UNEMPLOYMENT IN MAY | BLS Release Due Friday, June 5

June 3, 2020—On April 26, President Trump's economic adviser, Kevin Hassett, said that the U.S. unemployment rate will approach levels that occurred in the Great Depression. The Bureau of Labor Statistics releases the unemployment rate for May on Friday morning, June 5.

What was the peak unemployment rate during the Great Depression? It was approximately 26 percent in the second quarter of 1933—after the NBER reports that the formally defined Depression was over, as shown in the shaded area in the FRED chart below, covering the years from the second half of 1929 to the end of 1942.

Source: St. Louis Federal Reserve Bank, FRED chart, Unemployment rate, 1929-1942.

So how and when will we know whether this is a Second Great Depression or a Second Great Recession? One way is to watch the payroll numbers and ADP has reported a drop of 2.8 million jobs in May. That would ordinarily be a big shock, but when analysts were expecting a loss of more than 8 million jobs, it is a relief.

Mark Zandi of Moody's Analytics went so far as to say that the Covid-19 Recession is already over barring serious policy errors or a "second wave" of the virus. He also warned that recovery will be slow.

One problem with the numbers that are being reported by the Bureau of Labor Statistics (BLS) is that many workers believe they will get their jobs back when commercial enterprises are reopened. They are not working but are not looking for work while the pandemic is still in place.

Just to review how the BLS does its work: It contracts with the Census Bureau to do a monthly national phone survey. The Census Bureau asks someone in each surveyed household how many people are employed and how many are unemployed, i.e., not working and looking for work. The two numbers together are called the "workforce." The unemployment rate is the number of unemployed divided by the workforce. Although the sample is approximately 50,000 households per month, the surveyed population is a scientific sample to represent the nation and the numbers are extrapolated to counties and the nation.

We can despair of the numbers or look more closely at the range of unemployment numbers that the BLS now reports, as shown in the chart below covering the data through April 2020. These numbers provide information on how long people have been unemployed and whether some people are omitted because they have left the workforce for retirement, for care of children or seniors or disabled family members, or for study. (The current recession is being called a "Shecession" because so many female workers need to stay home from work to care for their children in Covid-19 conditions when schools are closed and using paid child care becomes more risky.)

Measure	Apr. 2019	Dec. 2019	Jan. 2020	Feb. 2020	Mar. 2020	Apr. 2020
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force	1.3	1.2	1.2	1.2	1.2	1.1
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force	1.6	1.6	1.6	1.7	2.4	13.2
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)	3.6	3.5	3.6	3.5	4.4	14.7
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers	3.9	3.7	3.8	3.8	4.7	15.1
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force	4.5	4.2	4.4	4.4	5.2	16.0
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force	7.3	6.7	6.9	7.0	8.7	22.8

Source: BLS, release of May 7, 2020.

Some of those who believe they are only temporarily unemployed will actually not find their job waiting for them. Their employer may not be able to weather the period of closure. New announcements appear daily of retailers and restaurants and drinking places that will not reopen. At the end of the Payroll Protection Plan (PPP), which is keeping some workers off the unemployment rolls, will the employer still be there, and ready to keep everyone on the payroll, or will post-Covid business reorganizations mean there will fewer customers or different employee needs? (The PPP was originally passed for eight weeks and today the House-passed bill to extend PPP to 24 weeks was passed by the Senate.)

The PPP is an approximation of the German Kurzarbeit (short-time working), which subsidizes up to 60 percent of salaries (67 percent for workers with dependent children) if employers maintain their payrolls in a recession or a drop in sales. The German subsidy does not require a special authorization; it is an automatic stabilizer. The program has spread to 20 percent of the German workforce, is considered highly successful and has been copied in at least six other European countries.

If we use the official unemployment number, U-3, April showed a rate of 14.7 percent. If we pay more attention to U-6, the unemployment rate in April was 22.8 percent.

What will the May unemployment number look like? The official U-3 rate may be kept lower by retirements, according to an April study, but the April U-3 number was more than 8 percentage points higher than the study predicted.

(Hat tip to Dr. Jurgen Brauer and Geoffrey Hilton for reviewing this post and making suggestions.)

