oldfart
Older than dirt
Posted: Fri Nov 06, 2009 3:10 pm Post subject:
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Well the October BLS numbers are out and it's time for an update. They contain no sign of a turnaround in employment. Non-farm employment dropped 190,000 (estimates were 175,000) and the unemployment rate rose to 10.2% (estimates had been 9.9%). Unemployment reached 15.7 million, more than double the level in Dec 07. Labor force participation rates ramained at 65.1% and the ratio of workers to working age population declined again to 58.5% The official underemployment rate rose steeply from 17.0% to 17.5%.
My favorite benchmark, the diffusion index of employment changes, continued to weaken, the 271 non-farm index falling from an adjusted 16.1 in September to 14.9 in October (the 83 industry index fell astonishingly from 4.9 to 3.6). This means that for every sector that added jobs there are six that lost jobs (1 to 15 in manufacturing!).
Job loss is not as bad as it was earlier in the year, but a continuation of losses at that level would have been catastrophic. There is no truly positive news here, things are only getting worse more slowly. This is a depression on the installment plan.
If I were optimistic, I would predict GDP growth in the fourth quarter, technically ending the "recession" but continued net job losses at least until the middle of next year. My prediction of unemployment topping at 10.5% now appears on the low side and I would put the top at 10.5--11.0%. Employment reaching 2007 levels will not occur until 2013 and adjusting for population growth, we will not see an employment to population ratio in the range we are accustomed to until perhaps 2015 or even later.
Jamie
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Well the October BLS numbers are out and it's time for an update. They contain no sign of a turnaround in employment. Non-farm employment dropped 190,000 (estimates were 175,000) and the unemployment rate rose to 10.2% (estimates had been 9.9%). Unemployment reached 15.7 million, more than double the level in Dec 07. Labor force participation rates ramained at 65.1% and the ratio of workers to working age population declined again to 58.5% The official underemployment rate rose steeply from 17.0% to 17.5%.
My favorite benchmark, the diffusion index of employment changes, continued to weaken, the 271 non-farm index falling from an adjusted 16.1 in September to 14.9 in October (the 83 industry index fell astonishingly from 4.9 to 3.6). This means that for every sector that added jobs there are six that lost jobs (1 to 15 in manufacturing!).
Job loss is not as bad as it was earlier in the year, but a continuation of losses at that level would have been catastrophic. There is no truly positive news here, things are only getting worse more slowly. This is a depression on the installment plan.
If I were optimistic, I would predict GDP growth in the fourth quarter, technically ending the "recession" but continued net job losses at least until the middle of next year. My prediction of unemployment topping at 10.5% now appears on the low side and I would put the top at 10.5--11.0%. Employment reaching 2007 levels will not occur until 2013 and adjusting for population growth, we will not see an employment to population ratio in the range we are accustomed to until perhaps 2015 or even later.
Jamie
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