oubHv0gI/AAAAAAAAHqk/HPJQAXzZ-uM/s1600/Annual%2Bfor%2BOct%2B15.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="290" src="http://1.bp.blogspot.com/-O0VZ9cra6II/Vj4oubHv0gI/AAAAAAAAHqk/HPJQAXzZ-uM/s400/Annual%2Bfor%2BOct%2B15.png" width="400" /></a></div>
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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.</div>
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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…</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-5769196637746986742015-10-03T14:21:00.001-04:002015-10-03T14:21:42.910-04:00September 2015 Employment ChangeThis most recent report on the Employment Situation, for September 2015, clearly surprised the business media and the financial sector. These data are reported by the Bureau of Labor Statistics (link). Virtually everyone anticipated job creation at a level of roughly 200,000. The actual result—142,000—came as a shock. Furthermore, data for August and July were also revised downward by 59,000. This impelled me to update my own numbers here. My last report was for April. Back then it looked like 2015 would be weak; five months later, that trend is still weak. Herewith an updated monthly graphic followed by a projection of 2015 based on nine months of actual results:<br />
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<a href="http://1.bp.blogspot.com/-cuQ4nEKVCEk/VhAb6N50hqI/AAAAAAAAHoM/3WPsdVlmKho/s1600/Month%2BSept%2BEmployment.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="288" src="http://1.bp.blogspot.com/-cuQ4nEKVCEk/VhAb6N50hqI/AAAAAAAAHoM/3WPsdVlmKho/s400/Month%2BSept%2BEmployment.jpg" width="400" /></a></div>
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<a href="http://4.bp.blogspot.com/-5tsUawkMj_A/VhAcBJbavLI/AAAAAAAAHoU/qFocHcICx00/s1600/Annualized%2BSept.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="288" src="http://4.bp.blogspot.com/-5tsUawkMj_A/VhAcBJbavLI/AAAAAAAAHoU/qFocHcICx00/s400/Annualized%2BSept.jpg" width="400" /></a></div>
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Thus far, projected job creation in 2015 looks lower than either 2013 and 2014. Since the Great Recession, 2014 has thus far been best, producing an average monthly growth of 260,000 jobs; 2015 (thus far) has produced 198,000—versus 199,000 in 2013.<br />
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Next I show two trend lines. The first shows the growth trend between 2013 and 2014. The second the declining trend between 2014 and 2015. In both cases 2014 is shown in pink:<br />
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<a href="http://2.bp.blogspot.com/-DulG2Ar2NDI/VhAcEB8T4hI/AAAAAAAAHoc/XkOqWFzwChM/s1600/Job%2BTrend%2B13-14.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="232" src="http://2.bp.blogspot.com/-DulG2Ar2NDI/VhAcEB8T4hI/AAAAAAAAHoc/XkOqWFzwChM/s320/Job%2BTrend%2B13-14.jpg" width="320" /></a><br />
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<a href="http://4.bp.blogspot.com/-Ol_vOyMQgdo/VhAcGVZbxbI/AAAAAAAAHok/WHHrztMSL80/s1600/Job%2Btrend%2B14-15.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="234" src="http://4.bp.blogspot.com/-Ol_vOyMQgdo/VhAcGVZbxbI/AAAAAAAAHok/WHHrztMSL80/s320/Job%2Btrend%2B14-15.jpg" width="320" /></a><br />
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The big picture since the Great Recession (visible on the first, the monthly graphic) is one of hesitant growth. What we must have is around 87,000 new jobs per month—to keep up with our population growth. We’ve averaged well above that; therefore we are not in any dire trouble. But neither have we resumed, or are likely to resume, the exuberant celebration of a Consumption Culture. That game requires confidence; and no matter a few points increase in Consumer Confidence; that confidence fades as rapidly as it increases.ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-37644319585052020702015-05-09T12:31:00.005-04:002015-05-09T12:31:59.244-04:00April 2015 Employment Change<div class="MsoNormal">
The Bureau of Labor Statistics publishes employment changes on the first Friday of each month (<u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a></u>)—for the previous month. Employment in April increased by 223,000. A lower number had been anticipated, hence sighs of relief came yesterday. 2015, however, is not looking all that energetic. If the economy’s performance January through April is projected for the entire year, the results indicate that employment growth in 2015 will be lower than in 2013 and 2014. Such an outcome is not very likely, but it does show that something significant has changed since the Great Recession. When economies begin to produce patterns similar to the annual seasons—now better, now worse—the safe presumption is that something is missing; in this case it is public belief that things are destined, always, to get better: unlimited growth, in other words. Public confidence.</div>
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Herewith the two graphics that show monthly data from December 2007 forward and annual results for 2007 through 2014 (actual) and for 2015 (projection):</div>
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If we examine how April’s employment gains were distributed, we note the following: The numerically largest increase in employment came in the two largest sectors, Professional and Business Services and Education and Health Services (62,000 and 61,000 jobs respectively). Construction, a relatively small sector, gained significant number of new jobs—45,000. Two sectors (Mining and Logging and Wholesale Trade) lost employment (-15,000 and -4,500 respectively). The other sectors all had small gains. The continuing and persistent trend is an increase in private sector services, including private education. In terms of total size, Government, which represents 15.5 percent of total employment (all those public sector teachers) only gained 10,000 jobs; in effect it lost share of total employment <i>again</i> in April. The tax cutters ought to be rejoicing; those who long for Big Picture improvements ought to mourn.</div>
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Speaking of share of total employment, nine sectors lost share, including Mining and Logging, Manufacturing, the Trades, Information, Financial Services, Leisure and Hospitality, and Other Services; the biggest loser was Government. Utilities were unchanged. The share shifts are tiny, but the cumulative picture is not that of an economy in uniform growth but one growing because an aging population is exerting a new demand (Health Care and Social Assistance) and because industry is more and more into management (Professional and Business Services) rather than actually making or delivering goods.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com1tag:blogger.com,1999:blog-7665342107723336257.post-88593262940768751852015-03-06T12:21:00.002-05:002017-03-13T11:38:06.688-04:00Employment Update: February 2015<div class="MsoNormal">
The first Friday of the month brings us the Employment Situation courtesy of the Bureau of Labor Statistics (<a href="http://www.bls.gov/news.release/empsit.nr0.htm"><u>link</u></a>). In summary, the economy added 295,000 new jobs. The BLS, however, revised January results downward (-18,000 jobs); hence the net increase since the last report here has been 277,000 jobs. In the 2010-2015 period, this has been the second best result for February yet; the best came in 2013 when we had a gain of 314,000 jobs. </div>
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The graphic above shows the monthly progress from the “grand canyon” of the Great Recession to the present. We’ve yet to match the huge monthly gain in May of 2010, but the overall pattern shows steady growth in economic health.</div>
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Taking results for January and February and projecting the entire year 2015 based on these preliminary results, it appears that 2015 will outperform the earlier years of the recovery—as shown in the second graphic.</div>
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We had recovered all jobs lost in the Great Recession in December of 2013*. Since then I have been tracking how we are doing recovering what I’ve been calling the “Labor Force Growth Deficit”—thus jobs required just to keep up with the growth of the labor force. As of the end of 2013, we needed to recover 4.19 million jobs. Of these we have now recovered 87 percent, leaving just 13 percent still to recover. Growth in the labor force alone requires us to gain 87,300 jobs every month minimally. Any gains above that number are net gains for the economy as a whole. The graphic above shows us how we are progressing.</div>