JOBS BY STATE | Every state lost jobs. CA, NY, TX lost the most.

This map is interactive at the source (BLS).

May 22, 2020—In April 2020, jobs (nonfarm payroll employment) decreased in every one of the 50 states and in the District of Columbia.

The most-affected states were primarily ones with more population and more density.

States with Largest Job Losses

The three states with the largest job declines were California, New York and Texas.

California lost 2.34 million jobs, New York lost 1.83 million (more precisely, 1,827,300 net nonfarm payroll jobs) and Texas lost 1.30 million.

The three states with the largest percentage loss of jobs were Michigan, Vermont and New York. Michigan lost 22.8 percent of its jobs. Vermont lost 19.6 percent and New York lost 18.8 percent. See Tables E and 3 of the Bureau of Labor Statistics release this morning.

Which Sectors Lost the Most Jobs in New York State?

The hardest-hit industry sector in New York was Leisure and Hospitality, which lost, between March and April 2020, 548,500 jobs, or 64.1 percent of all of its payroll jobs in New York State. This of course reflects Governor Andrew Cuomo's well-advised shutdown order.  Health care workers and teachers jobs declined by much less, only 10.9 percent. Financial and information services, and government, appear to have maintained their staffing, presumably through use of the Internet.

Industry	March	April	Decline	Percent decline
Mining and Logging	4.8	4.8	0.0	0.0
Construction	383.8	234.1	149.7	39.0
Manufacturing	435.9	355.3	80.6	18.5
Trade, Transport, Utilities	1,513.0	1181.5	331.5	21.9
Information	275.8	267.5	8.3	3.0
Financial Activities	700.5	685.6	14.9	2.1
Professional and Biz Svces	1,373.1	1178.3	194.8	14.2
Educational, Health Svces	2,182.1	1944.9	237.2	10.9
Leisure and Hospitality	855.9	307.4	548.5	64.1
Other Services	411.6	291.1	120.5	29.3
Government	1,500.1	1438.9	61.2	4.1
Total	9,636.6	7,889.4	1,747.2	18.1

Source: BLS data (first two columns), computations (second two columns) by CityEconomist. The BLS payroll data by state are not seasonally adjusted.

Over the past twelve months (April 2019 to April 2020), New York lost 1,904,900 payroll jobs. In April, New York’s private sector lost 1,764,600 private payroll jobs compared with March, and over the past twelve months it lost 1,845,700 private payroll jobs.

Trajectories by State

Imperial College of London has published a tracking report for each U.S. state that shows how the trajectory of outbreaks diverges. At the time of release, 24 states, mostly in the midwest and south, had “uncontrolled” outbreaks, meaning the reproduction (infection) rate of the virus was above 1.

Unemployment by State

The unemployment rate in April rose to the highest level in Nevada, 28.2 percent, followed by Michigan, 22.7 percent, and Hawaii, 22.3 percent. The rates, which are seasonally adjusted, set new series highs in 43 states. All state series begin in 1976. The information is from the Bureau of Labor Statistics this morning, along with an interactive map of state unemployment rates.

Unemployment rates in Hawaii and Nevada exceeded their previous series highs by more than 10.0 percentage points each. Connecticut had the lowest unemployment rate, 7.9 percent. All together, 27 states and the District of Columbia had unemployment rates lower than the national average of 14.7 percent and 10 states had higher rates (the other 13 state rates were not significantly different from that of the nation). This information is in Tables A, B and 1 of the BLS release.

In April, the largest unemployment rate increases occurred in Nevada (+21.3 percentage points), Hawaii (+19.9 points), and Michigan (+18.4 points). Rates rose over the month by at least 10.0 percentage points in an additional 17 states. The smallest over-the-month jobless rate increases occurred in Nebraska (+4.3 percentage points) and Connecticut (+4.5 points). This information is from Table C in the BLS release.

The largest unemployment rate increases from April 2019 occurred in Nevada (+24.2 percentage points) and Hawaii (+19.6 points), and Michigan (+18.4 points). Another 21 states experienced increases of 10.0 points or more. The smallest over-the-year rate increases occurred in Connecticut (+4.2 percentage points) and Minnesota (+4.9 points). See Table D in the BLS release.

