Tag Archives: employment

November brought us good news about jobs and wages. Here are the details.

Summary: It’s the big day for economic stat junkies. Has the economy ended its long flirtation with recession, limping along near the 2% stall speed — supported by years of fiscal and monetary stimulus (now fading)? The last few quarters of GDP numbers suggest yes, but the job numbers have refused to cooperate. Here we look at the November report. It looks good.  This is the first of two posts today.

Economy

Contents

  1. The big lesson from this report
  2. The big picture of the economy
  3. Household survey
  4. Establishment survey
  5. Unemployment
  6. The hot sectors for jobs!
  7. For more information about

(1) The big lesson from this report

What can we learn from the November employment report? First, that one minute spent reading or watching economists predict economic numbers is a minute wasted forever. Most of the numbers are noise (changes withing the error bars; watch the trend instead) — and the forecasts are wild guesses. Life is short; spend it wisely. Here the forecasts of the best for the November gain in non-farm employment from the Establishment survey (CES). They guess because we want guesses. Guessing

  • JP Morgan 200K
  • Goldman Sachs 220K
  • Citigroup 225K
  • HSBC 230K
  • UBS 230K
  • Credit Suisse 235K
  • Morgan Stanley 235K
  • Deutsche Bank 250K

The actual was 321,000 (+2.8% SAAR), plus another 44,000 from revisions to September and October.

(2)  The big picture of the economy

This report supported the hopes of those hoping the US economy has returned to “normal” growth. But one swallow does not a summer make. Even with a good November, the YoY NSA growth in jobs is 2.0% by the Household Survey (CPS) and 2.0% by the Establishment Survey (CES) — two methods, same result.

The Bureau of Labor Statistics conducts two surveys: one of households, one of businesses. They are not directly comparable, each giving different perspectives on the US economy. The Current Population survey looks at households. Compared to the survey of businesses it has large error bars; there are no revisions. It’s the basis for the headline unemployment rate, and gives useful data not in the more-accurate business (establishment) survey. Also, some research suggests that the household report shows inflection points before the establishment survey.

Both give identical pictures for the past year (YoY NSA): people employed (CPS) +2.0%, non-farm jobs (CES) +2.0%.  They’re also similar for the past two months (SA): +2.3% and +2.5%.

(3) The Household survey (CPS)

Continue reading

The hidden truth about job growth, lost amidst the statistical noise & optimists’ hopes

Summary: The key thing to know about the latest job report is the same thing to know about all 2014’s job reports: there has been no change to the trend. No sign of the acceleration so confidently forecast by so many. This confirms the other economic indicators, amidst the slowing world economy. Leave the analysis of the minutia to specialists; the big picture is important and easy to see. Because the expansion grows old, and the next recession approaches (especially with the Fed determined, for good reason, to normalize interests beginning next year).

“Significant monetary stimulus, the end of fiscal austerity, a booming housing market, a cheap dollar, record corporate cash balances — if the US economy does not significantly accelerate in the coming quarters, it never will. We assume it will …”

— Michael Hartnett (Chief Strategist, Bank of America), 12 September 2013 (red emphasis added)

Slow Economic Growth

The core economic statistics for the US are jobs and wages (these are coincident indicators, showing where we were in the last few months). As I (and others) have reported, the predictions of optimists and pessimists alike have been wrong during the past 5 years. The US has grown steadily by most metrics at roughly 2% per year. Slow, especially with the gains going largely to the 1% (hence the GOP wins, bringing them control of most elements of the US Federal and State government machinery).

Here is the monthly nonfarm jobs growth (SA). Do you see a boom in 2014? The second half of 2014 (after an unexpected winter slowed Q1 growth)? This month’s “strong” report resulted from “America’s Sudden Fascination With Hiring Young Women” as waitresses.
.

Non-farm jobs, SA.

Let’s smooth out those wiggles. Here is the same data, but the year-over-year changes, NSA, during the past 10 years. Looks like we’re at peak job growth. Is that good or bad?

