U.S. Bureau of Labor statistics:
Employment Situation:Economic News release
The Civilian Non-institutional population represents all citizens over age 16 eligible to be employed. This measures the flow of workers entering the job market and those retiring.
–Current: 239.49 million; up 176,000 from last month; up 1.8 million in the last 12 months (from 237.69 million).
Employment is a moving target. In a healthy economy, around 60% of those newly eligible look for employment, so about 125,000 jobs a month or 1.5 million new jobs per year must be filled just to keep the unemployment rate stable.
The Civilian labor force represents employed and unemployed workers actively looking for work.
–Current: 153.42 million; down 272,000 from last month; down 26,000 in the last 12 months (from 153.68 million). **Exactly the same size as April.
–Employed workers: 139.33 million; down 445,000 from last month; up 242,000 in the last 12 months (139.09 million).
–Unemployed workers: 14.09 million;up 173,000 from last month; down 506,000 in the last 12 months(14.59 million).
–Civilian population not in the labor force: 86.07 million; up 449,000 from last month; up 2.06 million in the last 12 months (84.01 million).
At the start of the recession, 62.7% of the population was employed. Currently it is 58.2%.
–Unemployment rate (Civilian labor force unemployed workers) returned to 9.2 (9.181) percent due to a combination of the significant drops in both the Civilian labor force (-272,000) and those employed (-445,000). This is almost the same number of workers (+449,000) that are no longer in the labor force (perhaps retiring) and not replaced.
Nonfarm payroll employment represents the Civilian labor force in selected industries (does not count farm workers).
–Current: 131.02 million; up 18,000 jobs from last month; up 1.036 millionin the last 12 months (129.98), increased by 1.77 million since the February 2010 low (129.246 million).
Private sector employment represents nonfarm payroll employment (not counting government workers).
–Current: 108.95 million; up 57,000 jobs from last month; up 1.69 millionin the last 12 months (107.26).
Government employment represents federal, state and local government employment.
–Current: 22.064 million; down 39,000 jobs from last month; down 659,000in the last 12 months (22.723).
Bottom Line:
What happened?
Reports released a day ahead of the Labor Department’s monthly survey of the jobs market predicted that Friday’s survey results would show that the economy added 100,000 jobs to nonfarm payrolls in June, up from a 54,000 gain in May. They certainly did not forecast a rise in the unemployment rate, that edged up AGAIN to 9.2 in June from 9.1 percent in May and from 9.0 percent in April.
Those pre-Friday reports were based on the Labor Department news that initial claims for unemployment benefits declined by 14,000, to 418,000, as of July 1. Payroll giant ADP said its own monthly survey showed that the private sector added 157,000 jobs in June.
Nigel Gault, chief United States economist for IHS Global Insight, said he raised his prediction for the June payroll numbers to 140,000 added jobs, from 100,000 after the better-than-expected ADP report, predicting a gain of 165,000 private sector jobs and a loss of 25,000 government jobs.
According to the government’s previous monthly report, hiring did decrease in May, on a variety of factors that economists had seen as temporary, such as higher gas prices and the effects of cuts in the supply chain from the March disasters in Japan.
“We clearly slowed on an underlying basis in the second quarter,” said Gault, referring to overall economic growth. “All the surveys showed a clear slowing in activity, and consumer spending growth is much slower, and there is no housing market recovery.”
“It took a while before we actually saw that reflected in the payroll numbers, and it seemed to hit us all at once in May. Maybe June will show a better number than May, indicating that some of these headwinds are starting to ease.”
Then came Friday —
Economists were stunned. They had been expecting job growth to strengthen in June. But instead, the monthly snapshot of the labor market showed that several key industries shrank, along with leading indicators like wages and the length of the average workweek.
Jobs are a lagging economy indicator, meaning that new business planning, funding and activity happen first, followed by hiring of employees occurring many months later after confidence improves, and business opportunities that require new staffing.