New York's unemployment rate rose by 10.4 percentage points to 14.5 percent in April. New York’s labor force participation rate fell to 58.3 percent in April from 60.2 percent in March.

TECH JOBS | Is Tech an Ally or Threat to Wall Street? (A Dialogue)

Tech Jobs vs. Wall Street Jobs (The American Banker, One Year Ago, March 16, 2017)

One year ago the American Banker displayed the chart at left, suggesting that tech jobs were in competition with many Wall Street jobs.  

Greg David recently in his Crain's blog expressed appreciation for the growth of tech jobs in New York City, as a diversification of highly paid employment within NYC. 

The following unedited (except for formatting) dialogue on this topic between Edward Greenberg, an attorney in New York City, and me were posted as comments on the Crain's blog and are re-posted here by permission of Mr. Greenberg. 

An underlying question is whether tech jobs are substitutes for Wall Street jobs, as indicated in the chart above, or are complementary.

Will more use of technology in the financial sector

• Strengthen Wall Street? 
• Hollow out its employment base?
• Permit financial jobs to migrate to other cities?

Edward C. Greenberg 
Response to Greg David, March 1, 2018

Very nice news but for context – there are 80,000 (2/3 of NYC's) such "defined" jobs in Los Angeles, a city with less than 1/2 the population of NYC. The population of the LA metro area is 13.5 million and NYC's is 20.3 million.

LA is not considered a "tech hub" like Northern Ca or even Boston. So while the number of tech jobs in NYC sounds like, and is in fact, good news, it is being employed by our politicos for their own PR purposes. By NOT comparing these figures to other major cities the figures become distorted and not indicative of anything that our politicos can take credit for.

Forbes does not list NYC in its top 10 cities for tech job growth. It does list cities like San Diego, Raleigh, Nashville (metro area) and Jacksonville, FL (where there has been a 72.4% increase in tech jobs from 2001 to 2017.

Every new job in NYC is good news but other cities are doing better in attracting these type businesses and jobs. If NYC "rests on its fake laurels" it will continue to fall behind other cities in attracting these jobs.

The author is spot on regarding the amorphous "definitions" employed to define tech sector and "eco-system" jobs. A coffee shop across the street from Google HQ which serves Google employees is clearly part of the tech "eco-system".

John Tepper Marlin
Response to Edward C. Greenberg, March 1, 2018.

I agree that understanding the significance of the tech sector in New York City requires comparing New York with other cities. The New York City Comptroller's Office did this in 1999, just before the way the job numbers are aggregated was changed.

In addition, the idea that Wall Street should be pitted against the tech sector as a source of jobs misses a big part of the story, which is Wall Street's need for tech support and tech's dependence on Wall Street

An MIT Professor solemnly told me 20 years ago that New York City could never catch up with Boston as a source of startups servicing financial institutions. MIT was developing “aggregators” that would, he said, soon be collecting financial information from individuals and assembling them in one place, across platforms. That process is taking longer than he predicted.

Meanwhile, New York City financial technology jobs have been growing because Wall Street wants these vendors close by. Those high-frequency traders have to be nanoseconds from their platforms.

Wall Street and NYC tech workers stand or fall together. NYC's preeminence in the financial world of the next decade depends on both.

The 1999 NYC Comptroller's report on the growth of tech jobs noted the difference between counting tech occupations and tech-oriented companies. The data-counting problems are too great to opt for one or the other. The problem is with the aggregation process. We depend on the BLS for data, and the BLS makes it hard to count payroll local jobs by claiming that disclosing information would allow researchers to get down to the company level and discover proprietary information.

It is sad for that reason that BLS moved many research functions out of New York City to Boston (and Philadelphia). NYC's 1911 Triangle Fire gave rise to the Labor Department and New York City was one of the earliest research centers on job data. Senator Ted Kennedy was reportedly active in promoting the move of BLS staff positions moved from New York to Boston.

A good understanding of how financial and technology jobs interface is important to New York City. It is also important to the country. We need more and better research on what is happening to jobs in the intersection between finance and technology.

Edward C. Greenberg 
Response to John Tepper Marlin, March 1, 2018


Agreed – with one key addition.


