Mish's Global Economic Trend Analysis |
| Canada Unexpectedly Sheds 54,500 Jobs in March; Worst Job Loss in 4 Years; Canadian Dollar Tumbles Posted: 05 Apr 2013 12:50 PM PDT Our neighbor to the North also suffered from an unexpectedly weak jobs report today, the worst monthly job losses in more than four years. Canada shed 54,500 positions in March, more than wiping out the 50,700 jobs that were added in February, Statistics Canada said on Friday. Market operators had expected a modest gain of 8,500 jobs.Canadian Dollar Tumbles Bloomberg reports Canadian Dollar Tumbles After Unexpected March Employment Loss The Canadian dollar fell in its biggest decline in nine months against its U.S. peer after the nation unexpectedly lost jobs last month by the most since the last recession four years ago.I think we have seen the end of good jobs reports here and in Canada for quite some time. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Jobs +88,000, Unemployment Rate 7.6%, Household Survey Employment Drops by 206,000 Posted: 05 Apr 2013 07:36 AM PDT Initial Reaction The surge in employment fueled by part-time jobs and the Obamacare effect may finally be over. Although the establishment survey showed a gain of 88,000 jobs, the household survey, off which the unemployment rate is based, showed a loss of 206,000 jobs. The unemployment rate edged lower by .1% because a whopping 496,000 people dropped out of the labor force. Last month, voluntary part-time employment rose by a reported 446,000. It's plain to see that last month's numbers were a statistical aberration. This was a miserable jobs report from every angle. March BLS Jobs Report at a Glance
Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data. Quick Notes About the Unemployment Rate
March 2013 Jobs Report Please consider the Bureau of Labor Statistics (BLS) March 2013 Employment Report. Nonfarm payroll employment edged up in March (+88,000), and the unemployment rate was little changed at 7.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment grew in professional and business services and in health care but declined in retail trade. Click on Any Chart in this Report to See a Sharper Image Unemployment Rate - Seasonally Adjusted  Month to Month Change by Type of Job  Average weekly hours rose .1 to at 34.6 hours. A year ago average hours were 34.5 hours. Average hourly earnings rose $0.01 to $23.83. In 2013, average hourly earnings are up $0.05. Real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly. For 2013, one needs to factor in the increase in payroll taxes for Social Security. For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution? BLS Birth-Death Model Black Box The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey. The Birth-Death numbers are not seasonally adjusted, while the reported headline number is. In the black box the BLS combines the two, coming up with a total. The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance. Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way. Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions. Birth Death Model Adjustments For 2012  Birth Death Model Adjustments For 2013  Birth-Death Notes Once again: Do NOT subtract the Birth-Death number from the reported headline number. That approach is statistically invalid. In general, analysts attribute much more to birth-death numbers than they should. Except at economic turns, BLS Birth/Death errors are reasonably small. For a discussion of how little birth-death numbers affect actual monthly reporting, please see BLS Birth/Death Model Yet Again. Household Survey Data  Decline in Labor Force Factors
Were it not for people dropping out of the labor force, the unemployment rate would be well over 10%. Part Time Status (in Thousands)  click on chart for sharper image There are 7,638,000 workers who are working part-time but want full-time work. A year ago there were 7,664,000. There has been no improvement in a year. This is a volatile series. Table 15 BLS Alternate Measures of Unemployment  click on chart for sharper image Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation not to be confused with "good" approximation. The official unemployment rate is 7.6%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. U-6 is much higher at 13.8%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Duration of Unemployment  Long-term unemployment remains in a disaster zone with 39.6% of the unemployed in the 27 weeks or longer category. Grossly Distorted Statistics Given the complete distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers. Digging under the surface, much of the drop in the unemployment rate over the past two years is nothing but a statistical mirage. Things are much worse than the reported numbers indicate. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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