The agonizingly slow growth out of recession is confounding economists, spooking consumers and disheartening job seekers. Friday’s report forced analysts to re-examine their assumption that the economy would strengthen in the second half of 2011.
The Friday Labor report showed workers’ hourly pay fell in June and they worked fewer hours. Those who wanted work and were underutilized; either unemployed, settled for part-time jobs or had given up looking for work – rose to 16.2 percent of the civilian labor force from 15.8 percent in May.
Temporary jobs are decreasing — headed in the wrong direction for economic recovery.
There were 8.5 million part-time workers who wanted, but couldn’t find, full-time jobs; 28 million in jobs they would have quit under normal conditions; and an additional 2.68 million who wanted work but couldn’t find any and dropped out of the labor force.
One problem is that after slashing jobs during this Great Recession, employers are still reluctant to replace them. They’ve learned to squeeze more work and revenue out of reduced staffs. Productivity and corporate profits have soared. But companies are afraid to add workers until they’re confident that consumers are spending enough to support higher sales.
Sophisticated software allows managers to analyze changes in their businesses minute-by-minute so they can postpone hiring until they’re certain they need more workers.
Housing and construction would normally fuel a recovery. Lower interest rates would draw home buyers into the market. Increased demand would encourage builders to hire construction workers and put up new houses. This time, however, home prices are continuing their drift downward as banks dump foreclosed homes on the market to minimize their losses. The downward drift continues to shrink homeowner’s equity from positive to negative, making it harder to sell and break even, encouraging thoughts of foreclosure, and fueling the downward spiral.
Lower-paying industries like retail made up 23 percent of jobs lost but almost half of the recent job growth, indicating workers are accepting jobs paying significantly less than former ones.
In the ‘jobless recovery’ after the 2001 recession, high-paying industries accounted for nearly one-third of new jobs in the year after the recession ended.
Even in this recession, about 4 million people a month have been landing jobs. We don’t see the impact because more have been losing or leaving their jobs, leaving the work force with fewer people employed.
Retail stores are under continuing pressure to trim their expenses to keep prices low, and labor, the biggest expense after inventory, is one of the few costs they can control. The impending federal law expanding health insurance coverage could make jobs even harder to get.
One of the problems is that workers who find jobs cannot count on keeping them for a long time. Workers may land temporary jobs advertised as permanent jobs, dependent on the winds of business fortunes, with shifting schedules making it difficult to get a second job to supplement family income.
Small businesses that employ half of the country’s private sector workers, are still struggling to break even even as big companies are seeing record profits. But small businesses are more willing to add jobs when they need them.
Large businesses are showing more profits than small businesses, because they have better access to credit markets and export channels where some economies are growing faster than ours.
Additionally, larger businesses are spending more on automation to eliminate jobs. Dan Mishek, managing director of Vista Technologies in Vadnais Heights, MN said, “Everything should be as automated as it can be. We just can’t afford to compete with countries like China on labor costs, especially when workers are getting even more expensive.”
According to Mishek, hidden costs of hiring for his company, in addition to the expenses of salary and benefits are the days it takes to cull through the storm of resumes from people who are not qualified or who never worked in the industry; the scheduling of interviews, the additional $150 cost for each drug test; and the cost of their federally mandated safety program to be completed before the months of training with reduced productivity for both the trainer and trainee.
Even so, there is a clear trend emerging that tomorrow’s jobs will require people to add more value than ever before.
And now, the final extension of jobless benefits (maximum 99 weeks) is scheduled to conclude at the end of this year. A handful of states have already cut off weeks 80 through 99 for their claimants, citing economic studies that show people who collect unemployment benefits are less likely to look for or accept work until their benefits are close to running out.
“Unemployment insurance extends the typical amount of time that people will spend off the job and not looking for work,” said Chris Edwards, an economist at the Cato Institute, a libertarian organization.