Lots of traditional Wall St, banking and financial service jobs moved from NYC to NJ, FL, S. Dakota and Utah. The concept of "geographic proximity" is rapidly becoming an anachronism. The notion that an NYC company would have "back office personnel" 500-1,500 miles from Gotham was unthinkable 25 years ago. Today it is the norm.

The Internet did not come into meaningful public use until the 1980's; computer driven trading came in about the same time. Pick up a WSJ, NYT, Forbes, Fortune or The Economist from the era. Try to find one that remotely predicts the manners of business and locations of major insurers, banks and stock trading which would exist in 2018.

Geography as a factor will soon be entirely irrelevant. Gothamites still don't believe the number of companies and jobs in these sectors moving to or already located in FL, TX and various other flyover states most of which New Yorkers have never set foot in. Did your buddy use the term "near shoring" in 1999? Betcha a beer he didn't.

John Tepper Marlin 
Response to Edward C. Greenberg, March 7, 2018

Yes, geography is less relevant than it used to be. But no, geography will never be irrelevant, even to technology. The way in which it is relevant is changing.

One of the strengths of the United States is that we have many strong population centers that are highly interconnected. New York City's greatest strength has been its ability to lead the country in finance and communications. This in turn pulled in many corporate HQs.


Financial institutions have always used every means of communication they could. Before the telegraph, they used carrier pigeons as well as horseback couriers.


Today, I'm not in New York City (I'm away from the nasty Northeastern weather) but I feel as much in touch as if I owned a huge flock of carrier pigeons or a large staff of messengers operating on routes dotted by inns with stables.


I still rely heavily on face-to-face meetings – especially when it comes to meeting new people. Personal contact may actually be more likely to mislead than seeing what someone writes, but some part of us wants to see people talk.


What is changing since 1999 is that many businesses have learned how to reduce the need for continuous face-to-face contact. Work at home, control from a remote location, and conference calling are all functioning more widely and reliably than they first did.


The natural duopoly of newspapers and bankers, and their centralization in financial centers (my great-grandfather edited Holland's then-greatest newspaper in Amsterdam, founded on family links among bankers and newspapers), survived the introduction of the telegraph and the radio. It has also survived the creation of the Internet.


We have seen recent stories about Silicon Valley's entrepreneurs seeking new locations because of high costs and inefficiencies, and the growth of new tech centers in the Midwest.


This decentralization is a good thing for the United States, even if it creates challenges for New York City. Instant reporting and high-frequency and program-driven trading is vulnerable to cyber-malfunctions, accidents or cyberattacks. After 9/11, companies built huge physical back-office locations in readiness for a need to move. It made sense to decentralize.

Geography is still relevant because cyberspace still depends on interruptible physical computers and power generation.

Edward C. Greenberg 
Response to John Tepper Marlin, March 7, 2018

You make some excellent points but if history teaches us anything it is that centers of power and commerce change for good or ill and many become irrelevant or disappear entirely.

Nobody predicted the Detroit of 2008 in 1960 or 1970. The notion that Pittsburgh would not be a steel producer by the late 20th century was predicted by no one in the years after the war. There was no mention of the Internet in any business or general circulation publication in 1960. Buffalo and Newark have 1/2 the populations today that they had in 1960. Who predicted 30 years ago that Jacksonville, Fl, Utah, S. Dakota and other places would be centers of banking, finance, insurance and credit transactions?

The ten most populous American Cities in 1960 were:

1 New York, New York 7,781,984.
2 Chicago, Illinois 3,550,404.
3 Los Angeles, California 2,479,015.
4 Philadelphia, Pennsylvania 2,002,512.
5 Detroit, Michigan 1,670,144.
6 Houston, Texas 938,219.
7 Baltimore, Maryland 929,024.
8 Cleveland, Ohio 876,050.
9 Washington, District of Columbia 783,956.
10 St. Louis 750,000.

Nobody predicted that by 2010 the above list would morph into:
1 New York City, New York 8,175,133.
2 Los Angeles, California 3,792,621.
3 Chicago, Illinois 2,695,598.
4 Houston, Texas 2,099,451.
5 Philadelphia, Pennsylvania 1,526,006.
6 Phoenix, Arizona 1,445,632.
7 San Antonio, Texas 1,327,407.
8 San Diego, California 1,307,402.
9 Dallas, Texas 1,197,816.
10 San Jose, California 945,942.

