The US Bureau of Labour Statistics has released its latest report on employment and the labour market. Unfortunately only 50,000 jobs were created last month in the private sector leading to a net gain of 39,000 once job losses in the public sector were subtracted. Given that new workers seeking employment exceeds this amount substantially each month unemployment rose to 9.8 %. It takes 125,000 new additional jobs each month just to absorb new entrants to the labour force, ceteris paribus.When unemployment rises to the levels it has in the U.S. large numbers of workers who would rather be working but despair of finding jobs also leave the workforce and become discouraged workers. The headline rate of unemployment is the outcome of the addition of these inward and outward flows. As unemployment falls many of these discouraged workers rejoin the labour force and swell the ranks of those searching for work which is why sometimes a rise in the headline unemployment rate actually heralds the tendency for unemployment to be dropping. But this is not what these numbers are suggesting. At these rates of private job creation and note despite the stimulus actual job losses at the state and local level because of foolish ill timed austerity measures it will take a very long time to bring the unemployment rate down to more acceptable levels.
The elevated headline rate is definitely not a good result and further evidence of a need for greater stimulus from both monetary and fiscal policy. Discouraged workers and those working part time who preferred full time work remained elevated. The broader U6 measure of unemployment remained at 17 %. Floyd Norris in the New York Times(http://norris.blogs.nytimes.com/2010/12/03/who-ya-gonna-believe-2/) has pointed out that the current BLS report might well be revised upwards in term of private sector hiring because the survey completion rate was lower than usual because of the run up to Thanksgiving and also because it is at odds with a just reported private sector manufacturing survey, the Institute for supply management monthly survey of manufacturing that suggested more robust job hiring. We shall see if this turns out to be so.
In any case the private sector needs to spend the large cash it has accumulated and do more hiring. If it continues to refuse to do this then thought should be given to a tax on profits that would be rebatable in return for increased hires.
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force | 5.6 | 5.5 | 5.5 | 5.8 | 5.7 | 5.5 | 5.5 | 5.7 | 5.8 |
|---|---|---|---|---|---|---|---|---|---|
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force | 5.9 | 5.4 | 5.8 | 6.5 | 5.9 | 6.0 | 6.1 | 5.9 | 6.2 |
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate) | 9.4 | 9.0 | 9.3 | 10.0 | 9.5 | 9.6 | 9.6 | 9.6 | 9.8 |
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers | 9.9 | 9.8 | 10.0 | 10.5 | 10.2 | 10.3 | 10.3 | 10.4 | 10.6 |
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force | 10.7 | 10.6 | 10.8 | 11.3 | 11.0 | 11.0 | 11.0 | 11.1 | 11.3 |
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 | 16.4 | 15.9 | 16.3 | 17.2 | 16.5 | 16.7 | 17.1 | 17.0 | 17.0 |
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data. | |||||||||
column 1=Nov 2009 not seasonally adjusted
col.2=Oct.2010 not seasonally adjusted; col. 3=Nov.2010 not seasonally adjusted; col.4 Nov.09 seasonally adjusted (s.a.) ;col.5=July 2010 (s.a.); col.6 Aug.2010 s.a.;col.7 Sept.2010 s.a.; col.8 Oct.2010 s.a.; col.9 Nov.2010 s.a.
courtesy of US Bureau of Labour Statistics
In Canada partly because of a declining participation rate by young workers the rate of unemployment fell to 7.6 %
Courtesy Statistics Canada
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