Continue reading

3 graphs tell the story about the US economy, hidden amidst the noise of the jobs report

Summary:  We’ve reached a critical point in this business cycle. We enjoyed the years of fiscal and monetary stimulus; now comes the dismount. Only after the stimulus ends will we learn the true strength of our economy. Today we look at the monthly jobs report, perhaps the single most important indicator. Three graphs tell the story, cutting through the fog of confusion spread by the news media.

Economy

.

Contents

  1. Why we’re ignorant and confused
  2. The weak good news: more employed
  3. The bad news: percent employed
  4. More bad news: wages
  5. For More Information

.

(1) Why we’re ignorant and confused

Reports about the monthly jobs report illustrate why we’re confused and so often ignorant about important aspects of our lives.

  1. We get numbers without context. Raw numbers by themselves tell us little; the percent change has meaning. Also useful are descriptions of the trend and adjustments for inflation (vital when looking at long-term changes).
  2. We get detailed analysis of noise, lavish attention to tiny monthly fluctuations — changes usually smaller than the data’s error bars.

Instead let’s focus on the big things. Three graphs tell the story about the September jobs report. I have been showing readers these numbers for years. The first big story is that these trends have not changed.

Before we start, remember the price paid for this expansion. Five years of near-zero interest rates (since December 2008) — ending in Q2 or Q3 of 2015). Three rounds of quantitative easing — ending this month. And an mind-bending expansion of the Federal public debt — $809 billion added during the fiscal year just ended (a 6.8% increase, equal to 4.7% of GDP). That the economy needs such large stimulus in the sixth year of an expansion is unprecedented (usually by now the economy has overheated from too-fast growth) — and is the second big story.

Now comes the dismount, when we must dial the stimulus down to zero. Understanding the trend helps us prepare for what might happen next.

(2)  The weak good news: more employed

Steady slow growth at about 2% now in its fourth year. We’re not in a recession. No signs of the often-predicted acceleration.

Jobs: percent change

.

(3)  The bad news: per cent employed

The percent of people in their prime years (16 – 64) who are employed peaked in 2006, fell in 2007 – 2011, and has only weakly recovered since then (back to the level of 1984, reversing much of the long increase from women entering the work force). There are many factors affecting this, but the trend since 2006 probably reflects weakness not strength in the US economy.

Continue reading

The jobs report: another opportunity to shake our confidence in the government

Summary: Today we look at lies about the jobs report from Zero Hedge. These are part of a larger campaign to destroy our confidence in the government as a means of collective action, leaving us isolated and weak.

WW2 propaganda

True then and now

.

Conservatives have long waged a campaign to weaken our confidence in unions and government, the only organizations that can resist the 1%. Alone, as individuals, we’re pawns So they’re using their agents to separate us, as shepherds’ dogs work sheep, with a propaganda barrage on us of immense size. Instead of explosives, it consists of ideas — myths and misinformation. Too overwhelming for rebuttals, our only hope lies in skepticism.

Our gullibility is their greatest advantage, but we can do better

These stories comes from sources providing an artfully arranged combination of information and misinformation (like worms on fishhooks). Few do it better than Zero Hedge, which mixes information from valuable sources with misinformation and outright fiction. Today we look at one example, Zero Hedge’s myths about the Bureau of Labor Statistics.

4 Million Fewer Jobs: How The BLS Massively Overestimated US Job Creation
Zero Hedge, 5 August 2014 — Opening:

“When it comes to the all-important monthly payrolls number which sets the tone for risk over the next month, one of the biggest variables in the BLS’ “estimate” (because all jobs numbers are that: statistical estimates) of US jobs is the monthly birth-death adjustment. What this monthly fudge factor is, in a nutshell, is the BLS’ estimation for how many new businesses are created over the period offset by older “dying” businesses, leading to incremental jobs that are only polled by the BLS with a substantial lag. Here is how the BLS explains this adjustment: …”

This is correct, as is the following excerpt they provide from the BLS website. They then add their special mixture of fact and fiction.

The latest proof of just how broken the economy has become, and serves as a big flashing red question mark about just how massively overestimated job creation is due to a wildly erroneous birth/death estimator, comes from a research report by the Brookings Institution titled: “The Other Aging of America: The Increasing Dominance of Older Firms.”