Cleveland, Baltimore, Detroit, St. Louis “disappeared". Jacksonville, Fl had a population of 201,000 in 1960 and 907,000 in 2017. Not even the town fathers saw that coming and as a result the city has been on a years-long road building project to handle the daily commuters.

Predictions of future development of population movements and industries in the US have been historically wrong. No expert, urban planner, or politician foresaw the dominance of e commerce, the existence of Facebook, Apple, Amazon or the abundance of indigenous oil/natural gas during the gas crisis of the 1970s. The Dec. 3, 1973, cover of Time Magazine, "The Big Freeze", featured a lengthy scientific article about the earth's temperature decreasing and the coming of a new ice age. This expert prediction came before the catalytic converter was required for autos, which were spewing exhaust 5 times dirtier than current cars which burn cleaner fuels. Trucks were then burning dirty diesel, and there was extensive burning of coal to generate electricity.

What odds do you think you would have received by making a bet in 1970 that in 2018, the fastest-growing states in America would be in order: Idaho, NV, Utah, Washington, FL, AZ, TX, CO, Oregon and S. Carolina (10th). Six of those states are clearly not in the sunbelt.

So, I understand your well-made points but society and business moves so fast in the 21st century that the day when geography plays little to no role in most (not all) business is already upon us. One need only visit or do business with companies in places like Miami, San Diego any major TX city and a few dozen others to see how fast NYC is becoming old by comparison. If NYC's mass transit system continues to disintegrate and employ equipment nearly 100 years old, businesses and residents will accelerate the on going trend to depart. Daily 2-hour commutes have become unnecessary and unacceptable to workers, entrepreneurs and others who have options to avoid the cost and misery of driving, buses, trains and/or subways.

The number of businesses, artisans and professionals who have left NYC and have benefited economically stands as daily proof that while in the real estate business location is everything, in the business and artistic worlds.... not so much anymore.

JOBS | Average Increase Nov-Jan, 192,000

Nonfarm Payroll (BLS)

Total nonfarm payroll employment rose by 200,000 in January. However, the net increase in total nonfarm payroll employment was revised down for November-December:

• The November increase was revised down from 252,000 to 216,000.
• The December increase was revised up from 148,000 to 160,000.
• The net change was that gains in payroll jobs in November and December combined were 24,000 fewer than previously reported.
• After revisions, job gains averaged 192,000 per month over the last 3 months. A moving average is more reliable for payroll job changes. Each month, prior data is revised based on additional reports and recalculation of seasonal factors. Noise in the reported numbers is especially likely during the annual BLS benchmark process at the end of each  year.

Employment continued to trend up in construction, food services and drinking places, health care, and manufacturing:.

• Construction added 36,000 jobs in January, with most of the increase occurring among specialty trade contractors (+26,000). Employment in residential building construction continued to trend up over the month (+5,000). Over the year, construction employment has increased by 226,000.

• Food services and drinking places employment continued to trend up in January (+31,000). The industry has added 255,000 jobs over the past 12 months.

• Health care continued its long and steady record of adding jobs in January (+21,000), with a gain of 13,000 in hospitals. In 2017, health care added an average of 24,000 jobs per month.

• Manufacturing continued to add jobs (+15,000). Durable goods industries added 18,000 jobs. Manufacturing has added 186,000 jobs over the past 12 months.

• Other major industries were little changed, including mining, wholesale trade, retail trade, transportation and warehousing, information, financial activities, professional and business services, and government.

The average workweek for all employees on private nonfarm payrolls declined by 0.2 hour to 34.3 hours in January. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime remained at 3.5 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.

In January, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.74, following an 11-cent gain in December. Over the year, average hourly earnings have risen by 75 cents, or 2.9 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.34 in January.

The January unemployment rate was 4.1 percent for the fourth consecutive month. The number of unemployed persons was 6.7 million, changed little over the month. Full data are at www.bls.gov. Among major worker groups, the unemployment rate for Blacks increased to 7.7 percent in January, and the rate for Whites declined to 3.5 percent.