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Now for a brief look at where the growth has been most prominent. February job gains divide as follows: The Goods Producing Sectors’ share has been 9.8 percent, Private Service Producing Sectors accounted for 87.8 percent, and Government for 2.4 percent. Retail Trade alone, part of Services, accounted for <i>more</i> jobs than Mining, Logging, Construction, and Manufacturing put together. That does not please <i>me</i> much. And biggest gainer within Services was Leisure and Hospitality. Doesn’t please me much because, for me, a really robust economy is based on Goods Production; but seeing that sector come to dominance again is a bit of an idle dream.<br />
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*This date, thanks to later data revisions, is wrong. It should be April 2014. </div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-7440037386994648862015-02-11T12:55:00.000-05:002015-02-11T12:59:02.318-05:00The Gini Coefficient — But Don’t Run!<div class="MsoNormal">
This post originally appeared, in 2008, on an earlier version of <i>LaMarotte</i>. It is reprinted here without changes.<br />
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The Gini Coefficient measures income inequality in a country—or any region—using a single number. It was created by Corrado Gini, an Italian statistician, in 1912. I’ve know of it for a long time—and it has irritated me at right regular intervals. Why? I was taught by one of my wise elders, then a junior in business analysis, that any number that people produce in such analysis should present all of the data necessary to replicate it with a simple calculator. My guru, who then labored as the chief of statistics for Anheuser Busch, carried his calculator strapped to his suit-belt. He practiced what he preached. But when we look for an explanation, we’re bowled over by references to the Lorenz curve and presented with stuff that looks like this:<o:p></o:p></div>
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<i>G = 1 – 2 ∫<sub>o</sub><sup>1 </sup>L(X)dX</i><o:p></o:p></div>
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The last time this happened to me (yesterday) my irritation produced a determined search for a simple explanation. Therefore I am now prepared to explain the Gini Coefficient in plain language, namely how it is actually calculated and how the data, to be used, must be arrayed for the calculation. I’ll use the following chart using U.S. household data for 2008 for this explanation.<o:p></o:p></div>
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The raw data for this chart, which I’ve taken from this Census Bureau <a href="http://www.census.gov/hhes/www/cpstables/032009/rdcall/1_001.htm"><span style="font-family: "Cambria","serif"; font-size: 13.0pt; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-weight: bold; mso-bidi-theme-font: major-bidi; mso-fareast-font-family: "Times New Roman"; mso-fareast-theme-font: major-fareast; mso-hansi-theme-font: major-latin;">site</span></a>, shows the cumulative share of household income as we proceed from the poorest toward all households, thus from the lowest fifth of all households up the line until all households are included. That is the blue line. Here is the way we must read the chart. The lowest 20 percent of households (lowest quintile), accounts for 3.5 percent of total income. The lowest 40 percent of households (the lowest and second quintile cumulated) account for 12.1 percent of total income… And so on to the last column where—surprise—<i>all</i> households account for <i>all</i> of the income. Clear so far?<br />
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The blue line represents actual results for 2008. The red line, by comparison, shows what the results would be if every group earned exactly the same amount. Not surprisingly, 60 percent of all households, then, would be earning 60 percent of the total income. This is not rocket science either.<o:p></o:p></div>
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Notice now the area surrounded by these two curves. It represents the <i>inequality </i>in income, thus the difference between an <i>ideal</i> and an <i>actual</i> state of affairs. What the Gini coefficient (also called an Index or a Ratio) actually calculates and reduces to a single number is the magnitude of this difference. I’ll present the formula and how its elements are obtained. I have not penetrated deeply enough to explain the formula itself.<o:p></o:p></div>
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To begin with, we make note of the last number—100 percent in our case. We’ll call that T for Total. Next, we calculate a value called Sigma. It consists of the sum of all of the numbers added together—up to but excluding the last. In our case that is 3.5 + 12.1 + 26.7 + 50.9 = 93.2. That is Sigma. Finally we note the number of groups we used in the analysis. We used quintiles, therefore we used five groups. We generalize that number by calling it n. Now we insert these values into the formula used to obtain the Gini Ratio. That formula is:<o:p></o:p></div>
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Gini = 1 – (2 divided by T times Sigma + 1) divided by n.<o:p></o:p></div>
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Translated into numbers, this means Gini = 1 – (2/100 * 93.2 +1) / 5. The result of this calculation is 0.4272. That’s the Gini Ratio. You may encounter it multiplied by 100 for easier readability (here 42.7).<o:p></o:p></div>
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If we apply the same approach to the top line, we have a T=100, Sigma = 200 and the formula becomes Gini = 1 – (2/100) * 200 + 1) / 5. This results in 0. In the ideal case, in other words, there is zero inequality.<o:p></o:p></div>
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Having followed this procedure, we have now generated a single number for each curve and we can therefore compare them. The rule here is: <i>The lower the Gini</i> <i>the more equal is the income distribution.</i> It can’t get any lower than zero–and can never exceed 1. A result of 1 would mean that a single group has <i>all</i> the income and nobody else has <i>any</i>.<o:p></o:p><br />
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Let me follow this up by looking at the Gini Ratio over some period of time. The following graph (its source is <span style="font-size: 11.0pt;"><a href="http://www.census.gov/hhes/www/income/histinc/h04.html"><span style="color: windowtext; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman"; mso-fareast-theme-font: major-fareast;">here</span></a></span>) does that for us for the period 1967 to 2007.<o:p></o:p></div>
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Income inequality, although it rises and falls year to year, has been increasing steadily over the recent forty year history presented above. The Gini is useful especially at this level of macro analysis. It holds a vast amount of detail in a single number. And now that I know how it is obtained, I find it much more acceptable. [For an updated Gini Ratio to 2013, see the previous post here, same date.]</div>
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An additional note. Country to country comparisons using Gini calculation are interesting but not much more than that. Several organizations (the CIA and UN are two) calculate this number for many countries. The U.S. falls generally into the upper ranges of inequality–but not at the very top. To find the peaks, we can single out Brazil and Mexico. China? China’s inequality is just about the same as ours. And Japan’s falls below ours. Bulgaria is hugging the bottom range–at least in the list of countries shown in <a href="http://en.wikipedia.org/wiki/File:Gini_since_WWII.svg"><b><span style="font-family: "Cambria","serif"; font-size: 13.0pt; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: major-bidi; mso-fareast-font-family: "Times New Roman"; mso-fareast-theme-font: major-fareast; mso-hansi-theme-font: major-latin;">this </span></b></a>Wikipedia chart.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-82665644166088123172015-02-11T12:18:00.000-05:002015-02-11T12:22:29.669-05:00Income and Inequality: Update to 2013<div class="MsoNormal">
Back in 2011 I presented here graphics on Household Income (Average and Median) and on Income Inequality (as measured by the Gini Index). Herewith an update of those graphics.</div>