But for many of the 7.325 million (as of July 2) workers collecting unemployment benefits, those payments are keeping them afloat.
One worker, approaching the end of her benefits said she “is determined to find work before her benefits run out and plans to expand her search to include light industrial manufacturing.” “It’s getting close to the end,” she said. “And I got to do what I got to do.”
There are close to 3 million jobs available in the work force, but the higher paying ones require training. And it can be difficult for individuals to know which field to train for next. Even a trained professional in career directions like the head of Workforce Solutions admits that focusing on biotech, green energy and video games is really just an educated guess for industries that seem poised to grow.
Three of the six occupations that are expected to grow the most by 2018 according to government data are customer-service representatives, food-service workers and retail salespeople. Retail is expected to create twice as many positions as software and computer-application engineering.
Nationwide, the job market segments where opportunities are currently increasing the most are transportation (64 percent), manufacturing (56 percent), media (40 percent) and information technology (39 percent).
We can ask why with so many jobs available there are so many unemployed? It’s partly because of the greater geographical dispersion of the unemployed, and partly because of the skill mismatch between the job and locally unemployed applicants.
Workers have become suburbanized. In the 1960s or even the 1980s, the unemployed organized around their local welfare or unemployment offices, especially in the cities. It was a fertile environment to notice the throngs of anxious unemployed – people tired of waiting for hours in line. Today, with internet access, they are not so visible.
And how willing is a worker or his family willing to pull up roots and move where the jobs are? For families with roots in an area, with children in school and a spouse with local employment, with a house they cannot sell and no guarantee that the job will last; not so much.
The political essence of the situation is that the unemployed are a relatively small constituency of elected officials, who tend not to vote anyway. In both the 2008 and 2010 elections, only 35 percent of the unemployed eligible to vote did so, and that makes them more or less invisible and not to be feared by policy makers.
Besides, right now, the policy makers in Congress are embroiled in a deficit limiting struggle, ready to destroy the country to prove their point. The American people are far from their minds. I’m marking my calendar to replace as many of them as possible.
One of the major points in that bitter debate is that the federal debt is primarily responsible for the persistent joblessness that began with the 2008 recession. However, there has never been any evidence that the federal debt has played a role in unemployment, but it doesn’t stop politicians from lying about it in the hopes that Americans are not smart enough to recognize the lie.
The unemployment numbers have remained high because of weak consumer demand and stagnant wage growth, along with a mismatch between jobs and job skills. Republicans have long tried to link unemployment and debt so that they can blame the president for the poor economy, and build support for their run for the White House next year.
There is plenty of evidence, in fact, that the spending cuts already imposed by Republican stubbornness are responsible for a great deal of joblessness. Although the nonfarm private sector added 57,000 jobs in June, that tiny progress was reduced by the 39,000 jobs shed by federal, state and local governments, much of which came from education. As David Leonhardt noted in The New York Times, cutbacks in state and local spending have cost the economy about a million public-sector jobs over the last two years, in part because the federal stimulus program, bitterly opposed by Republicans, ended too soon and that led to the spectacle of Republicans condemning the crisis that they helped to create and are refusing to fix.
To the president’s credit, he has talked about a step that would work — investing money in rebuilding the country. But the debt ceiling and spending reduction ideas in negotiation would make that investment much less likely by limiting public infrastructure improvement with the associated employment spending at exactly the moment when the spending is needed most.
One of the reassuring things is that over time, workers and companies are pretty good at figuring out the most productive ways to get together. In the short term, though, the transition can be a struggle and a challenge to American worker flexibility.
The long term course is to create jobs by providing a product or service that’s better than what’s out there; in other words, to create jobs, start by creating something people are willing to pay for.
For this month, the Conference Board shows that the:
- Consumer Confidence Index® (short-term outlook) decreased to 59.5 from last month’s 60.8 (1985=100).
- Present Situation Index (optimism or pessimism about current conditions such as unemployment) decreased to 35.7 from last month’s 39.3 rating.
