Friday, December 3, 2010

USA Unemployment Rate Increases to 9.8% in November (Charts) "Employment was little changed (+39,000)"

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Bureau of Labor Statistics: Monthly Employment Situation Summary


USA Unemployment Increases to 9.8% in November

Official Statement The U.S. Bureau of Labor Statistics reported, "The unemployment rate edged up to 9.8 percent in November, and nonfarm payroll employment was little changed (+39,000). Temporary help services and health care continued to add jobs over the month, while employment fell in retail trade. Employment in most major industries changed little in November."
 
Unemployment Rate (Chart) The unemployment rate (U-3) increased to 9.8% in November, after 3 months at 9.6% (August, September, October). The rate peaked during the USA Great Recession in October, November, and December 2009 at 10.1%, 10.0%, and 10.0% respectively. The low subsequently has been 9.5% in June and July 2010. The chart below shows the latest 36 months (3 years) of the monthly unemployment rate.



Total Nonfarm Employment (Chart) Total nonfarm employment increased +39,000 (preliminary) in November, a small increase and second consecutive monthly. The total  nonfarm  employment job losses peaked during the USA Great Recession at -779,000 in January 2009. The best jobs gains subsequently has been +432,000 in May 2010. The net jobs gain for 2010 has been +951,000, compared to net job losses of 3,623,000 and 4,740,000 in 2008 and 2009, respectively. Although the November gain in jobs is slightly positive data, the 2010 net gain in jobs is overshadowed by the net job losses in 2008 and 2009. The chart below shows the latest 36 months (3 years) of monthly changes in total nonfarm employment. Total nonfarm employment is private sector plus government sector jobs.



Private Sector Employment (Chart) Private sector employment increased +50,000 (preliminary) in November, the 11th consecutive month of increases but the smallest since January 2010. Private sector employment job losses peaked during the USA Great Recession at -806,000 in January 2009. The best jobs gains subsequently has been +241,000 in April 2010. There has been a net jobs increase of +1,171,000 for 2010 YTD, compared to net job losses of 3,807,000 and 4,660,000 in 2008 and 2009, respectively. Although the November gain in jobs is positive data, the 2010 net gain in jobs is overshadowed by the net job losses in 2008 and 2009. During the depths of the Great Recession, there was a dismal 22 consecutive months of job losses from January 2008 through October 2009 and 23 of 24  months through December 2009. The chart below shows the latest 36 months (3 years) of monthly changes in private sector employment.



Government Employment (Chart) Government employment decreased -11,000 (preliminary) in November, and has decreased 5 of the last 6 months. Government employment job losses reached at cyclical peak recently at -236,000 in June 2010. The best jobs gain was the previous month +381,000 in May 2010. The BLS has attributed this jobs gain and loss mostly to the 2010 Census. There has been a net jobs decrease of -220,000 for 2010 YTD, compared to a net job gain of +184,000 and net job loss of -80,000 in 2008 and 2009, respectively. The chart below shows the latest 36 months (3 years) of monthly changes in government employment.



Total Unemployed Total unemployed increased +276,000 to 15,119,000 in November. The total unemployed peaked during the USA Great Recession in October 2009 at 15,612,000. The low subsequently has been 14,599,000 in July 2010. The chart below shows the latest 36 months (3 years) of the total unemployed.



Underemployment Rate The underemployment rate (U-6) continued at 17.0% in November for the 2nd consecutive month. The rate peaked during the USA Great Recession in October, November, and December 2009 at 17.4%, 17.2%, and 17.3%, respectively. The low subsequently has been 16.5% in January, June, and July 2010. The chart below shows the latest 36 months (3 years) of the monthly unemployment rate.




Commentary

Unemployment Rate, Total Nonfarm Employment The November increase in the Unemployment Rate to 9.8% and the small monthly increase (+39,000) in Total Nonfarm Employment is both disappointing and a shock. After a series of positive economic news in November, mostly October data, the BLS Monthly Employment Situation Summary for November counters some of this other data. This indicates the economic recovery has not stalled, but is not accelerating at an adequate pace. As can be seen from the charts above, the employment situation had not trending significantly better or worse, just muddling along until the November data shows a turn for the worse.

USA GDP The November BLS data indicates the USA GDP growth rate is very low, certainly less than +3% and most likely at or just under +2%, between +1.5% and no higher than +2.25%. The USA GDP is reviewed here for Q3 <USA Q3 GDP Revised Upwards to +2.5% (Charts) "Sharp deceleration in imports*>. This also seems to validate the Federal Reserve estimates of a lower GDP and higher unemployment rate in Q4 2010, which is reviewed here <Federal Reserve Lowers USA 2010 & 2011 GDP Projections (Charts) *Higher unemployment rate projections for 2010 & 2011*>

Net Jobs Gain in 2010 After 5 consecutive months of net employment gains (January through May 2010), there were 4 consecutive months of net employment losses (June through September 2010), and now 2 consecutive months of net jobs gain (October and November 2010). This results in a net jobs gain in total nonfarm employment of +951,000 in 2010. Private sector employment has increased every month in 2010, for 11 consecutive months, for a net jobs gain of +1,171,000 in 2010. Government sector employment has decreased 5 of the past 6 months and 7 of the 11 months in 2010 for a net jobs loss of -220,000 in 2010.

Cost of the Great Recession Although there has been a net jobs gain in total nonfarm employment of +951,000 for 2010 YTD, this is not enough to bring down the unemployment and underemployment rates. The USA is not creating jobs fast enough, period. This also does not even begin to recover the net jobs lost in 2008 and 2009 of -3,623,000 and -4,740,000, respectively. Private sector employment has had a net jobs increase in 2010 YTD of +1,171,000, which is encouraging. However, when compared to the private sector jobs lost in 2008 and 2009, this has resulted in a net jobs lost of -7,412,000 during this Great Recession and Recovery cycle. The government sector employment gained +184,000 jobs in 2008, lost -80,000 jobs in 2009, and has lost -220,000 in 2010 for a net jobs lost of -116,000 during this Great Recession and Recovery cycle.

Revisions The September total nonfarm employment monthly change was revised upwards to -24,000 from -41,000. The October total nonfarm employment monthly change was revised upwards to +172,000 from +151,000.

Weekly Unemployment Claims Weekly unemployment insurance claims have been below 450,000 for 4 consecutive weeks and the 4-week moving average is at a cyclical low. Claims remain above 400,000 and below 500,000. This also indicates the USA economy is not growing adequately for significant jobs growth. Weekly unemployment insurance claims are monitored, charted, and reviewed on the Weekly Unemployment Claims page.


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