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The data in this chart are in 2013 constant dollars and obtained from <u><a href="http://www.census.gov/hhes/www/income/data/historical/household/index.html">this </a></u>BLS facility (Table H-6, All Races). Median here means that half of all households earn less, half earn more—therefore it is the income at the precise middle of the total earnings range. Note how close average and median are to one another in 1975 ($7,800) and how that difference has grown by 2013 ($20,702)—and this in constant dollars, thus in actual purchasing power. The difference is accounted for by growing income inequality, which brings us to the next chart.</div>
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<a href="http://2.bp.blogspot.com/-GjqGgW0Yz6c/VNuOb2XORNI/AAAAAAAAHZ4/LFd3uYikzVE/s1600/income%2Binequality%2B2013.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-GjqGgW0Yz6c/VNuOb2XORNI/AAAAAAAAHZ4/LFd3uYikzVE/s1600/income%2Binequality%2B2013.png" height="290" width="400" /></a></div>
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In this graphic I reproduce the Gini Coefficient which measures inequality. A Gini Index of 0.0 means absolute equality of all incomes. Therefore the higher the value the greater the inequality. The data for this graphic are from <u><a href="http://www.census.gov/hhes/www/income/data/historical/inequality/index.html">this </a></u>BLS facility; select Income Inequality and then Table H-4. Posts on how the Gini is calculated will be put up here in due time; they were on the old <i>LaMarotte</i> which is no longer accessible.</div>
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Worth noting here is that the Great Recession affected Inequality only briefly, by causing it to drop somewhat between 2007 and 2008—significant numbers of the very rich lost income in the housing crash. The Gini has grown since although, in the 2011 to 2013 period, it has shown signs of lessening. I’ll revisit this picture a year or so later when new data are published. For the time being, the rich are getting richer…. So what else is new?</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-35333441303278573932015-02-10T13:22:00.000-05:002015-02-10T13:22:55.422-05:00Employment Update: January 2015<div class="MsoNormal">
At this time of the year, labor force numbers are presented, by the Bureau of Labor Statistics, in fully revised form—with the revisions reaching years back in time. This year’s revision do not change the overall <i>pattern </i>of developments except in one regard. Numbers for 2014 have been revised upward significantly. In my last report I showed job gains for 2014 at 2.96 million; the revised numbers lift the year to 3.12 million. Since 2014 was better than initially reported, total job losses of 8.7 million (not changed) were recovered earlier (by December 2013) than earlier reported (by May 2014). It took us four years to recover all of the jobs lost in 2008 and 2009. </div>
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Job gains in January 2015 were 257,000, below the (revised) 329,000 (versus last month’s report of 252,000). Therefore the projected annual results for 2015 are presently lower than the actual 2014 results, but it’s early days yet. The January figure this year is better than in all earlier years, except 2012, since the Great Recession.</div>
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Herewith the two charts I usually show—month by month and then annualized. In the second chart, the 2015 figure is a projection.</div>
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Since the economy has, since the end of 2013, almost entirely caught up with job gains needed to support population growth as well (about 80 percent), the motivation for this series is beginning to fade. We are recovering. But it took a long time.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com2tag:blogger.com,1999:blog-7665342107723336257.post-79396214359057572172015-01-19T10:25:00.001-05:002015-01-19T10:26:54.849-05:00Let’s Hear it for the Dollar Store<div class="separator" style="clear: both; text-align: center;">
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The other day I bought some picture frames as part of an on-going picture-hanging exercise caused by a move that, while it seems to have taken place just yesterday, actually already goes back almost seven months. The cost of frames astonished me. I began looking at arts and crafts stores like Michaels and Jo-Ann Fabrics; then, needing smaller frames, I thought I’d find them at CVS. Find them I did, but the cost of these frames was not noticeably lower at the drug store than at the art stores. Then an inspiration came. One of my routes to one of the Krogers we now frequent takes me by a Dollar Store—or, more formally, a Dollar Tree. There I went.</div>
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There I went but—that having been a rather grey sort of day—I was quite convinced that Dollar wouldn’t have any frames. Imagine my surprise when I found a whole rack of them. Moreover, there was actually a yellow sign above them with the word Frames on it. I walked out of there a short while later with ten frames of various sizes. These frames, by the way, were of the same quality, decorative variety, and technical features as those in other stores where, typically, they were priced at multiples of six to twelve of the price I paid here.</div>
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I noticed while in there that the clientele had a large admixture of foreigners, immigrants, and other newcomers to the Land of Plenty. One of them was a big man in middle years who had no English at all. I saw him questioning another man about the whereabouts of—well, he was making shaving motions with his hands. The man he was consulting didn’t know how to deal with the problem and told him to go up front to ask, which that man did not exactly understand. The foreigner, incidentally, had been at the entrance to the store when I went in, hesitating there. Was he building up the courage to enter and encounter American Consumerism for the first time ever? Anyway, I resolved to help the gentleman as soon as I’d picked my last frame. As I headed out, one of the store clerks was coming down the aisle. I asked here where shaving gear was stowed. “You too?” she asked. Evidently she had been told about the problem by someone else and was coming to help my foreign gentleman. All was well. He’d have his razor and his razor blades in just a minute for a mere $1.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-9996499162086831342015-01-16T11:07:00.000-05:002015-01-16T11:07:31.483-05:00Family AnalogyHerewith something I'd published on <i>Ghulf Genes</i> yesterday. It fits this blog too...<br />
<br />
<div class="MsoNormal">
The sophisticated sector of our society, e.g., the media,
don’t much like simplistic analogies. Like, for instance, the notion that our
smallest collective, the family, may be like our greatest, the nation. Yet this
morning such an analogy arose in my mind. The occasion was a headline in the <i>Wall Street Journal</i>: “Gas Savings Not
Spent Yet.” The essence here is that despite good numbers on December retail
spending from private associations, national numbers from the Commerce
Department indicate 0.9 percent decline in retail and food services spending as
compared to November spending. And this despite a huge drop in gasoline costs?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The key word in the headline is that word Yet. The
sophisticated understanding of people is based on an artificial notion of pure
economic rationality. When people have extra money, they <i>will</i> spend it. If they don’t now, soon they will. Nothing else
matters except having money or not having it. There is no future or social
dimension present at all.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
But if we use a “simplistic analogy,” our economic life
today is comparable to the life of a family where mom and dad are at each
others’ throats and hellzapoppin. A sign of that is a story on the next page:
“House Votes to Block Immigration Policy,” just a day after a frosty meeting between
the President and the Congressional leadership to discuss cooperation.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In a family in uproar, the children won’t be jolly. Consumer
confidence is based on many things, not least the bigger atmosphere of the
social whole. And there we have Mom determined to undermine Dad and vice versa.
