Inside the BLS Employment Situation Report
This is my monthly look inside the BLS Employment Situation Report. There are two BLS Surveys: the Establishment and the Household. Establishment surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites. It is taken each month during the week which includes the 12th of the month. Household is a survey of 60,000 households taken each month during the week which includes the 12th of the month.
Each item below is suffixed with (H) if it is from the Household Survey, (E) if it is from the Establishment Survey, and (B) if it is from both.
- Nominal Nonfarm jobs was +204,000. (E). The two previous months' gains were revised to +163,000 (September) and +238,000 (August). Those had been +148,000 (September) and +193,000 (August.) That is a gain (for August and September) of +60,000 from the previous report making the net gain of +264,000 in jobs since the last report.
- the size of the civilian noninstitutional adult population increased by 213,000 in October to 246,381,000 (H).
A very sizable number of people (720,000) left the labor force in October. (H) I am noting here that this makes no sense to me.
With a labor participation rate of 62.8% 133,700 more jobs were necessary to keep pace with population growth. We had 130,300 more jobs added than that including the changes from August and September. (H) The Employment/Population fell from 58.6% to 58.3%.
The Labor Participation Rate fell sharply to 62.8% from 63.2%. It was 63.8% a year ago.
The civilian noninstitutional population is 2,398,000 (H) more than 12 months ago. With a labor participation rate of 63.2% we require 1,506,000 more jobs in the past 12 months to keep pace with population growth. We had 240,000 (H) more folks working. I do not believe that this data indicates anything other that the fact that the Establishment Survey and the Household Survey are simply inconsistent. If the data were accurate then the real (population adjusted) job loss in the last 12 months would be 1,266,000.
- Real (population adjusted) job gain in October was 130,300. This accounts for the changes for August and September. - the Unemployment Rate was 7.279% up from 7.235% in September 2013(B). - Average hourly earnings was $24.10 up from $24.08 in September 2013 (E) - Average work week was 34.4 hours down from 34.5 hours September 2013 (E) - Private jobs were +212,000. Government jobs were -8,000 (E)
-Good producing jobs were +35,000. The two previous months were revised to +27,000 and +20,000 (E)
-The size of the civilian labor force fell from 155,559,000 to 154,839,000 a decrease of 720,000. (H) This number is so "off the chart" that it makes any analysis of the employment situation difficult.
-The labor participation rate (percent of adult noninstitutionalized population who are part of the labor force) fell significantly to 62.8.%. It was 63.8% a year ago. (H) This, not the unemployment rate, is the number which should get everyone's attention. It is this 62.8% of the adult noninstitutionalized population who get pay checks and contribute to GDP.
According to the 4 week moving average of Initial Jobless Claims from 11/7, 1,393,000 people lost their jobs in the prior 4 weeks. That normalizes to 1,509,000 lost jobs in a calendar month (there are about 13 4-week periods in a 12 month year.) This is up from the previous month's 1,321,700 jobs lost/month. The comparative data should not be deemed reliable due to the reporting failures noted during September and October.
In October 2013 BLS measured 4 sets of people entering or leaving the jobs market:
- Job losers and persons who completed temporary jobs was 6,253,000 up 409,000 from previous month's Job Losers and down 283,000 from October 2012. (H)
- Job leavers was 861,000. This includes anyone who retired or voluntarily left working. This down 128,000 from previous month and down 148,000 from October 2012. (H)
-Reentrants was 3,117,000. Reentrants are previously employed people who were looking for a job and found one. This was -128,000 from the previous month and -202,000 from October 2012.(H)
-New entrants were 1,223,000. These are people who never worked before and who are entering the labor force for the first time. This was +1,000 from previous month and -79,000 from October 2012.
One line in the BLS Report is termed "people employed part-time for economic reasons." These are people who want to work full time but their employer, for whatever reason, decide to employ them only part-time. In this month's report there were 124,000 more people working part-time. We may be returning again to the "most of the increase in jobs is part time" headache.
The presentation of the total change in jobs is like looking at the final score of a game. The details tell the story:
- 264,000 more people are working.
- 720,000 fewer people are in the civilian labor force. This is the head scratcher.
The unemployment rate increased 0.044%. We are -1,266,000 real (population adjusted) jobs for the past 12 months. Again, I don't believe this is accurate but more likely reflects inaccurate measurement in the household survey of the number of people employed.
44,400 of the new jobs were in retail. 124,000 were temporary jobs. More that half of the gain in jobs is comprised of temporary jobs.
For me this is a completely confusing report. The headline looks good but the fact that 60% of the headline is in temporary jobs and that 720,000 people left the labor force are of concern. The Household Survey says that 735,000 fewer people are employed. The establishment survey says that 204,000 more people have jobs. The fact that the majority of the gain in jobs in the Establishment survey is in temporary jobs is disconcerting.
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