Total Nonfarm Employment – Jobs. Trends. Insight.

BLS reports loss of 85,000 jobs in December, but Gain of 4,000 for November; Construction and Business Services Industries below Growth Trend

By Juli Morris and Charles Thibault on January 8, 2010 in BLS Nonfarm Employment.

Employment fell by 85,000 in December, according to today's preliminary report from the Bureau of Labor Statistics. This loss was worse than consensus estimates: major stock market indices lost 0.25% in the first two hours of trading today but stabilized after that.

The unemployment rate held at 10.0 percent — consensus estimates had expected it to rise to 10.1 percent.

The economy has shed 7.4 million jobs since the start of the recession in December 2007.

Along with the preliminary report for November, the BLS issued its final estimate of 127,000 job losses for October, a worsening of 16,000 from its revised estimate of -111,000. It revised its November preliminary estimate up 15,000 jobs to report gains of 4,000 jobs, which is the one piece of good news from the report. One more revision for November is in the works.

The "culprits" this month were deviations from trends in the Construction industry and in the "Professional and Business Services" industry. Employment losses in the Government sector also contributed to this month's employment declines.

The table below shows how the Construction industry slipped in December, and how employment in the Professional and Business Services industry also fell below trend:

December BLS Nonfarm Forecast: up 75,000

By Charles Thibault on December 28, 2009 in BLS Nonfarm Employment.

The number of new online job postings continued on its positive trend in December, supporting continued improvements in the labor market situation. Based on improving Hiring Demand and positive signals from several different labor market variables, WANTED Technologies expects the BLS will announce December Nonfarm Employment gains of 75,000 workers. The BLS will release the Employment Situation Summary on Friday, January 8^th at 8:30am.

This would be the employment gain since the recession started 23 months ago. Last month, the BLS estimated that nonfarm employment shrunk by only 11,000 workers. The graph below shows year-over-year percent changes in Hiring Demand (new online job ads) and month-over-month changes in US employment (nonfarm). The blue dot represents this month's forecast from WANTED:

Click chart to view full size

Our forecast of an improvement of 75,000 in Nonfarm Employment is based on the following:

Preliminary report from BLS shows decline of 11,000 jobs in November (Updated)

By Juli Morris on December 4, 2009 in BLS Nonfarm Employment.

Employment fell by a mere 11,000 jobs in November, according to today's preliminary report from the Bureau of Labor Statistics, a much smaller loss than consensus estimates. The largest job losses were in construction, manufacturing, and information, while temporary help and health care added jobs. The economy has shed 7.3 million jobs since the start of the recession in December 2007.

Click chart to view full size

Along with the preliminary report for November, the BLS issued its Final Estimate of job losses for September at a loss of 139,000 jobs, up 80,000 from its revised estimate of -219,000. It raised its October preliminary estimate up 79,000 jobs for a revised loss of 111,000 jobs. One more revision for October may still occur.

The unemployment rate fell from 10.2 to 10.0 percent; consensus estimates had expected it to remain unchanged.

Preliminary report from BLS shows decline of 190,000 jobs in October (Updated)

By Juli Morris on November 6, 2009 in BLS Nonfarm Employment.

Employment fell by 190,000 jobs in October, according to today's preliminary report from the Bureau of Labor Statistics, an improvement over last month's loss but larger than consensus estimates. The largest job losses were in construction, manufacturing, and retail. The economy has now shed 7.3 million jobs since the start of the recession in December 2007.

Click chart to view full size

Along with the preliminary report for October, the BLS issued its Final Estimate of job losses for August at a loss of 154,000 jobs, up 47,000 from its revised estimate of -201,000. It raised its September preliminary estimate up 44,000 jobs for a revised loss of 219,000 jobs. One more revision for September may still occur.

The unemployment rate rose from 9.8 to 10.2 percent, an unexpectedly large jump and the first time the unemployment rate has reached 10 percent since 1983.

October 2009 BLS Nonfarm Employment Forecast – Down 224,000

By Charles Thibault on October 25, 2009 in BLS Nonfarm Employment.

Based on improving labor dynamics, WANTED Technologies expects that the Bureau of Labor Statistics will announce a job loss of 224,000 workers for October 2009.

Last month, the BLS reported nonfarm employment losses of 263,000.

Click chart to view full size

Several factors contribute to another negative employment report from the Bureau of Labor Statistics, but with fewer job losses:

There has been a 'positive trend' in job loss figures over the past 8 months. Nonfarm job losses have diminished an average 72,000 a month over the past 8 months.

There were 88,000 fewer new UI Claims over the past month.

More people are being separated from their jobs than are being hired into a new one, according to the BLS's Job Openings and Labor Turnover Survey. However, the gap between the number of Hires and Separations has been shrinking by 62,000 workers a month over the past 8 months, and was -198,000 in August 2009.

Hiring Demand has grown an average 0.7% a week over the past 8 months. However, the number of online job ads slipped by 0.5% on a seasonally adjusted basis over the mid-month to mid-month period on major national job boards. The number of online job ads did not pick up as much in the second half of September as we would have been expected. Had there been a spike in the number of online job ads, WANTED would have forecast fewer job losses.

The Employment Situation for October is scheduled to be released on Friday, November 6, 2009, at 8:30 a.m. (EST).

FORECAST: September 2009 – Total Nonfarm Payroll Down 167,000 (Update 2)

By Juli Morris on September 21, 2009 in BLS Nonfarm Employment.

WANTED Technologies forecasts that Nonfarm Employment Payroll will drop by 167,000 in September. Last month the BLS reported a decline of 216,000 nonfarm workers.

Click chart to view full size

Several factors contribute to this negative outlook, although we do expect a "relative improvement" in job losses of almost 50,000 compared to last month's report.

- There were 32,000 fewer new Unemployment Insurance Claims in the 4 weeks preceding September 12th than in the 4 weeks preceding August 12th. (Nonfarm Employment is counted on the 12th day of each month).

- Hiring Demand has remained almost unchanged on a seasonally adjusted basis compared to last month. There hasn't been a surge in new online job ads that would lead us to believe a strong hiring trend is underway that could reverse employment losses.

- Job losses, according to the August Employment Situation, have "moderated, [...] although job losses continued in many of the major industry sectors". In other words, job losses continue, but there has been a slow down in these losses.

Update: The consensus estimate from Thomson/Reuters predicts a decline of 170,000 jobs for September; TrimTabs Investment Research forecasts a loss of 358,000 jobs.

The BLS will release its September Employment Situation on Friday, October 2nd. Further details on forecasts from WANTED and other providers are available on our BLS Forecast page.

How Can Employment Fall While Hiring Demand Increases?

By Charles Thibault on August 17, 2009 in Labor Market Dynamics.

We reported on our blog that Hiring Demand increased 2.4% in July even as Employment fell by 247,000 non-farm workers. How can Employment fall if Hiring Demand is on the rise?

Changes in Employment are driven by two processes – Exits and Hires. In fact, we can construct a "Job Accounting Identity":

Change in Employment = Hires – Exits

If 10 people are hired but 20 people exit, the change in employment is -10 (10 – 20 = -10). If 20 people enter the labor force but only 10 leave, then the change in employment is +10 (20 – 10 = 10). More people entering the workforce than leaving is what generates gains in employment.