- Expectations Index (optimism or pessimism about future conditions) increased to 75.4 from last month’s level of 71.6 on American optimism.
Nonfarm payroll employment gained 18,000 jobs in June. Previous month changes were: May (+25,000); April (+217,000); March (+194,000); February (+235,000); January (+68,000); December (+121,000); November (+93,000); October (+210,000); September (-24,000; Census workers -136,000; net -112,000); August (-57,000; Census workers -114,000; net +57,000); July (-66,000; Census workers -143,000; net +77,000); June (-175,000; Census workers -225,000; net +50,000).
Census workers peaked at 564,000 workers in May 2010.
The quarterly average nonfarm payroll job data has three-month averages at: April through June (+86,667); January through March (+165,667); October through December (+141,333).
Between January 2007 and December 2009, 6.9 million workers were displaced from jobs they had held for 3 years or more. By January 2010, 49 percent of them were reemployed, but not necessarily in the same industries they had worked before.
Average weekly hours and overtime
The average workweek for production and non-supervisory employees employees remained consistent at 33.6 hours;average hourly and weekly earnings decreased slightly to $19.41 with weekly earnings at $652.18.
These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring.
The number of persons working part time for economic reasons in non-agriculture industries (sometimes referred to as involuntary part-time workers) increased by 4,000 to 8.55 million. These persons had their hours cut back to 34 hours or less (-28,000) or could only find part-time work (-7,200).
The number of persons not in the labor force but marginally attached to the labor forceincreased by 474,000 to 2.68 million.These are workers who wanted and were available for work, and had looked for work sometime in the last 12 months. They had not looked for work in the last 4 weeks and so were not considered part of the labor force. This number is up from 2.59 million a year ago.
Among the marginally attached workers, the number of discouraged workersincreased by 160,000 in the current month to982,000. These are persons no longer looking for work.
This number has decreased by 225,000 from a year earlier.
Long-term unemployed persons (jobless for 27 weeks and more) increased by 89,000 to 6.29 million this month. This is more than 4.8 times the number at the start of the recession in December 2007 (1.3 million). In 2009 alone, 3.5 million were added to that number. 44.6% unemployed persons are in this category or nearly 4.1% of the work force.
The average duration of unemployment has increased to 39.9 weeks. A year ago it was 34.8 weeks. At the start of the recession the average length of unemployment was 16.6 weeks. Half of the unemployed regain employment in 22.5 weeks.
The long-term unemployed number is down by 421,000 workers since the May 2010 high of 6.71 million.
Unemployment spreads stayed relatively the same with the highest among teenagers (24.5%), followed down by African-Americans, then Hispanics. The lowest unemployment started with Asians (6.8%), followed up by Adult women (8.0%), Whites then Adult men (9.1%).
Construction lost 9,000 jobs in June. Previous month changes were May (-4,000); April (+4,000); March (+5,000); February (+30,000); January (-32,000); December (-16,000); November (-2,000); October (+4,000); September (-11,000); August (+34,000) reflecting 10,000 workers on strike in July who returned to work; July (-2,000); June (-21,000).
The quarterly average construction job datahas three-month averages at: April through June (-3,000); January through March (+1,000); October through December (-4,667).
Currently, there are 5.513 million construction jobs, an increase of 2,000 from a year ago (5.511 million). In December 2007, there were 7.5 million.
Manufacturing gained 6,000 jobs in June. Previous month changes were May (-2,000); April (+28,000), March (+20,000);February (+33,000); January (+49,000);December (+14,000); November (+15,000); October (-4,000); September (-6,000); August (-26,000); July (+32,000); June (+13,000).
The quarterly average manufacturing job data has three-month averages at: April through June (+10,667); January through March (+34,000); October through December (+8,333).
Currently, there are 11.7 million manufacturing jobs, an increase of 159,000 from a year ago (11.55 million). In December 2007, there were 13.73 million.