In January, 1.7 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 451,000 discouraged workers in January, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.2 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.

SUFFOLK, NY | Disappointing 1Q17

Suffolk County, N.Y.

The first-quarter county data came out from the Bureau of Labor Statistics this morning (http://bit.ly/2wFDNPd), showing how Suffolk County is doing on jobs and wages.

Average employment in the county rose 0.6 percent, up slightly from the first quarter of the previous year, but not as much as most other counties. Suffolk ranked #259 out of 347 large U.S. counties, on the edge of the bottom quartile.

Manhattan jobs, by comparison, rose 1.3 percent, closer to the median county average. Brooklyn jobs rose 3.2 percent, which ranks #34, in the top tenth of the large counties.

Suffolk average wages rose 5.1 percent, ranking #260 out of the 347 counties, which puts it in the bottom quartile. In Manhattan, by contrast, wages rose 6.3 percent, again putting the county in the middle of the ranking.

JOBS | March Disappoints (Updated Apr 8, 2017)

The 1990s saw steady job growth with Bill
Clinton and in 2009-2016 with Obama.
Sources: BLS, FRED (St Louis Fed).

March 7, 2017—The BLS reported this morning on the March jobs data.

Total nonfarm payroll employment rose by only 98,000 in March, following gains averaging 217,500 in January-February 2017.

Professional and business services continued to grow (+56,000), as did mining (+11,000). These are good-paying jobs:

• Services to buildings and dwellings (+17,000) and architectural and engineering services (+7,000) did well. 
• Most of the gain in mining occurred in support activities (+9,000). Mining employment has risen by 35,000 since a recent low in October 2016.

However, retail trade lost jobs (-30,000). Competition from the Internet is likely hurting bricks-and-mortar retailers. Employment in general merchandise stores declined by 35,000 in March and has declined by 89,000 since a recent high in October 2016. The good news is that with higher levels of technology the jobs that remain are better paid.

Health care continues to create jobs, as it has for decades, added 14,000 in March, with gains in hospitals (+9,000) and outpatient care centers (+6,000). In the first 3 months of this year, health care added an average of 20,000 jobs per month, compared with an average monthly gain of 32,000 in 2016.

Financial activities, the best-paying jobs, continued to trend up in March (+9,000) and jobs in the sector have increased by 178,000 over the past 12 months.

Construction employment changed little in March (+6,000), following a gain of 59,000 in February. It has been trending up since late last summer, largely among specialty trade contractors and in residential building.

Postscript (Saturday, Apr 8, 2017)

Neil Irwin in The New York Times today (p. B2) says that "it was a mistake" for Trump to point out the strong growth in jobs in February, because he drew attention to a number that in March didn't work out so well for the new administration.

Irwin goes on to say that payroll jobs are not the best economic indicator...

What? Trump promises more jobs, and he shouldn't focus on the monthly job numbers? I have been working with the job numbers for a long time, and I don't think Irwin is correct in advising the President to shift attention away from them, certainly not at this early stage.

Trump's biggest campaign commitment was to "Jobs, Jobs, Jobs". The number he has to beat is payroll jobs as shown in the chart below. Sure, these numbers are revised periodically, but they are the coin of the realm. BLS collects job numbers from each state based on unemployment insurance filings within each state. If a monthly number is out of line, it gets looked at more carefully. These numbers are well grounded.

Irwin's two alt monthly job numbers, by contrast, are not so well grounded—

• Yes, the employment/population number is a good way of comparing long-term job-creating performance, because it eliminates issues involved in unemployment questions asked of the survey respondents in each sampled household. ("Who is not working? Have they been recently looking for work?") It is more resistant to survey-question creep. But the denominator, population, is not a reliable number for month-to-month comparisons.
• No, probably, to Irwin's proposal to pick age groups within the employment/population ratio. It would require tagging each unemployment insurance report with a year of birth and dividing the monthly job change according to age groups. Maybe this could be done—or the numbers could be estimated based on a sample—but will the new information be worth the effort? Might be something for a state government with a strong Unemployment Insurance staff to experiment with.
• Yes, finally, tracking wages is indeed important. We know that real wages over the long term have been falling in manufacturing as American factories compete with lower-wage supplies in other countries. But the real hourly earnings of private-sector employees is an aggregate of many different private-sector stories and is less useful for measuring the President's progress toward his stated goal than the aggregate job numbers. A rise in wages may simply reflect fewer jobs in a low-paying industry and more jobs in a higher-paying industry. The quarterly census of jobs and wages is conducted only quarterly and is published with a substantial lag that diminishes the value of the numbers. (But better late than never, and better late than inaccurate.)

