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Forecast July 2009 – Transportation Down 2,700

By Charles Thibault on July 29, 2009 in BLS Nonfarm Employment.

Based on improving Hiring Demand for "Transportation and Material Moving Occupations", WANTED predicts the BLS will report a drop of only 2,700 workers in the Transportation Industry in July (BLS series CES4300000001).

Employment in this industry has fallen by 25,000 workers on average every month for the past 12 months. Hiring Demand for "Transportation and Material Moving Occupations" was down 60% on a year-over-year basis in both March and April, the worst drops seen in three years.  Correspondingly, Transportation employment dropped by a whopping 43,800 in April, also the worse decline seen in years.

Since then, employment drops have subsided, to -20,000 in May and -13,900 in July. Hiring Demand has "rebounded", standing at -41% on a year-over-year basis for both June and July, a relative improvement of twenty percentage points.

The Bureau of Labor Statistics will release industry-level data with the Employment Situation on Friday, August 7th.

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Forecast July 2009 – Health Care up 28,600

By Charles Thibault on July 28, 2009 in BLS Nonfarm Employment, Health Care.

Based on slightly improving Hiring Demand for Health Care workers, WANTED forecasts an employment increase of 28,600 in the Health Care sector for July (BLS data series CES6562000101). The BLS will release industry-level employment figures on Friday, August 7th along with the Employment Situation.

Despite weakening Hiring Demand throughout 2009, the Health Care industry has remained fairly robust, adding an average 26,000 workers per month over the last year.

The year-over-year change in Hiring Demand for Health Care is now -14.4%, a relative improvement of 2.35% compared to last month. The BLS reported an increase in Health Care employment of 20,800 in June. Recent improvements in Hiring Demand in this industry are driving our forecast of 28,600.

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FORECAST: July 2009 — Total Nonfarm Payroll Down 440,000 (Update 2)

By Charles Thibault on July 24, 2009 in BLS Nonfarm Employment.

Based on weakening Hiring Demand and an increase in new Unemployment Insurance Claims, WANTED Technologies forecasts that Nonfarm Employment Payroll will drop by 440,000 in July. The BLS will release the July Employment Situation on Friday, August 7th.

Last month, the BLS reported a loss of 467,000 nonfarm jobs, citing "widespread" job losses in major industries.

Hiring Demand has decreased by 3% since last month on a seasonally adjusted basis. Last month Hiring Demand was up 2%, which drove an optimistic forecast. Although Hiring Demand has stabilized, it has not picked up enough to generate gains in employment.

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On an industry-level, WANTED forecasts a loss of 2,700 jobs in Transportation, a loss of 14,400 job in Finance and Insurance, but an increase of 28,600 jobs in Health Care. Each of these industry forecasts is featured on our blog.

Update: The consensus estimate from Thomson/Reuters predicts a decline of 300,000 jobs for July in the August 7th BLS Employment Situation report; TrimTabs Investment Research forecasts a loss of 488,000 jobs.

Further details on forecasts from WANTED and other providers are available on our BLS Forecast page.

Unemployment Insurance Claims Still Signaling Some Weakness

By Charles Thibault on July 23, 2009 in Unemployment Insurance Claims.

The Department of Labor announced this morning that new Unemployment Insurance claims rose by 30,000 from last week's level on a seasonally adjusted basis, pointing to some continued weakness and volatility in the US labor market. There were 554,000 new UI claims last week.

Continued claims dropped by 88,000 claimants to 6,225,000. Two weeks ago, new claims had dropped by 45,000, which lowered last week's continued claims. We can expect seasonally adjusted continued claims to increase following this week's jump in new UI claims.

The 4-week moving average of new UI claims dropped by 19,000 claimants. This points to a somewhat improving economy, but an increase in new UI claims to a level above 617,000 in next week's report would change the trend in the 4-week moving average.

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Fortune 1000 Hiring Demand Remains Flat

By Charles Thibault on July 20, 2009 in Fortune 1000.

Hiring Demand by Fortune 1000 companies remained consistent with the prior month, according to data from WANTED's Fortune 1000 report. WANTED's report measures new job ads for America's largest corporations. A month ago, the Fortune 1000 showed a year-over-year drop of 24.6% in Hiring Demand.

247 of the 1000 largest US corporations showed improvements in Hiring Demand, unchanged since last month.

On a Sector basis:

- Hiring Demand of "Wholesale Trade" companies (NAICS 42) is up by thirty-seven percentage points, posting a 24% year-over-year increase compared to last month's year-over-year drop of 13.2%.

- Health Care is the only sector to show consistent and robust growth in Hiring Demand.  Health Care sector Hiring Demand is up 26.8% compared to last year.  Last month, Hiring Demand was up 34.6% on a year-over-year basis.

- Hiring Demand of "Professional, Scientific, and Technical Services" companies (NAICS 54) dropped by twenty percentage points, going from -13.2% to -33.9% on a year-over-year basis.

The following table summarizes the sector highlights:

Source: WANTED Fortune 1000 Report

Source: WANTED Fortune 1000 Report

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UI Claims Drop as Economy Settles

By Charles Thibault on July 16, 2009 in Unemployment Insurance Claims.

We reported last week that Hiring Demand was poised for upward trending. Reductions in new weekly unemployment insurance claims, as announced this morning by the Department of Labor, support this interpretation.

On a seasonally adjusted basis:

- Initial claims dropped by 47,000 new claims to 522,000.

- The 4-week moving average of new claims dropped by 22,500, a substantial drop. This is the third drop in a row, and the second "substantial" drop in the 4-week moving average. Recall that the National Bureau of Economic Research usually signals the start of an economic recovery 8 weeks after the peak in the moving average of weekly unemployment claims.