The Institute for Supply Management said manufacturing activity expanded for the 23rd consecutive month with new orders and production modestly up. The ISM manufacturing index (PMI) read 55.3, the second reading below 60 for 2011 and the past 12 months. A reading above 50 indicates growth, and a PMI above 42 percent over a period of time indicates an expansion of the overall economy.
Of the 18 manufacturing industries, 12 are reporting growth led by Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Paper Products. .
Retail trade gained 5,200 jobs in June. Previous month changes were May (-4,300), April (+64,100); March (-5,600);February (-8,100); January (+27,500);December (+2,800); November(-15,600); October (+38,200); September (-3,900); August (+6,400); July (+11,100); June (-20,500).
The quarterly average retail job data has three-month averages at: April through June (+21,667); January through March (+4,600); October through December (+8,467).
Currently, there are 14.537 million retail trade jobs, an increase of 128,700 from a year ago (14.408 million). In December 2007, there were 15.57 million.
Professional Business Services gained 12,000 jobs in June. Previous month changes were May (+45,000); April (+45,000); March (+75,000);February (+44,000); January (+31,000);December (+54,000); November (+85,000); October (+40,000); September (+28,000); August (+38,000); July (-5,000); June (+33,000).
Professional and business services consist of legal, accounting, management consulting, administrative and support services. In hard times, they are the first to be trimmed. In recovery, the jobs grow in these fields, as employers emerge from survival mode.
The quarterly professional business services job data has three-month averages at: April through June (+34,000); January through March (+50,000); October through December (+59,667).
Currently, there are 17.168 million professional business servicesjobs, an increase of 485,000 from a year ago (16.683 million). In December 2007, there were 18.05 million.
This is one of the largest job growth fields.
Temporary help services (a subset of Professional Business Services) lost 12,000 jobs in June.Previous month changes were May (-1,700); April (-5,400); March (+30,000); February (+22,700); January (-11,400); December (+38,100); November (+26,800); October (+27,200); September (+27,300); August (+22,500); July (-6,700); June (+11,200).
The quarterly temporary help services job data has three-month averages at: April through June (-6,367); January through March (+13,767); October through December (+30,700).
Currently, there are 2.228 million temporary help services jobs, an increase of 152,400 from a year ago (2.076 million). In December 2007, there were 2.56 million.
Temporary hiring is the first step to permanent hiring as employers see if revenues justify the extra help.
Educational Services lost 17,400 jobs in June. Previous month changes were May (-10,400); April (+6,200); March (-2,500);February (+4,000); January (-100); December (+5,400); November (+6,800); October (+25,000); September (-7,900); August (+9,700); July (-1,600); June (+7,500).
The quarterly average educational services job data has three-month averages at: April through June (+4,400); January through March (+467); October through December (+12,400).
Currently, there are 3.18 million educational servicesjobs, an increase of 34,500 from a year ago (3.15 million). In December 2007, there were 2.98 million.
Health care and Social Assistance gained 17,400 jobs in June. Previous month changes were May (+28,000), April (+34,000); March(+36,000);February (+36,200); January (+12,900);December (+27,900); November (+30,900); October (+42,100); September (+34,200); August (+31,300); July (+27,800); June (+22,600).
The quarterly average health care and social assistance job data has three-month averages at: April through June (+26,467); January through March (+28,367); October through December (+33,633).
This is one of the largest job growth fields.
Currently, there are 16.74 million health care and social assistancejobs, an increase of 353,300 from a year ago (16.39 million). In December 2007, there were 15.58 million.
Government employment (federal, state, local, U.S. Postal Service) lost 39,000 jobs in June. Previous month changes were May (-48,000); April (-24,000); March (-25,000); February (-30,000); January (-14,000); December (-18,000); November (-35,000); October (+17,000); September (-136,000); August (-144,000); July (-183,000); June (-236,000); May (+381,000).
