December 2, 2011
Yeah! The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000!
Before anyone begins predicting the beginning of the recovery from the Great Recession that economists say ended in 2009, let’s take a look at who was hired and what they were hired to do.
Seasonal Employment
Employment continued to trend up in retail, much of which occurred in clothing and clothing accessories stores (+27,000) and in electronics and appliance stores (+5,000). The other 18,000 “new” retail industry jobs are basic “mall jobs” like Saks, Neiman Marcus, Nordstrom, Macy's, Ross, Victoria's Secret, JC Penney and Bath & Body Works, to name a few. These jobs are likely short term and low wage. In short, they are typical holiday hires that will disappear following Christmas.
In addition, the Labor Department reported that the private sector added 140,000 jobs in a number of other service-providing industries, including “leisure and hospitality” (253,000 jobs), led by food services and drinking places (waiters and bartenders) accounting for 33,000 jobs.
Real Jobs
Employment in professional and business services added only 33,000 jobs. Manufacturing employment changed little over the month and has remained essentially unchanged since July. Construction employment showed little movement, which has been the case since 2009.
Livable Working Hours and Wages
The average workweek for all employees on private non-farm payrolls was unchanged at 34.3 hours in November. The manufacturing workweek was down by two tenths of an hour to 40.3 hours. The average workweek for production and non-supervisory employees on private non-farm payrolls fell to 33.6 hours. Factory overtime was unchanged at 3.2 hours.
Average hourly earnings for all employees on private non-farm payrolls decreased in by 2 cents (0.1%), to $23.18.
Unemployment
The number of unemployed persons, at 13.3 million, was down by 594,000 in November. The labor force, which is the sum of the unemployed and employed, fell by more than half that amount. The number of job losers and persons who completed temporary jobs declined by 432,000 to 7.6 million.
The number of long-term unemployed (those jobless for 27 weeks and over) changed very little, at 5.7 million, accounting for 43% of the unemployed. The civilian labor force actually declined to 64%.
The number of persons employed part-time for economic reasons (euphemistically referred to as "involuntary part-time workers") dropped by 378,000 over the month to 8.5 million. These individuals were working part-time because their hours had been cut back or because they were unable to find a full-time job.
The Labor Department claimed that in November, 2.6 million persons “were marginally attached to the labor force,” about the same as a year earlier. What the Department means is that 2.6 million people had lost their jobs and were no longer actively seeking employment.
Since these former workers had had not searched for work in the 4 weeks preceding the survey, they were not counted as unemployed.
However, the Labor Department classifies the hopeless unemployed into two categories so it can reduce the number it reports.
In addition to identifying certain unemployed persons as “marginally attached” to the workforce, the Labor department has a category called “discouraged workers.” The Department defines these “discouraged workers” as people not currently looking for work because they believe no jobs are available for them.
Therefore, according to the Labor Department, while 2.6 million people are “marginally attached to the labor force,” only 1.1 million of them were truly “discouraged” and had lost hope of getting a job.
The other 1.5 million persons “marginally attached to the labor force” had not given up on finding a job, according to the Labor Department. These folks had not searched for work in the 4 weeks preceding the survey because they were attending school or fulfilling “family responsibilities.” Yeah, sure.
How these categories are determined or, more importantly, measured, is no doubt explained somewhere. I prefer to rely on Mark Twain, who proclaimed that there are “lies, damn lies and statistics.”
These statistics show the traditional modest increase in low-paid service industry jobs that occurs between Thanksgiving and Christmas.
Happy holidays.
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