Wednesday, July 21, 2010
Monday, July 05, 2010
Another bad employment situation report
The BLS released the employment situation report for June last Friday (July 2), and I haven't been able to get around to saying anything about it until today. I'd rather have something good to say, but I have no idea what I can say that would be good.
Let's start with the establishment employment report.
Overall, employment fell by 125,000; temporary employment of Census workers fell by 225,000, so non-Census employment actually rose. But not by much--only 100,000. At that rate, we would reach the pre-recession peak employment level in 84 months after we hit the employment trough in December 2009...of, we'd be back to 2007 employment levels in 2016...And private sector employment, which also peaked in December 2007, rose by 83,000. At that rate it will take 100 months--until early 2017--for private sector employment to recover to its pre-recession level.
The private-sector employment gains were concentrated in Professional Business Services (+46,000, about 40% of that in temporary help services); Education and Health Services (+22.000, mostly in health services); and Leisure and Hospitality (+37,000). Outside of those three sectors, private employment fell--down in Construction (-22,000) and Financial Services (-15,000) more than anywhere else.
In the Government sector, State and Local government employment continued to fall (down a total of 10,000 from May), while the Federal government added 27,000 (outside of the temporary Census jobs that vanished). The continued weakness of State and Local government budgets is likely to be a drag on the recovery in the months ahead--between them, employment is down by 193,000 since June 2009 (which is when the recovery is likely to have begun).
And the household survey does not look much better. While the unemployment rate fell from 9.7% to 9.5%, that occured entirely because thelabor force fell (-652,000) more than twice as much as did employment (-301,000). As a result, the Labor Force Participation rate is down to 64.7%, its lowest level since early 1985, and the Employment-Population ratio is now at 58.5%, a level last reached in September 1983. That's pretty depressing. Household employment is now 7 million below its pre-recession peak (also in December 2007). 46% of the unemployed have been out of work for 27 or more weeks, and the average (mean) duration of unemployment is now 32.8 weeks--both higher than they have been since the BLS began measuring duration of unemployment in 1948. In both cases, the previous peak came in May 1983, when 27.6% of the unemployed had been out of work for more than 26 weeks and the mean duration of unemployment was 21.8 weeks.
This is getting old. A very severe recession, a weak-to-moderate policy response, and a very un-recovery-looking recovery.