It’s barely safe to play, with half a mind, behind the couch, while in the
kitchen things are heard to break on the tiled floor.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-87669385376374290882015-01-16T11:01:00.003-05:002015-01-16T11:01:59.752-05:00It Took a While<div class="MsoNormal">
In the earlier version of <i>LaMarotte</i> I’d posted multiple times on my problems with Radio
Shack. Unfortunately that earlier version is no longer up. In any case, the
slow decline of this once very competent retailer has been taking decades;
presumably dissatisfied customers like me have numbered in the multiple
hundreds of thousands. What is amazing about current news, stating that Radio
Shack is preparing to go into bankruptcy as early as February, is how long it
has taken. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Corporate collectives have life times not <i>that</i> much longer than humans. Radio
Shack saw its beginnings in 1921, so it is 94 now. It will presumably live on,
after bankruptcy, for a while anyway until, probably eaten by another one, it
will gradually disappear.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-44522296164995872015-01-09T12:13:00.005-05:002015-01-09T12:13:58.758-05:00Employment Update: December 2014<div class="MsoNormal">
Another year has passed and therefore we have complete numbers for 2014 issued today by the Bureau of Labor Statistics (<u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a></u>). </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I’ve tracked these data on a monthly basis (with two or three skips only) since February 2010. The series, from March 2011 forward, can be found on this version of <i>LaMarotte</i>. My purpose, when I first began, was to see how long it would take the U.S. economy to recover the total jobs lost in 2008 and 2009, the Great Recession, 8.7 million jobs. Well, it took four full years (2010-2013) and five months to recover the lost jobs. After that, from June through the present, the economy has been recovering the jobs lost due to an absence of actual job <i>growth</i> since 2008, a total of 6.6 million jobs. As of December of 2014, we have recovered 22.1 percent of those jobs as well, suggesting that “normal,” meaning <i>status quo ante</i>, will be reached some time in 2015—unless another recession sets in this year.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Now for the December 2014—and the year 2014—results. In December we gained 252,000 new jobs, a healthy number. November had the largest gain in 2015, 353,000 jobs. For the year as a whole, we gained a total of 2.961 million jobs, the best performance since 2010. Graphics by month and by year follow:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-US0sDzVhUZk/VLAL3nliMdI/AAAAAAAAHXM/H3oYgQiI9Rs/s1600/Emp%2BMonths%2BDec%2B2014.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 0em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-US0sDzVhUZk/VLAL3nliMdI/AAAAAAAAHXM/H3oYgQiI9Rs/s1600/Emp%2BMonths%2BDec%2B2014.png" height="290" width="400" /></a></div>
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<div class="separator" style="clear: both; text-align: left;">
</div>
</div>
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<br /></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-rzDeV1pGV8w/VLAMCddb7QI/AAAAAAAAHXU/940AjGk1WYE/s1600/Emp%2BYears%2BDec%2B2014.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 0em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-rzDeV1pGV8w/VLAMCddb7QI/AAAAAAAAHXU/940AjGk1WYE/s1600/Emp%2BYears%2BDec%2B2014.png" height="290" width="400" /></a></div>
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<div class="separator" style="clear: both; text-align: left;">
</div>
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In this report, annual figures all show actual (rather than projected) data. The 2014 total, however, may be (and most likely will be) revised by BLS in February. Given current trends, the revision may very well be upward.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
As we wave good-bye to 2014, the U.S. economy is acting robust and the dollar is strong. Gas prices are at their lowest in a very long time. By contrast, a sense of crisis still wafts over Europe. China’s growth has softened. Japan is still in its now decades-long slump—perhaps showing what the future holds for the global economy. We shall see. My own view is that there must surely be a Third Way—something other than frenetic growth on the upside and abysmall slumps on the other. 2015 may show us which way things will be trending.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-52473090003649741782014-11-15T14:22:00.000-05:002014-11-15T14:22:46.405-05:00Employment Update: October 2014<div class="MsoNormal">
October jobs report by the Bureau of Labor Statistics (<u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a></u>), called The Employment Situation, issued on November 7, 2014. Last month’s result, a gain of 248,000 jobs, was revised upward to 256,000, a gain of 8,000 jobs. And the October result showed a gain of 214,000 jobs. The updated graphic, which also shows other changes in earlier months, amounting to an additional addition of 31,000 jobs, follows:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-hNESRBfP-i8/VGekvQi01XI/AAAAAAAAHTc/UJPUJMk1iNs/s1600/Oct%2B14%2BJobs.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-hNESRBfP-i8/VGekvQi01XI/AAAAAAAAHTc/UJPUJMk1iNs/s1600/Oct%2B14%2BJobs.png" height="290" width="400" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
The net result is continued growth in jobs. This growth was distributed as follows: Goods Producing sectors: 13.1% of gains, Service Providing: 84.6 %, and Government: 2.3%. Within the Services Providing sectors, temporary employment showed a substantial growth of 7.1% of all new jobs added, which is a sour note here. The only sector showing losses was Information, which includes the media, -4,000 jobs.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Herewith a tabulation of gains by each sector, with numbers representing jobs in thousands:<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 4.9pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 305px;">
<tbody>
<tr style="height: 13.5pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td style="border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;">Total nonfarm</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-left: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">214.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 1;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<i><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Total private</span></i><i><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></i></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">209.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 2;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Mining and logging</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">1.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 3;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Construction</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">12.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 4;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Manufacturing</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">15.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 5;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Wholesale trade</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">8.5</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 6;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Retail trade</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">27.1</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 7;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Transportation and warehousing</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">13.3</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 8;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Information</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">-4.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 9;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Financial activities</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">3.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 10;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" valign="bottom" width="241">
<div class="MsoNormal">
<span style="font-family: "Tahoma","sans-serif"; font-size: 9.0pt;">
Professional and business services</span><span style="font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">37.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 11;">
<td nowrap="" style="border-left: solid #AAAAAA 1.0pt; border: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" valign="bottom" width="241">