This study, one of several by Brookings about this important trend, shows the decline in entrepreneurship in the US economy. ZH quotes:

Perhaps more striking, our research showed that the decline in new firm formation rates had occurred in every U.S. state and nearly every metropolitan area, in each broad industry group, and in all firm size classes … the rate of new firm formations fell significantly during this period — occurring because the number of new firms being formed each year (numerator) didn’t keep pace with the growth in the stock of total firms in the economy (denominator).

Zero Hedge then assumes the BLS has not accounted for this (guessing), and draws a dramatic conclusion (their bold):

… if indeed this declining dynamism is “contributing to the decline in entrepreneurship as well” then the whole premise behind the birth/death adjustment, or rather the “Birth” contribution … goes out of the window.

…  here is the bottom line: since Lehman, or starting in 2009, the Birth/Death adjustment alone has added over 3.5 million jobs. Or rather “jobs”, because these are not actual jobs – these are BLS estimates for how many jobs newly-formed businesses have created based purely on statistical estimations and hypotheses that the US economy in 2014 is as it was in 1960. Which means that the traditional dynamics used behind the Birth and Death adjustment are now merely Dead, and US employment is overestimated by as much as three and a half million jobs!

This also means that any boasts by Obama about “solid US economic growth” under his regime, and that all those jobs lost since Lehman have allegedly since been recovered, are nothing but even more lies.

From Zero Hedge: Birth Death model

Zero Hedge, 5 August 2014

.

This is big news. They even added the standard GOP refrain of “Obama lies”. But false; it’s ignorance on stilts. Note the last sentence from the BLS page about the birth/death adjustment, from which ZH quoted at the start of their article:

Continue reading

See the true trend of the US economy, hidden in the daily news

Summary: today’s post is another helping you more clearly see the present. We look at the condition of the US economy in pictures, cutting through the statistical noise and economists’ hopes that fog our vision. It’s easy to see, if we try.  When we decide to try, America will become a different (and better) nation.

.

Clear vision

During the past 4 years I have reported (& predicted) that the US economy has remained locked into slow growth, vulnerable to a shock (perhaps knocking it into recession), despite constant forecasts of acceleration coming really soon — returning us to normal growth.

If we had accurate newspapers, most economic reports would read like this:

The new economic data released today — the XXXX number — came in slightly less than expected by the consensus of economists, continuing its stable slow growth since early 2011. The monthly numbers change, but the trend does not. Also unchanged are economists’ assurances that the economy will accelerate during the next few quarters.

We often obscure this slow growth by reporting the change in terms of absolute numbers rather than percentages (since the population and economy grow over time, the same number represents a smaller percent change over).

News without the fake drama — would it sell advertisements? Or rather, we get the quality of news that we refuse to pay for.

This week the government released major new economic data. As always, analysis focused on tiny monthly changes (i.e., statistical noise) that support their forecasts, pretending to be ignorant of the tools to show statistical significance. And conservative financial “experts” whined about the large revisions made to past data (amnesiac about their complaints that the government taxes and spends too much, and the resulting gross underfunding of the vital government statistical agencies — our eyes by which to see the world.

So what did we learn?

(1)  Real Gross Domestic Product

Let’s look at real GDP excluding inventory swings (which mask the trend), also called Real Final Sales. It has run at 2% per year for the past 3 years (starting Q2 2011). The month-on-month per cent change shows the trend, if you are familiar with such graphs.
.
GDP: Final-Sales
.
The same numbers shown as percent change since a year ago (YoY, year-on-year change) more easily shows the trend — flat for 4 years — but will more slowly show the eventual change in the trend.

Continue reading

Students, cheerleaders, & lawyers all exploited as they scramble for the few opportunities in New America

Summary: One astonishing aspect of the structural changes reshaping America is how fiercely we work to avoid seeing them. Such as the transformation of employment. Breaking unions was the first and essential step. Now comes the larger changes: shifting jobs from full time with benefits and job security into temporary, insecure, part-time, no-benefits — at lower wages.