Related Posts

Phony Numbers? . Job Numbers for Trump to Beat . Economic Hotspots

Job Growth by Month since the post-Glass-Steagall Meltdown of 2008.

JOBS | Retail Continues Strong in January 2016

The employment-to-population ratio has been
recovering. Source: BLS, Feb. 5, 2016.

Nonfarm payroll jobs rose by 151,000 in January, a falloff from the better months of late last year, the BLS announced this morning. Jobs continued strong in retail trade, food services and drinking places.

Despite a falloff in services–where job growth has for many years been more reliable than in manufacturing–health care continues strong as hospitals continue to grow. Credit the graying of America. Manufacturing has also shown good growth.

The bad news is concentrated in private educational services, transportation and warehousing. Mining jobs continued to decline, as the oil industry continues to suffer from the 70 percent drop in the price of oil compared with the peak in 2014.

Retail trade added 58,000 jobs in January, despite Walmart's report that it would close 269 stores worldwide, which translates to an eventual loss of 10,000 jobs.  Jobs grew by 15,000 in general merchandise stores, by 9,000 in electronics and appliance stores, by 8,000 in motor vehicle and parts dealers, and by 7,000 in furniture and home furnishing stores. Over the past 12 months, employment in retail trade has increased by 301,000, with motor vehicle and parts dealers and general merchandise stores accounting for nearly half of the gain. The death of brick-and-mortar retailers seems to have been exaggerated–in fact Amazon is planning to open its own brick-and-mortar outlets.

Other industries:

• Food and beverage establishment jobs rose 47,000 in January, bringing the total for the past 12 months to 384,000 jobs.
• Health care continued to add 37,000 jobs in January, with most of the increase, 24,000 jobs, being in hospitals. Health care has added 470,000 jobs over the past 12 months, two-fifths in hospitals.
• Financial activities rose by 18,000 jobs in January, the largest growth area being a 7,000-job increase in credit intermediation and related activities.
• Private educational services lost 39,000 jobs in January due to larger than normal seasonal layoffs. This sector has been plagued by revelations of debts and disappointments among students in delivery of value by some technical training programs promising good jobs at the end of the training.
• Transportation and warehousing decreased by 20,000 in January, mostly reflecting the most vulnerable job sector–couriers and messengers–whose numbers dropped by 14,000 in January after growing rapidly in the last two months of 2015.
• Professional and business services jobs rose by 9,000 after growing by 60,000 in December. The subcategory of professional and technical services continued to surge, adding 25,000 more jobs in January. Jobs in temp services rose more than the seasonal adjustment in December and fell by the same number in January.
• Manufacturing added 29,000 jobs in January, following little employment change in 2015. Over the month, 11,000 jobs were added in food manufacturing, 7,000 in fabricated metal products, and 3,000 in furniture and related products.
• Mining, which includes petroleum extraction, continued to decline by 7,000 jobs in January. Jobs peaked in this industry in September 2014 and have since fallen by 146,000 jobs (17 percent). More oil companies that over-invested in exploration are expected to go bankrupt.

JOBS | U.S. Boom Amidst Global Gloom

U.S. Job Growth Higher in December,
Unemployment still 5%. But will weak
 demand from overseas be exacerbated
 by a stronger dollar?

The just-released BLS jobs report for December [link is to the BLS News Release] shows payrolls rose by 292,000 in December. The good news will be much appreciated as Asia and Europe suffer from slack demand and pessimism.

Upward revisions for October and November reinforced the labor market strength in December, producing an average growth of 284,000 over the last three months, up from an average of 221,000 per month for the full year 2015.

Economists Underestimated December Growth. A Reuters survey of economists released an hour before the BLS data showed an average expected growth figure of approximately 200,000 new jobs.