<div class="MsoNormal">
<span style="font-family: "Tahoma","sans-serif"; font-size: 9.0pt;">
Education and health services</span><span style="font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">41.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 12;">
<td style="border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Leisure and hospitality</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">52.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 13;">
<td style="border-top: none; border: solid #AAAAAA 1.0pt; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 181.0pt;" width="241">
<div class="MsoNormal">
<span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Other services</span><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></div>
</td>
<td style="border-bottom: solid #AAAAAA 1.0pt; border-left: none; border-right: solid #AAAAAA 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64">
<div align="right" class="MsoNormal" style="text-align: right;">
<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">3.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
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<i><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"> Government</span></i><i><span style="color: #333333; font-family: "Tahoma","sans-serif"; font-size: 9.0pt;"><o:p></o:p></span></i></div>
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<span style="font-family: Tahoma, sans-serif; font-size: 9pt;">5.0</span><span style="font-family: Tahoma, sans-serif; font-size: 9pt;"><o:p></o:p></span></div>
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The projection for the year is shown in the next graphic:</div>
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<a href="http://2.bp.blogspot.com/-WZE8Hj5rpcE/VGekyEmYrpI/AAAAAAAAHTo/CnJ5Ddl55mA/s1600/Oct%2B14%2BAnnual.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-WZE8Hj5rpcE/VGekyEmYrpI/AAAAAAAAHTo/CnJ5Ddl55mA/s1600/Oct%2B14%2BAnnual.png" height="290" width="400" /></a></div>
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In this chart actual data are shown for all years except 2014; results for that year are projected based on 10 months of actual data. In the post-recession period, 2014 is shaping up as the best year yet.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-66550083086597316262014-10-23T11:21:00.005-04:002014-10-23T11:22:43.307-04:00Employment Update: September 2014<div class="MsoNormal">
The Bureau of Labor Statistics (<a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a>) issued new employment number on October 3. According to the report, the economy added 248,000 jobs in September. BLS also corrected its August figures, upward, by 69,000 jobs. Therefore the net gain, since the last report, has been 317,000.</div>
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As a percent of total employment, the Goods-Producing sector represented 13.7 percent of jobs and 11.7 percent of gains since August. The Private Service Producing sector accounted for 70.5 percent of total jobs and 83.5 percent of all gains. Government was 15.1 percent of total jobs and 4.8 percent of gains. So the “action” was all in the Service Producing segment. Within that major category, the top three gainers were Professional and Business Services, Retail Trade, and Leisure and Hospitality; they accounted for 60.2 percent of all gains in September.</div>
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The month-by-month chart follows. The orange bar reflects changes made to August numbers in the September report.</div>
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<a href="http://2.bp.blogspot.com/-IT0FK0uasC8/VEkcalFQg8I/AAAAAAAAHSk/jNlJfk57nXw/s1600/September%2B14%2Bmonths.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-IT0FK0uasC8/VEkcalFQg8I/AAAAAAAAHSk/jNlJfk57nXw/s1600/September%2B14%2Bmonths.png" height="290" width="400" /></a></div>
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Data showing annual results and an annualized projection for 2014 are next:</div>
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<a href="http://4.bp.blogspot.com/-BxZf05g2V30/VEkcepmef0I/AAAAAAAAHSw/I_IOQ-9nDT8/s1600/September%2B14%2BAnnualized.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-BxZf05g2V30/VEkcepmef0I/AAAAAAAAHSw/I_IOQ-9nDT8/s1600/September%2B14%2BAnnualized.png" height="290" width="400" /></a></div>
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Last month the 2014 projection was 2.598 million for the year. This month the projection has improve and now stands at 2.732 million. </div>
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In May of this year, the economy recovered the loss of 8.663 million jobs lost in the Great Recession. Since then I’ve been tracking recovery of new jobs <i>not</i> created while we were making up losses. To keep up with the growth in the workforce, a number driven by demographics, we need to created 87,300 jobs every month. Once that number is met, anything in excess may be counted against what I’ve labeled the Growth Deficit. That number stood at 6.635 million in April, just before we caught erased the losses created by the Great Recession. </div>
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As of July, we had already recovered 7.1 percent of that deficit. The numbers were good enough in September to change that recovery rate to 12.3 percent, as shown in the last graphic:</div>
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<a href="http://3.bp.blogspot.com/-JAojywIAQf0/VEkcitaoUCI/AAAAAAAAHS4/eb9U-Uji30E/s1600/September%2B14%2BPie.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-JAojywIAQf0/VEkcitaoUCI/AAAAAAAAHS4/eb9U-Uji30E/s1600/September%2B14%2BPie.png" height="232" width="320" /></a></div>
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Employment is headed in the right direction now, but its “quality” is only so-so. The economy is adding service employment, not least temporary positions; those accounted in September for nearly 8 percent of all new jobs created.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com1tag:blogger.com,1999:blog-7665342107723336257.post-29166559262383689932014-09-06T11:53:00.003-04:002014-09-06T13:23:01.991-04:00Employment Update: August 2014<div class="MsoNormal">
Numbers for August, released by the Bureau of Labor Statistics yesterday (<u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a></u>), produced an interesting mix of reaction. Some observers deplored the results, some suggested that BLS hadn’t gotten them right, yet others pointed out that uneven performance of this indicator is a normal phenomenon.</div>
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The BLS reported that 142,000 jobs were created in August. Those who expected at least 200,000 were disappointed. At the same time, BLS also revised July results downward from 209,000 to 181,000, a loss of 28,000 jobs. Therefore the net gain in August was just 114,000 jobs.</div>
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The Retail sector lost 8,400 jobs—once more underlining that consumer confidence may not be as robust as assumed. The Information sector (read communications media) lost 3,000. Manufacturing employment remained unchanged from July. Mining and Construction both produced fewer jobs than in July. The pattern is familiar by now. The basic industries are still sluggish. All the gains are coming from the Service categories.</div>
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Herewith the monthly chart, with July colored tan to indicate that results for the month were revised downward:</div>
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<a href="http://2.bp.blogspot.com/-hKK_udKXNf4/VAsth1wLl7I/AAAAAAAAHR0/O1lEdOVkZjI/s1600/Aug%2B14%2BMonths.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-hKK_udKXNf4/VAsth1wLl7I/AAAAAAAAHR0/O1lEdOVkZjI/s1600/Aug%2B14%2BMonths.png" height="290" width="400" /></a></div>
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Data showing annual results and an annualized projection for 2014 are next:</div>
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<a href="http://1.bp.blogspot.com/-74fGLxRDieQ/VAstkbYn5gI/AAAAAAAAHSA/y5X880Shr2Y/s1600/Aug%2B14%2BAnnualized.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-74fGLxRDieQ/VAstkbYn5gI/AAAAAAAAHSA/y5X880Shr2Y/s1600/Aug%2B14%2BAnnualized.png" height="290" width="400" /></a></div>
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Last month the 2014 projection was 2.774 million for the year. This month the projection has dropped to 2.598 million because of the July changes and the lackluster August results. The projection for 2014, however, still remains the best since 2007.</div>
