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Friday, November 07, 2008

The Employment Situation: October

It was all but inevitable that the Bureau of Labor Statistics report on the employment situation for October was going to be depressing. And it is.

The Establishment Employment Report. For the second straight month, establishment employment fell by around 250,000; the job loss for September was revised upward. Since the beginning of the year, job losses now total 1.8 million. Construction employment has now declines for 17 straight months, and is down about 8% over that time. Manufacturing employment has declined for 27 straight months, down 6.4% (and 920,000 jobs). (Of special interest to me, given where I live and work, Primary Metals Employment has declined every month this year, by a total of 2%). Employment in Motor Vehicles and Parts--19 consecutive monthly declines, a total decline of 18%. Employment in Financial services has declined for 13 consecutive months (only 2%, but quite the run of small losses). Even Business and Professional Services employment has declined every month this year. For a couple of positive notes--employment in Educational Services (private) has increased by 3% over the past year, and employment in health care is up 2.6%.

The Household Report. The most-watched number here is the Unemployment Rate (although I think there's a more important number--the Employment Population Ratio), and it rose to 6.5% in October, up from 6.1% in September. This is a higher unemployment rate than we saw during (or after) the 2001 recession (the peak was 6.3%), and the last time we had a 6.5% unemployment rate was in March 1995. We're still far below the post-World-War-II peak of 10.8% (November and December 1982), so that may be some comfort. The Employment-Population Ratio (EPR--the percentage of the population age 16 and over currently at work) has fallen to 61.8%. We have now seen the EPR decline continuously since October 2006--two straight years of decline. The last time the EPR was this low was in October 1993--fifteen years ago.

Overall, the news is as bad as it's been for quite a while, and, even more depressing, it's worse this month than last month, and was worse in September than in August. The trend is not exactly going in the right direction.


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