The quarterly average government employment (federal, state, local, U.S. Postal Service) jobs have been dropping (except for the Census bubble) over the last nine months and has three-month averages at: April through June (-37,000); January through March (-23,000); October through December (-12,000).
Currently, there are 22.064 million jobs, a decrease of 659,000jobs from a year ago (22.723 million). In December 2007, there were 22.38 million.
Federal government (except U.S. Postal Service): Currently, there are 2.204 million jobs, an decrease of 324,000 jobs from a year ago (2.528 million). In December 2007, there were 1.97 million.
U.S. Postal Service: Currently, there are 626,400 jobs, a decrease of 30,100jobs from a year ago (656,500). In December 2007, there were 781,300.
State governments education: Currently, there are 2.384 million jobs, an increase of 14,800 from a year ago (2.369million). In December 2007, there were 2.33 million.
State governments (excluding education): Currently, there are 2.707 million jobs, a decrease of 57,700 from a year ago (2.764 million). In December 2007, there were 2.81 million.
Local governments education: Currently, there are 7.88 million jobs, a decrease of 159,200 from a year ago (8.04 million). In December 2007, there were 8.05 million.
Local governments (excluding education): Currently, there are 6.263 million jobs, a decrease of 103,300 from a year ago (6.366 million). In December 2007, there were 6.43 million.
Employment explained
To restore employment to the 5.5% level, 5.65 million workers will have to regain their job or start new a job.
The government and economists foretell that the “normal” unemployment rate will move up to 8% from its current 5.5% level.
To get to the 8% level, 1.81 million workers need jobs. 12.273 million workers will still be unemployed under the new standard.
The Civilian labor force has decreased in the past 12 months by 263,000, but normally grows at the rate of 1.5 million new workers per year. At 8%, 120,000 workers each year will be added to the unemployed, driving that number constantly higher.
Unemployment is a moving target that can only be battled with new industries and local jobs.
Our recession history of unemployment:
| Rate | Unemployed | 2009 | Rate | Unemployed | 2010-2011 |
| % | (millions) | % | (millions) | ||
| 10.0 | 15.3 | December | 9.7 | 15.0 | Jan, Feb, Mar, May 2010 |
| 10.0 | 15.4 | November | 9.9 | 15.3 | April 2010 |
| 10.1 | 15.7 | October | 9.5 | 14.6 | June, July 2010 |
| 9.8 | 15.1 | September | 9.6 | 14.9 | August 2010 |
| 9.7 | 14.9 | August | 9.57 | 14.76 | September 2010 |
| 9.5 | 14.7 | June | 9.7 | 14.9 | October 2010 |
| 9.4 | 14.5 | May, July | 9.8 | 15.1 | November 2010 |
| 8.9 | 13.7 | April | 9.4 | 14.5 | December 2010 |
| 8.6 | 13.2 | March | 9.0 | 13.9 | January 2011 |
| 8.2 | 12.5 | February | 8.9 | 13.7 | February 2011 |
| 7.7 | 11.7 | January | 8.8 | 13.54 | March 2011 |
| 9.0 | 13.75 | April 2011 | |||
| 9.05 | 13.91 | May 2011 | |||
| 9.19 | 14.087 | <= current June ’11 | |||
| 8.0 | 12.3 | <= Government target 8% | |||
| 5.5 | 8.45 |
<= my target 5.5% |
Over the last 12 months, net 242,000 jobs were filled in the Civilian labor force, but if you are unemployed, the rate is 100%..
Where are the jobs?
It comes as no surprise that the occupations with the largest job growth in 2008 and projected to 2018 are in the fields of network systems and data communication and all aspects of the medical field, followed closely by financial examiners (accountants, auditors, etc.).
The largest job growth fields also include office and administrative support jobs, sales and service jobs, teachers and jobs in construction and transportation.
Education and employment go hand in hand.
