Friday, October 8, 2010

Employment Situation Analysis 10-08-10

Employment Situation Summary
Release Date: Usually the first Friday of each month
Release Site:
Market Sensitivity: VERY HIGH
Management Value: VERY HIGH

Friday, October 07, 2010

While the unemployment rate has not changed the situation has deteriorated.
The net job loss was -95,000 with the private sector adding 64,000 jobs while the government shed 159,000 as more temporary census jobs are ending. Construction and manufacturing both posted losses. The 25yoa+ bachelor’s degree and higher crowd is still unemployed at staggering rates (4.4% for September). Average weekly hours worked in manufacturing and construction fell and the number of voluntary job leavers fell substantially (Table A-11. Unemployed persons by reason for unemployment)
The attention getter in this report lives in Table U-6 (Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force). These are the under employed plus the gave-ups. The rate trend for this group from June through September is 16.5, 16.5, 16.7 and now 17.1%.

It appears that there were additional layoffs in the second half of September that would not be reflected in this release but caught by the recent Gallup survey That suggests we need to hold on tight next month. We’ll see.

The recession continues by all valid and objective data. We do not see any evidence of a change in policy that would improve the trend. We believe hiring will remain stagnant with accelerating job losses for October 2010. The uncertainty of the mid-term elections is, undoubtedly, a contributor to the business community’s reluctance to reach into the coffers and hire for expansion because rising unemployment means declining demand in spite of “stimulus”. Perhaps some clarity of direction will be a stabilizing influence after the elections.

Thank you for reading and stay tuned.