Here we see four snapshots of this structural change in the power relationships of employers and workers — as people become increasingly desperate for opportunities. We close our eyes to these changes, since seeing the 1% build a New America on the ruins of the old would upset the even tenor of our lives.

Buffalo Jills

Buffalo Jills at Ralph Wilson Stadium on 9 August 2012. Photo by Rick Stewart/Getty Images

“To get the man’s soul and give nothing in return -– that is what really gladdens Satan’s heart.”
— C. S. Lewis, The Screwtape Letters (1942)

Contents

  1. Cheerleaders mistreated for profit
  2. Internships: opportunities for the affluent
  3. Entry level positions for lawyers
  4. For More Information

(1)  Cheerleaders mistreated for profit

Cheerleaders for professional sports teams pay much of their own expenses, work long hours, and earn a pittance — all in the service of fabulously profitable sports businesses.

The Cheerleaders Rise Up: NFL cheerleaders are putting down their pom-poms and demanding a better deal“, Amanda Hess, Slate, 23 April 2014 — Excerpt:

In 2014, the cheerleaders revolted.

This January, rookie NFL cheerleader Lacy T. kicked things off when she filed a class action lawsuit against the Oakland Raiders, alleging that the team fails to pay its Raiderettes minimum wage, withholds their pay until the end of the season, imposes illegal fines for minor infractions (like gaining 5 pounds), and forces cheerleaders to pay their own business expenses (everything from false eyelashes to monthly salon visits).

Within a month, Cincinnati Bengals cheerleader Alexa Brenneman had filed a similar suit against her team, claiming that the Ben-Gals are paid just $2.85 an hour for their work on the sidelines.

And Tuesday, five former Buffalo Bills cheerleaders filed suit against their own team, alleging that the Buffalo Jills were required to perform unpaid work for the team for about 20 hours a week. Unpaid activities included: submitting to a weekly “jiggle test” (where cheer coaches “scrutinized the women’s stomach, arms, legs, hips, and butt while she does jumping jacks”); parading around casinos in bikinis “for the gratification of the predominantly male crowd”; and offering themselves up as prizes at a golf tournament, where they were required to sit on men’s laps on the golf carts, submerge themselves in a dunk tank, and perform backflips for tips (which they did not receive). The Buffalo Jills cheerleaders take home just $105 to $1,800 for an entire season on the job.

Continue reading

The shortage of STEM workers: another bogus crisis crafted to benefit the 1%.

Summary: Another day, another astonishing bogus crisis (the STEM shortage) in which well-meaning Americans labor against their own interests to further enrich the 1%. The true nuggets of insight in the news media reveal so much, but accomplish nothing unless they spark action.

Better days are here, for some of us.

“Big industry constantly requires a reserve army of unemployed workers for times of overproduction. The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it …”
— Marx (1847, unpublished work)

“Taking them as a whole, the general movements of wages are exclusively regulated by the expansion and contraction of the industrial reserve army …”
— Marx, Das Kapital (1867)

.

This is a tale of the New America: the mythical STEM crisis:

  1. The STEM Crisis Is a Myth“, Robert N. Charette, IEEE Spectrum, 30 Aug 2013 — “Forget the dire predictions of a looming shortfall of scientists, technologists, engineers, and mathematicians.”
  2. The STEM Crisis: Reality or Myth?“, Michael Anft, The Chronicle of Higher Education, 11 November 2013
  3. The truth about the great American science shortfall“, Karin Klein, op-ed in the Los Angeles Times, 24 February 2014
  4. The Tech Worker Shortage Doesn’t Really Exist“, BusinessWeek, 24 November 2014 {update}

It’s an example of how America works in the 21st century: well-meaning but foolish people serving the plutocracy:

  1. Plutocrats (e.g., Bill Gates) see a need for more cheap workers.
  2. Create fake scare: a shortage of workers trained in science, technology, engineering, and mathematics.  STEM! Some seed money, mostly for marketing.
  3. A thousand organizations — Federal to local schools, charities (e.g., Boy Scouts), businesses — rally to action.

That the shortage of STEM workers was bogus was quite obvious from the start, as Klein explains. It is Econ 101:

Continue reading