The following table shows that unemployment is consistently greater for those with less education. It also shows that workers over 55 (women more than men) are more likely to remain employed).
| Employed |
Unemployment by Education Level |
|||||||
| (millions) | Pct | Not grad HS | Only grad HS | Some college | College degree | Men | Women | |
| Dec 2007 | 146.173 | 5.0 | 7.8% | 4.7% | 3.9% | 2.1% | 3.2% | 2.9% |
| Dec 2008 | 143.188 | 7.4 | 11.2 | 7.8 | 5.9 | 3.7 | 5.2 | 4.3 |
| Dec 2009 | 137.792 | 10.0 | 15.3 | 10.5 | 9.0 | 5.0 | 7.9 | 5.8 |
| Dec 2010 | 139.206 | 9.4 | 15.3 | 9.8 | 8.1 | 4.8 | 7.2 | 6.2 |
| June 2011 | 139,334 | 9.18 | 14.3 | 10.0 | 8.4 | 4.4 | 7.9 | 6.3 |
| Dec-June | +242K | -0.2 | -171K | +39K | +91K | -148K | +149K | +11K |
The Census Bureau surveys 60,000 households across the country to insure an accurate demographic survey. This translates into about 110,000 individuals. All the counties and county-equivalent cities are grouped into 2,025 geographic sampling units. 824 of these units are selected to accurately represent the entire population of the United States. For a detailed explanation, see the BLS Handbook of Methods.
Each month, one-fourth of the interviewed households are rotated out. They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever.
Each month, 2,200 highly trained Census Bureau employees conduct interviews in the sample households for information on labor force activities (job holding and job seeking) or non-labor force status of household members.
This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 153.4million workers in the Civilian labor force. A monthly total census would be cost-prohibitive.
Questions are specifically formulated so that neither the interviewer nor the persons interviewed decide their labor force classification. This prevents the sample from being distorted by respondents providing answers based on their opinion or what a “right” answer should be.
The basic concepts of employment are:
|
1. |
People with jobs are employed |
|
2. |
People who are jobless, looking for jobs and available for work are unemployed. |
|
3. |
The sum of people employed or unemployed constitute the Civilian labor force. |
|
4. |
People who are neither employed nor unemployed are not in the Civilian labor force. |
|
5. |
People who are either institutionalized in a facility (correctional, residential nursing or mental health) or on active duty with the Armed Forces are not counted. |
The unemployment rates are extrapolated from the survey results.
The quoted unemployment rate excludes people who have stopped looking for work because they believe no jobs are available (discouraged workers) and others outside the labor force. They are counted separately.
The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment. He hopes to create about 3.5 million jobs. Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8%.
The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.
The president sent The Small Business Jobs and Wages Tax Cut to Congress on January 10, 2010 to try to stimulate more hiring. It focused on small businesses, because as the president stated, “Over the past fifteen years, small businesses have created roughly 65 percent of all new jobs in America.” The proposal included:
-
Businesses will receive a $5,000 tax credit for every “net” new employee that they employ in 2010, capping at $500,000 per firm (and $250,000 for new firms) to ensure that the majority of the benefit goes to small businesses.
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Small businesses will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. Specifically, firms that increase wages, expand hours or hire new workers would get a credit against the added payroll taxes that result. This bonus would be based on Social Security payrolls, up to the individual taxable maximum of $106,800.
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Firms can claim the credit on a quarterly basis, returning money quickly to businesses, providing an early incentive to hire and increase payrolls.
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The Recovery Act tax incentives will be extended for depreciation of capital spending.
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There will be increased loan guarantees from the Small Business Administration (SBA), and an elimination of SBA fees.
- There will be increased investments in roads, highways, bridges and other construction, and grants to state and local governments to create jobs and avoid layoffs
President Obama noted that this proposal would be worked into the various other proposals that have already advanced in Congress, such as The HIRING Act of 2010 and The Jobs for Main Street Bill of 2010.