On a seasonally unadjusted basis:

- Initial claims jumped, as expected (from seasonal coefficients) and presaged by a substantial drop in weekly new job ads last week. Indeed, weekly new job ads had dropped by 120,000 new ads to 635,000.

The graph below shows the historical relationship between new job ads, posted on a weekly basis, and seasonally unadjusted new UI claims. The UI Claims axes has been inverted to facilitate interpretation – as the number of new job ads falls, businesses cannot support new employees, and more workers are forced to register unemployment insurance claims.

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There has been talk that the "timing" of automotive factory closing is causing an artificial drop in the weekly unemployment insurance claims. However, slowing drops in total employment, improvements in UI claims data, and Hiring Demand that is inching its way back up to consistent month-over-month growth all point to a stabilizing situation, with the start of a recovery "just a matter of time".

Unexpected Drop in New UI Claims – Continued Claims Increase

By Charles Thibault on July 9, 2009 in Unemployment Insurance Claims.

The Department of Labor released its weekly unemployment insurance claims data, which corroborates our analysis that despite some slippage, the labor market situation has stabilized and is in a position to start improving.

On a seasonally unadjusted basis:

- New Claims increased by 17,612 as Hiring Demand dropped by 16.3% or 122,700 new job ads.

- On a seasonally unadjusted basis, Continued Claims dropped  by 34,900 claimants.

However, on a seasonally adjusted basis:

- New Claims dropped by a staggering 52,000 claimants.

- The four-week moving average of New Claims dropped by 10,000 claimants to 606,000.

- Continued Claims increased by 159,000 claimants.

The interpretation of this week's data is well tied together by the Associated Press: "While layoffs are slowing, unemployed workers are having a difficult time finding new jobs." A robust month of May may have helped reduce new claims, but recent slippage in Hiring Demand means that unemployment workers will find it harder to exit UI programs.

The following graph shows the historical relationship between UI claims and WANTED Hiring Demand.  The UI Claims axis has been inverted to facilitate analysis.

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Weekly UI Claims: – "Recovery, Where are You? … Come in Please."

By Charles Thibault on July 2, 2009 in Unemployment Insurance Claims.

The Department of Labor reported this morning that initial jobless claims dropped by 16,000 on a seasonally adjusted basis. The 4-week moving average dropped 2,750, a very modest improvement. Combined with flat Hiring Demand, and another large reduction in the overall US workforce (-467,000 in Nonfarm Payroll Employment), we're still looking for a significant turning point in the economy (increases in employment or output).

On a seasonally unadjusted basis, initial jobless claims dropped by almost 12,000. This is matched with last week's 16,800 increase in Hiring Demand. This week, Hiring Demand went down by 7,000 on a seasonally unadjusted basis.

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Overall, slight upward trending in Hiring Demand corresponds with fewer initial jobless claims and reductions in the rate of employment loss. However, sustained employment losses continue to point towards a weak labor market and weakening overall economy, although "the worst is behind us".

BLS Update: Post Mortem

By Juli Morris on July 2, 2009 in BLS Nonfarm Employment.

Employment fell by 467,000 jobs in June, according to today's preliminary report from the Bureau of Labor Statistics. June's job losses were significantly higher than the 345,000 loss reported for May, a number than many questioned. The economy has now shed nearly 6.5 million jobs since the start of the recession in December 2007.

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The WANTED forecast of a loss of -260,000 jobs in June was clearly not pessimistic enough. This is the second month in a row when our forecast based on Hiring Demand missed the number released by the BLS by a larger than acceptable margin.

That range of error prompts us here internally to re-examine the model we use to see if it needs re-calibration. The Hiring Demand data has only been in use for the last five months, so there are likely some refinements still required. Our thinking at the moment is as follows:

  • The number that the BLS reported for May, which surprised everyone, still looks like an anomaly. We don't want to say that number is "wrong", but it certainly falls outside the trend (the blue line in the chart) established by the prior months. Our model happens to rely heavily on the prior month data, so this particularly unusual May data point had a disproportionate effect on our forecast for June.
  • We think we have some additional analysis to perform on the seasonal adjustments to our Hiring Demand data. These adjustments should be reflected in our forecast next month.

Along with the preliminary report for June, the BLS issued its Final Estimate of job losses for April at a loss of 519,000 jobs, down 15,000 from its revised estimate of -504,000. It also revised its May preliminary estimate up 23,000 jobs to a estimated loss of 322,000 jobs. One more revision for May could still occur.

Looking at industry employment figures, health care employment grew by 20,800 in June. Employment in transportation and warehousing declined by 13,900 in June, and the finance and insurance sector lost 18,200 jobs.

The unemployment rate rose from 9.4 to 9.5 percent—the highest rate seen since August 1983 —and slightly lower than the Bloomberg Survey estimate of 9.6 percent.

UI Claims Jump and Hiring Demand Wobbles

By Juli Morris on June 25, 2009 in Unemployment Insurance Claims.

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This morning the Department of Labor announced that new unemployment claims increased on a seasonally adjusted basis, jumping to 627,000 new claims last week, an unexpected increase from the revised 612,000 new claims from the prior week. The 4-week moving average of seasonally adjusted new unemployment claims rose slightly, increasing by 500 new claims from a revised average the prior week of 616,750.

Hiring Demand fell in the past week for the second consecutive week, following an uptick the week of June 6th.  The number of new job ads, on a seasonally unadjusted basis, fell from 718,000 to 713,000. Overall, the trend in Hiring Demand in 2009 remains flat.

Combined with the monthly Nonfarm Employment Payrolls, UI and Hiring Demand data suggest that the labor market is not picking up any significant steam, although it appears to have stabilized.  The economy continues to struggle, but the rate at which companies are reducing their workforces has slowed.

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