With the upward revisions in the prior two months, that number was way off. Reuters should probably stop publishing predictions that will be contradicted within an hour. (How useful are they, really? To users and to those involved in the exercise?)

The U.S. "Misery Index" Is a Tiny 5.4 percent. We should be so happy. The unemployment rate in December was 5.0 percent for the third month in a row as inflation remains low– the November Consumer Price Index for all Urban Consumers (CPI-U) rose only 0.4 percentage point, seasonally adjusted, compared with November 2014.

Industry Detail. Professional and business services added 73,000 jobs in December, with nearly half the gain from growth in temporary help services, which rose 34,000. In 2015, employment in professional and business services increased by an average of 50,000 per month, not much below the 59,000-a-month figure in the strong year 2014.

Construction showed strong job growth for the third consecutive month. Health care also continued to add jobs in December and showed an even stronger year in 2015 than the year before. Employment in food services and drinking places increased by 37,000 in December, another bright spot.

Motion picture and sound recording industries added 15,000 jobs in December, offsetting a decline
in the previous month. Employment rose among couriers and messengers. Other sectors changed little.

Labor Market. Among people who were neither working nor looking for work in December, 1.8 million were classified as marginally attached to the labor force, down from 2.3 million a year earlier. The number of discouraged workers, a subset of the "marginally attached" who believed that no jobs were available for them, was 663,000 in December, little different from a year earlier.

The labor force participation rate, at 62.6 percent, has shown little change in recent months. The employment-population ratio, at 59.5 percent, has also changed little. The BLS has published a little noted article in December by Steven F. Hipple on the drop in the U.S. labor force participation rate since 2000. BLS counts people who are neither working nor looking for work as “not in the labor force.”  From 2004 to 2014, the percentage of such people has increased, reducing the labor force participation rate. Data from the Current Population Survey (CPS) and its Annual Social and Economic Supplement (ASEC) provide some insight into why people are not in the labor force. In the ASEC, people who did not work at all in the previous year are asked to give the main reason they did not work.

Interviewers categorize survey participants’ verbatim responses into the following six categories:

• ill health or disabled; 
• retired; 
• home responsibilities; 
• going to school;
• could not find work; and 
• other reasons. 

A quick summary of Hipple's article is: Between 2004 and 2014, all of these factors came into play, and a single factor goes a long way toward explaining what is happening–the aging of the work force. More workers are becoming disabled or retiring, at the same time as workers withdrawing from the labor force continue to cite the other reasons.

FOMC | Jobs Soar, Rate Hike Likely, But *100%*?

Payroll jobs in October exceed prior
months and forecasts.

The BLS reported this morning that nonfarm payrolls rose 271,000 in October, with a slight drop in unemployment to 5 percent.

The payroll-job increase was well above the 185,000 increase forecast by economists who do that kind of thing (a foolhardy activity, since a forecast on Thursday will definitely be proven wrong on Friday).

Caution: There will be another jobs report in early December before the FOMC meets in mid-December. But Bill Gross says there is a "100% chance" that the FOMC raises rates in December, regardless of the December jobs report.

The October increase is exceeds the 137,000 increase in September and a similar number in August, and paves the way for a December increase in the federal funds rate, which would be the first such move since the zero-bound level set in December 2008.

The Fed Funds rate has been at the zero bound for 7 years.

In January 2009 I posted a comment on the December 16, 2008 decision by the FOMC after hearing from Laurence Meyer, former Vice Chairman of the Fed.

Meyer recommended that the Fed take a long vacation, but I am pretty sure he didn't mean a vacation that would last this long.

The average monthly job growth for the three months August-October is about 150,000, well below the 210,000 per month first-half-2015 average.

The potential for a rate rise has pumped up the dollar to one-month high against the British pound and a three-month high against the euro.

Here are links to the BLS data:

Payroll employment rises by 271,000 in October; jobless rate essentially unchanged (5.0%)

Total nonfarm payroll employment increased by 271,000 in October, and the unemployment rate was essentially unchanged at 5.0 percent. Job gains occurred in professional and business services, health care, retail trade, food services and drinking places, and construction.

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