Because the Troubled Asset Relief Program (TARP) program (signed into law by President George W. Bush on October 3, 2008) cost much less than expected. Originally expected to exceed $300 billion, the Congressional Budget Office (CBO), as of December 10, 2010 estimates the program will cost only $25 billion, freeing up more than $200 billion to pay for other parts of the jobs program, without increasing projected federal deficits.
As of Jun 15, 2011,
$486,559,098,013has been awarded
$402,735,853,415 (82.77%) has been paid out to the states
Read: How the Stimulus Is Changing America
Recession histories:
Total unemployment peaked at 15.7 million (10.1%) in October 2009 rising from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009.
Payroll employment decreased by 4.5 million jobs in 2009, wiping out all the jobs created in the private sector over the last decade.
With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%.
The approach that time, however, was to fix the economy at the expense of the worker.
Some compare the fall in employment to 1974-1975 and 1981-1982. If the comparison is accurate, the peak in unemployment may be reached within the next four to five months (past performance is no guarantee of the future).
Economist William Polley made a chart that includes every recession since World War II. It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.
William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak.
Using the Department of Labor unemployment tables of unemployment rates and 5.5% as the “normal” rate of unemployment, I have analyzed things a little differently. Of course, along the way, the Civilian labor force increases, so the percentages represent ever more workers.
The following table shows unemployment start dates, peaks and returns to the normal rate of 5.5%, Civilian labor force in millions of workers for that year, and the lengths of times from the start date in months:
Recession peaks 1974-2011:
| Millions | Pct | Labor | Growth | Recession Period | ||
| Unemployed | Force | Length | ||||
| Start | July 1974 | 5.5 | 91.9 | |||
| Peak | May 1975 | 8.4 | 9.0 | 10 mos | ||
| Return | May 1979 | 5.6 | 104.9 | 14.1% | 4 yrs 10 mos | |
| Start | May 1979 | 5.6 | 104.9 | |||
| Peak | Nov 1982 | 11.9 | 10.8 | 3 yrs 6 mos | ||
| Return | Apr 1988 | 5.4 | 121.6 | 15.9% | 8 yrs 11 mos | |
| Start | Nov 1990 | 6.2 | 125.8 | |||
| Peak | May 1992 | 9.7 | 7.6 | 18 mos | ||
| Return | Dec 1994 | 5.5 | 131.0 | 4.1% | 4 yrs 1 mo | |
| Start | Nov 2001 | 5.5 | 143.7 | |||
| Peak | June 2003 | 9.2 | 6.3 | 19 mos | ||
| Return | Feb 2004 | 5.6 | 146.5 | 1.9% | 2 yrs 3 mos | |
| Start | Dec 2007 | 7.7 | 5.0 | 153.7 | ||
| Peak | Dec 2009 | 15.7 | 10.1 | 24 mos | ||
| Return | June 2011 | 14.1 | 9.18 | 153.4 | -0.2% | 3 yrs 6 mos |
| My predicted | 4 yrs 0 mos | |||||
| return | Dec 2013 |
Note that the unemployment peak period that started in 1974 and ended in 1979 (lasting nearly five years) was followed immediately by another peak period ending nearly nine years later. By the end of that period, the work force had increased by more than 32%, meaning overall, almost 30 million new jobs had to be created.
The aggressive increase in the Civilian labor force in that period can likely be attributed to post-World War II babies reaching adulthood, with some entering the labor force after secondary school and the rest entering the workforce after further education.
The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:
Unemployment rates:
It is interesting to recognize that in most cases, unemployment peaks roughly one-third of the timeline for unemployment to return to its “normal” rate, so we can double the number of months from the Start to the Peak to expect to arrive at an approximate return to “normal.”
We live in hope (past performance is no guarantee of the future).
The next Economic Jobs report will be found at:
Economic Picture: July 2011 released August 5, 2011
The last Economic Jobs report will be found at:
Economic Picture: May 2011
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