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In May of this year, the economy recovered the loss of 8.663 million jobs lost in the Great Recession. Since then I’ve been tracking recovery of new jobs <i>not</i> created while we were making up losses. To keep up with the growth in the workforce, a number driven by demographics, we need to create 87,300 jobs every month. Once that number is met, anything in excess may be counted against what I’ve labeled the Growth Deficit. That number stood at 6.635 million in April, just before we erased the losses created by the Great Recession. </div>
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As of July, we had already recovered 7.1 percent of that deficit. The numbers were good enough in August to change that recovery rate to 8.9 percent, as shown in the last graphic:</div>
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<a href="http://4.bp.blogspot.com/-ZdklGIOC-dw/VAstl0skbgI/AAAAAAAAHSI/rO-0b_HvGb0/s1600/Aug%2B14%2BPie.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-ZdklGIOC-dw/VAstl0skbgI/AAAAAAAAHSI/rO-0b_HvGb0/s1600/Aug%2B14%2BPie.png" height="232" width="320" /></a></div>
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The trend is still positive, but some kind of “new normal” seems to try to deny the eager observers of the economy the triumphant feeling that we’re heading for what we really like: “irrational exuberance.”</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-77702052269416860112014-09-03T11:55:00.001-04:002014-09-03T11:55:10.174-04:00PCE: The Real Measure of Confidence<div class="MsoNormal">
We hear it said quite frequently that Personal Consumption Expenditures represent 70 percent of Gross Domestic Product. Such a rough approximation is false, by and large. The last time the PCE was at or above 70 percent was in the 1929-1939 period, thus roughly coinciding with the Great Depression. Thereafter it dropped into the 50s and has been gradually rising in percentage since, as illustrated in the following table:</div>
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PCE as % of GDP</div>
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Year</div>
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79.9</div>
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1932</div>
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54.9</div>
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1942</div>
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59.7</div>
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1952</div>
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61.6</div>
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1962</div>
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60.0</div>
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1972</div>
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61.0</div>
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1982</div>
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64.5</div>
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1992</div>
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67.5</div>
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2002</div>
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68.0</div>
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2012</div>
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68.1</div>
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2013</div>
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What this tabulation teaches is that PCE is, these days, closer to “two thirds of GDP”—and that when consumer confidence really tanks, the numbers start going up and come close to touching 70 percent. Notice also that the lowest number in that table comes in 1942—when GDP had swollen with expenditures on war. But whether we are nearer 60 or closer to 70 percent, the obvious is staring us in the face. It is what ordinary people <i>spend</i> that makes an economy. And these expenditures are driven by personal necessity and—if PCE is growing at rates above population increase—spending is also driven by personal choice. Such is still the case for this period: the U.S. population grew at a rate of 0.9 percent annually (1999-2013) over against PCE growth at 2.2 percent. (All of the numbers shown here, by the way, are based on real, meaning inflation-adjusted, dollars.)</div>
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When people spend money, corporations begin to hire and invest. When demand is sluggish, the economy—unless artificially stimulated by government expenditures—will reflect the public’s lack of confidence. </div>
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This, of course, suggests that incentivizing corporations—as by keeping interest rates artificially low—only incentivizes speculation, not investment or hiring. Therefore the Fed, and thus monetary policy, is never enough to produce confidence in the real public, which controls two-thirds of the economy, and only stirs up those at the 1 percent level who are into investing and such.</div>
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The following chart shows the relationships between PCE and GDP for the recent 2000-2013 period:</div>
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<a href="http://2.bp.blogspot.com/-tZ4ILnEVjG8/VAc5iIB_fqI/AAAAAAAAHRc/bMnYBW7ZGJM/s1600/PCEGDP.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-tZ4ILnEVjG8/VAc5iIB_fqI/AAAAAAAAHRc/bMnYBW7ZGJM/s1600/PCEGDP.png" height="290" width="400" /></a></div>
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In this period, the GDP generally lags PCE, growing at a lower rate (2.0% 1999-2013 versus PCE which grew at 2.2% in the period). The GDP appears to be <i>waiting</i>; and even when growth of the PCE signals rising confidence, the GDP is following it sluggishly at best. In the most recent survey of consumer confidence, conducted by The Conference Board, Consumer Confidence was up 2.1 points but CEO confidence was down by a point. That illustrates <i>my</i> point. The CEOs are still waiting for a more robust sign of growing public confidence. Meanwhile the markets are reaching new highs—which reflects the confidence of the rootless 1 percent that lives in the clouds.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-79789639946920184272014-08-30T11:34:00.000-04:002014-08-30T11:34:46.872-04:00Growth Tremors in Europe<div class="MsoNormal">
Once more, in the news this morning, gloom and doom (as if we didn’t have enough of that already). The reason for this is that, in Europe, German (-0.6%), French (-0.1), and Italian (-0.8) Gross Domestic Product numbers came in negative for the second quarter compared with the first. The change in Europe’s total GDP was a positive 0.2 percent, but in our day and age positive growth at such low levels is viewed with alarm.</div>
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In our times nobody asks how much growth is necessary in our economies. In other words: What is the underlying measure? The underlying measure, it seems to me, is population growth. Whenever GDP growth exceeds population growth—and the more it does so the more true this is—we are engaged in unnecessary <i>over</i>consumption.</div>
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Just to check this out, I looked to see where European population growth now stands. “Now” in this context is 2012, the last year for which UN statistics are available. That year the growth stood at roughly 0.18 or 0.19 (I’m taking data from a graph). Therefore the Q2 GDP growth in Europe is just a shade <i>higher</i> than actual population growth. The two, in other words, are in equilibrium. I am showing the population graphic below; I found it <u><a href="http://www.carboncommentary.com/2013/07/18/stephen-emmotts-central-mistake-human-population-growth-isnt-out-of-control/">here</a></u>; the data for it come from this UN report (<u><a href="http://esa.un.org/wpp/documentation/pdf/WPP2012_%20KEY%20FINDINGS.pdf">link</a></u>).</div>
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Sooner or later, and all over the world, we will have to adjust to GDP growth rates that match population growth rates pretty closely rather than diverging sharply—as in the graphic that I’m reproducing from a previous post:</div>
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Why? Because the Age of Oil is drawing to a close and we shall be obliged to adjust to the “new normal” eventually. This reasonable projection is simply never seriously pondered by our media which are still convinced that nothing is changing at the basic levels of the world economy. But things <i>are</i> changing. Europe may be ahead of its time and Angela Merkel wise rather than foolhardy in insisting on austerity.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-64464170899825550182014-08-28T10:27:00.001-04:002014-08-28T10:27:13.073-04:00Employment Update: July 2014<div class="MsoNormal">
