Bank of Tokyo Mitsubishi's US Economist on the Unemployment Picture

On February 5th, Bloomberg interviewed Ellen Zentner, Senior US economist at Bank of Tokyo-Mitsubishi UFJ Ltd. to discuss the January unemployment rate and the outlook for the US Labor Market.

Ellen's views include:

• "the labor market is definitely improving, we got a bigger downward revision to payroll data, leading up to today... No we lost 8.4 million jobs vs over 7 million... And this contraction in jobs correlates more to the decline in consumer spending."
• In january's report the comments are suspicious because jobs aren't being created, yet the unemployment rate drops. Looking at labor force participation, you see that household employment has increased. But you also need to know how many people dropped out of the labor market all together.
• We have record numbers of discouraged workers and many of them are permanently lost---but thousands will come back into the labor market.
• The data is showing some job gains in some areas---but it isn't happening in all sectors of the economy. January saw the first increase in manufacturing jobs in over 3 years.
• Forward looking indicators show that part-time and contract jobs should improve in the next few months---This isn't as good as landing higher paying full time jobs.
• The labor market will wadddle along for a little bit, because you have create jobs for the previously displaced and the teenagers that are becoming working aged adults---this isn't going to happen for some time.
  

65 Years of Unemployment Data

The St Louis Fed publishes regular updates to the Civilian Unemployment Rate. I thought this chart spanning the ~65 years from post WWII (1945) to today (2010) you can see how recessions have frequently caused large spikes in the unemployment rate.

The spike from the most recent recession is the second highest in the post-war era---That's the bad news. The good news is that during the past few months the Jobless rate went from over 10% to 9.7%... Maybe things are starting to improve.

Unemployment Rate by County

According to the U.S. Department of Labor's Bureau of Labor Statistics, there are nearly 30 million people currently unemployed -- that's including those involuntarily working part time and those who want a job, but have given up on trying to find one. In the face of the worst economic upheaval since the Great Depression, millions of Americans are hurting. "

The Decline: The Geography of a Recession," as created by labor writer LaToya Egwuekwe, serves as a vivid representation of just how much. Watch the deteriorating transformation of the U.S. economy from January 2007 -- approximately one year before the start of the recession -- to the most recent unemployment data available today. Original link: www.latoyaegwuekwe.com/geographyofarecession.html.

This data was last updated in February 2010.

More Women Working than Men

As Econompicdata shows for the first time in US history there are more women with jobs than men. This is one reason why the current great recession has been called a mancession. As many industries that have been dominated by males (construction and manufacturing) have been hit quite hard by lay-offs and job-losses, while many industries dominated by women (education and health-care) have not suffered as extreme of a hit to their payrolls.

For additional reading on the subject, you can check out The NY Times or Casey Mulligan's Blog (he's a professor at the University of Chicago).

January Jobs Report---Unemployment drops to 9.7%

CNBC reports in this 10 minute video clip the January, 2010 jobs report. The Unemployment rate is at 9.7%. The unemployment declined because of the benchmark revisions and because more people were finding work.

Annual benchmark revisions show 8.4 million jobs lost since the start of the recession versus 7.2 million prior to the revision.

Rick Santelli commented that,the benchmark revision was in the realm of expectations, and he wants to know how much the labor force shrank / (grew) in the period.

The average work week was higher at 33.3 hours per week versus 33.2 hours per week prior to the report.

Temporary jobs continue to increase, but construction jobs continue to decline.

In February and March, government employment is expected to increase as the census starts its 2010 hiring spree.

Mark Zandi views the decline in unemployment rate confusing, because payroll employment continues to shrink (ADP data), so how could unemployment be improving?

In order to stabilize employment, analysts say 125,000 jobs per month need to be created---However, this past month 20,000 jobs were still destroyed. While the trend is still improving, things aren't fully positive yet.

Trucking Jobs have Dropped During the Recession

The >Bureau of Labor Statistics has recently issued a study that shows how employment in the truck transportation industry has dropped from 1.45 million jobs before 2008 to about 1.25 million trucking jobs by the end of 2009. This decrease of 200,000 drivers is significant not only for the truckers, but also for the manufacturers and merchants that sell the goods that these guys deliver.

You can see in the above chart that the severity of the decline in this recession (Green Line) is much steeper and prolonged than what it was in the prior two recessionary periods.