Since the last Employment Update that I published, for April 2014, three others have been issued by the Bureau of Labor Statistics (BLS), the last one, for July, <u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">here</a></u>. I’ve been diverted from blogging by various changes in our lives, most notable buying and selling houses and, for us, a big move.</div>
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In that period, wouldn’t you know it, in May 2014, to be exact, the U.S. Economy <i>finally</i> erased the job losses produced by the Great Recession in 2008 and 2009. That job loss was 8.663 million jobs, measured as follows:</div>
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In December 2007, total employment stood at 138.35 million. In December 2009, it had dropped to 129.687 million. The difference between these dates is the loss. In May 2014, employment finally reached 138.497 million, therefore just barely exceeding the previous high at the end of 2007. By July of this year, that last Employment Report from the BLS, total employment was 139.004 million, therefore still growing in the right direction.</div>
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An updated chart, showing the economy’s performance since December 2007, follows. Following it is a chart showing total losses and gains, actual for 2007-2013 and an annualized projections for 2014. </div>
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Now that we have recovered the jobs lost in the Great Recession, another process is beginning. It is the creation of new jobs necessary to meet the needs of population increase—to accommodate the growth of the labor force. As I have shown before (<u><a href="http://lamarotte2.blogspot.com/2012/07/new-jobs-and-labor-force-growth.html">here</a></u>), in the 2010-2020 period, we need to add 87,300 jobs <i>every month</i> just to keep up with the population. If we take the period 2008-2013, plus the first four months in 2014 (when we were still just replacing <i>lost</i> jobs), we were building a deficit. The period described is 76 months. The deficit, therefore was 6.635 million jobs as April 2014 ended.</div>
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Since April, we have had job gains in excess of 87,300 every month. In May, with job gains of 229,000, 141,700 jobs (229-87.3) could be counted against call it the accumulated Growth Deficit of 6.6 million jobs. The economy is now in sunnier climes. Therefore in just the May to July period we’ve already managed to recover 7.1 percent of that deficit—rather than adding yet another 87,300 jobs to it—as in the last 76 months. A graphic shows this change.<br />
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Good news, by and large.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-19319895905857684282014-05-02T13:32:00.000-04:002014-05-02T13:32:00.310-04:00Employment Update: April 2014<div class="MsoNormal">
The jobs numbers for April, published today by the Bureau of Labor Statistics (<a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a>), should cheer people on this rainy, overcast day here in the Detroit region. Job gains in April came in at 288,000. In addition, numbers for March were also revised, upward, by 36,000 jobs. Here is the picture to date:</div>
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We are finally out-pacing job growth in 2013. In that year the economy gained 821,000 jobs January through April. In 2014 the equivalent job gains are 866,000. This in turn lifts the annualized projection for 2014 above any year of the recovery (2010-2014). That chart follows:</div>
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The projection for 2014 is made by adding all job gains, dividing the sum by 4 (for four months) and then multiplying that result by 12.</div>
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One result of this modest surging in jobs creation is that we have <i>almost</i> recovered all the jobs lost in the 2008-2009 Great Recession. We’ve recovered 98.9 percent; still 1.1 percent to go. The pie that follows shows the situation graphically.</div>
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Last, a look at how the sectors participated in this employment gain.</div>
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Of fourteen major sectors, two showed loss of employment (Utilities and Information). The last column of the table compares shares, namely share of total employment and share of total gains. Using that technique, we see that eight of fourteen major sectors performed worse, i.e., they gained less than their share of total employment. The worst performer was—again this month—the Government. The best performers were Professional and Business Services and Construction. On to next month…</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-49213863751606461522014-04-05T10:15:00.001-04:002014-04-05T10:15:38.930-04:00Employment Update: March 2014<div class="MsoNormal">
The Bureau of Labor Statistics issued its employment report yesterday (<u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">link</a></u>). BLS reported a gain of 192,000 jobs in March and also revised its February results, lifting February gains from 175,000 to 197,000, an additional gain of 22,000.</div>
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The Media reported these gains with an air of great optimism. The numbers were decent in my eyes too, but not enough to become enthusiastic. In effect, after acknowledging the February upward correction, job gains in March fell below February as shown in the month-by-month chart going back to December of 2007:</div>
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As of March we had gained 682,000 jobs in 2013 and 542,000 in 2014. So we are lagging 2013. Indeed, if we go back to 2012, we’d gained 829,000 that year. The patterns, therefore, suggest sober reflection more than banging of kettles and hopeful stares at the Dow.</div>
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Not surprisingly, translating the current result into the annual projection for 2014, shown in the next graphic, we see that, looking ahead, 2014 looks like it might underperform both 2012 and 2013. I don’t think this gloomy picture will hold. We are improving. Last month the projection was for a total gain of 1.9 million jobs; this month we project 2.2 million. If we have gains like that every month, we’ll be looking fine by December 2014.</div>
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Now a look at changes by sector. The following table shows the details:</div>
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Of fourteen major sectors, one showed loss of employment (Manufacturing) and one zero growth (Government). The last column of the table compares shares, namely share of total employment and share of total gains. Using that technique, we see that six of fourteen major sectors performed worse, i.e., they gained less than their share of total employment. The worst performer was Government (again). The best performers were Professional and Business Services and Construction. The Housing sector seems to be recovering—and that is a good sign indeed. Where Housing goes, there the economy tends to follow.</div>
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Based on the most recently published and updated BLS statistics, we are still shy of recovering the total of jobs lost in 2008 and 2009. We’ve recovered 95.1 percent of jobs lost but still have 4.9 percent to go. That percentage translates to 422,000 jobs. If we keep growing at 192,000 a month, we’ll have caught up in three months.</div>
ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0tag:blogger.com,1999:blog-7665342107723336257.post-48255789396743599212014-03-17T10:15:00.000-04:002014-03-17T10:25:05.829-04:00Employment Update: February 2012<div class="MsoNormal">The employment numbers for February appeared March 7, i.e., as always, on the first Friday of the month, but this time I failed to put them up. The gain in jobs, as reported by the Bureau of Labor Statistics (<u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">here</a></u>), of 175,000 was welcome news after a rather dreary jobs report the month before. Less loudly noted was the fact that the January figure of 113,000 was also revised upward this month by 25,000. Therefore the net gain, since the last report has been 200,000 jobs. The picture looks like this:</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-3H0WYAdmmuM/UycCoiIG_EI/AAAAAAAAG9Q/angfW0wJ3Gw/s1600/EmpFeb14Months.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-3H0WYAdmmuM/UycCoiIG_EI/AAAAAAAAG9Q/angfW0wJ3Gw/s1600/EmpFeb14Months.png" height="290" width="400" /></a></div><br />
</div><div class="MsoNormal"><div class="separator" style="clear: both; text-align: left;"></div></div><div class="MsoNormal">The projected jobs performance for the year 2014, presented in the next graphic, is lower than in any earlier year of the recovery with the exception of 2010. The current pattern, based on two months of data, may change if the economy is bursting with hidden energy that a simple run of bad weather has kept indoors for the time being. We shall see. What I keep wondering about, now that we’ve entered the fifth year of recovery and <i>still</i> haven’t caught up with the 2008-2009 job losses (see below), is whether the old days of soaring consumption will return or not. The One Percent, after all, may have all the money, but they cannot carry the economy entirely on their own shoulders. How many $1,200 handbags <i>can</i> you purchase, after all? Eventually it gets a little boring. We shall see, of course, but in my life, anyway, I’ve never before seen such a doldrums as this one. Facebook and Twitter, we pray that you rush to our rescue.</div><div class="MsoNormal"><br />
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</div><div class="MsoNormal">A look at the performance of the economy’s broadest sectors is provided by the following tabulation:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-5xkNWIWJOy0/UycE53oScKI/AAAAAAAAG9s/TZVhDj3fmRE/s1600/LM+Graphic.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-5xkNWIWJOy0/UycE53oScKI/AAAAAAAAG9s/TZVhDj3fmRE/s1600/LM+Graphic.jpg" height="100" width="400" /></a></div></div><div class="MsoNormal"><div class="separator" style="clear: both; text-align: left;"></div></div><div class="MsoNormal">As in much of the period of the recovery so also in February, the Goods-producing sector gained, in proportion of its total share of employment, fewer jobs than the Services-providing sector. And Government has done worse than either of the others. These days that’s par for the course. The current loathing of anything “public” or “public sector” is certainly not helping keep the nation employed.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-YULsO_0shtg/UycDD7vVceI/AAAAAAAAG9g/bsfSxqQE5yw/s1600/EmpFeb14Pie.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 0em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-YULsO_0shtg/UycDD7vVceI/AAAAAAAAG9g/bsfSxqQE5yw/s1600/EmpFeb14Pie.png" height="145" width="200" /></a></div>Last I present the chart showing how many of the total jobs lost in 2008-2009 we have regained in the four-years-and-counting period since the Great Recession, sort of, faded. The total of jobs lost was 8.663 million; jobs recovered to date are 8.012 million. Almost there but not quite yet. We still have a sliver more to go. Then we can start creating the jobs that simple population increase dictates that we should have created in this same recovery period. Clicking on the image will enlarge it.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">I posted some estimates in the summer of 2012 (<u><a href="http://lamarotte2.blogspot.com/2012/07/new-jobs-and-labor-force-growth.html">link</a></u>) on the jobs that need to be added just to keep up with population growth. For the period 2010-2020 that number turned out to be 87,300 per month—lower, thanks to structural changes in the demographics, especially an aging population, than in 1982-1992, when it was 149,200. Applying that number to the 50-month period since the Great Recession, we see that, as of this month, we should have recovered the 8.7 million jobs lost in 2008-2009 <i>plus</i> 4.365 million due to population growth alone. When my pie finally shows us having regained all of the <i>lost</i> jobs, I’ll start a new one to show how long we have yet to go to recover the number that demand for <i>new</i> jobs that has created since.</div>ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com2tag:blogger.com,1999:blog-7665342107723336257.post-18495015359892278512014-02-07T11:25:00.000-05:002014-02-07T11:26:23.346-05:00Employment Update: January 2014<div class="MsoNormal">
All right, let’s kick off reporting on the employment situation in 2014. We’ve added 113,000 new jobs. At the same time, however, the Bureau of Labor Statistics also published major revisions to its employment series going all the way back to the year 2000. Such changes take place from time to time. The nature of these changes is summarized by BLS thus:</div>
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<span style="font-family: 'Courier New'; font-size: 8pt;">Establishment survey data have been revised as a result of the annual benchmarking</span><span style="font-family: 'Courier New'; font-size: 8pt;"> </span><span style="font-family: 'Courier New'; font-size: 8pt;">process and the updating of seasonal adjustment facto</span><span style="font-family: 'Courier New'; font-size: 8pt;">rs. Also, household survey data </span><span style="font-family: 'Courier New'; font-size: 8pt;">for January 2014 reflect updated population estimates. </span><span style="font-family: 'Courier New'; font-size: 8pt;"><o:p></o:p></span></div>
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The consequence of these changes is that all the numbers I use here (going back to November of 2007) also change. Therefore all the charts you see here have been updated to reflect benchmark adjustments and population estimates. The net effect of these changes, as measured from November of 2007, is to add 110,000 jobs to the labor force. According to the changes, the job <i>losses</i> were greater in the 2008-2009 period (worse by 85,000 jobs) but the recovery has been stronger than reported earlier (better by 195,000 jobs). The net effect is that 110,000 gain over previous reports.</div>
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Looking at the charts, however, the basic pattern has not changed. But as of January 2014, we have now recovered 90.2 percent of jobs lost in 2008-2009—and have 9.8 percent to go.</div>
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The job gains in January, however, are rather anemic at 113,000. If that pattern continues, job gains in 2014 will only be 58 percent of 2013. Such an outcome, however, is highly unlikely. Job gains in January had much to do with wretched weather conditions, a “too much” or “too little” of everything: too many storms, too cold, and too much snow on the one hand and too little water on the other. Everything’s connected—and climate change has its influence on this series too…</div>
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Herewith the revised chart showing monthly change since the end of 2007. Comparing this chart with last month’s shows that the pattern has not been changed by the BLS revisions. The BLS press release on which these data are based is <u><a href="http://www.bls.gov/news.release/empsit.nr0.htm">here</a></u>.</div>
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<a href="http://4.bp.blogspot.com/-2SEuGZX1iTg/UvUDHNxQ8yI/AAAAAAAAG3I/ZkS5GAHjzYY/s1600/Employment+by+Month+January+2014.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-2SEuGZX1iTg/UvUDHNxQ8yI/AAAAAAAAG3I/ZkS5GAHjzYY/s1600/Employment+by+Month+January+2014.png" height="290" width="400" /></a></div>
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As I did last year, so again this year, I am showing, in the following graphic, projected performance in 2014. The projection simply assumes that actual data, as of the time of publication, will be the same for the rest of the year. The formula is total job gains in the year, divided by the number of months covered, times 12. Today’s result is not encouraging but will undoubtedly lift as we plod on.</div>
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<a href="http://2.bp.blogspot.com/-unAEexskYZ8/UvUDQZidvBI/AAAAAAAAG3Q/9YzPqZzlT1M/s1600/Employment+Projection+Jan+2014.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-unAEexskYZ8/UvUDQZidvBI/AAAAAAAAG3Q/9YzPqZzlT1M/s1600/Employment+Projection+Jan+2014.png" height="290" width="400" /></a></div>
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The unemployment rate remains at 6.6 percent. This is a figure I rarely mention because it is based on estimates of the work-force, those actually working and those actively seeking employment. Those who’ve given up are excluded from the work force although, if jobs were available, they would gladly work.<br />
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A positive note for January: employment grew in construction, manufacturing, wholesale trade, and mining. Three of those four growing sectors are basic industry.</div>
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ADhttp://www.blogger.com/profile/06408980212433714362noreply@blogger.com0