Unemployment – Jobs. Trends. Insight.

BLS Reports Jobless Rates of at Least 15% in 16 Metro Areas in August

By Juli Morris on October 9, 2009 in Labor Market Dynamics.

For the eighth consecutive month, unemployment rates in all 372 metropolitan areas were higher on a year-over-year basis, according to last week's BLS Metropolitan Area Employment and Unemployment Summary for August.

Source: WANTED Analytics

Only two metro areas, El Centro, CA, and Yuma, AZ, reported a jobless rate over 15% in August '08, compared to the 16 identified in August '09. Three metro areas dropped below the 15% level since last month's report (Fresno, CA; Monroe, MI; and Hickory-Lenoir-Morgan, NC), and no metro areas were added to the list in August.

The magnitude of the year-over-year increases in unemployment rates continues to be troubling, but the number of metro areas with an increase greater than 5% has been declining since the May report: 45 of the 372 metro areas reported an increase of at least 5 percentage points over the prior year, compared with 56 metro areas cited in the July data. The largest jobless rate increases belong to two Michigan metro areas: Detroit-Warren-Livonia, Michigan, followed by Muskegon-Norton Shores. Detroit-area residents saw an increase in their unemployment rate of 7.9 percentage points.

WANTED's Hiring Demand data for those 16 metro areas with at least 15% unemployment for August 2009 shows a decline in available online job ads of 17% from August 2008. In better news, Hiring Demand in August for these metro areas showed an increase of 6% over July 2009.

WSJ Economists Predict Gain of 200,000 Jobs over Next Twelve Months

By Juli Morris on September 11, 2009 in Labor Market Dynamics.

Economists surveyed by the Wall Street Journal in September predict that the U.S. economy will gain an average of 17,000 jobs per month over the next twelve months. This is the first forecast of average monthly job gains since March 2008, and follows last month's forecast of average monthly losses of 27,000 jobs over the next twelve months. Despite the forecasted gains, the outlook for the unemployment rate has not improved for 2009. This month's survey showed an increase from in the unemployment rate from 9.9 percent to 10 percent for December 2009, and then subsequently a decrease from 9.4 percent to 9.3 percent for December 2010.

Even though the recession may have ended, on average the economists expect the jobless rate, at 9.7% in August, to peak at 10.2% before slowly declining next year. While the economists forecast that the economy will add jobs over the next 12 months, the net increase is seen at a modest 200,000 over that period and the unemployment rate still is expected to be at 9.3% in December 2010.When asked about the biggest risk to the economy right now, 10 of the economists highlighted the weak jobs market.

This month's Wall Street Journal survey of economists was conducted from September 4-8. Each month the WSJ asks economists to estimate the average monthly change in nonfarm payrolls over the next twelve months. That is, the monthly changes the BLS reports each month, for the next twelve months, divided by twelve.

Preliminary report from BLS shows decline of 216,000 jobs in August (Updated)

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

Employment fell by 216,000 jobs in August, according to today's preliminary report from the Bureau of Labor Statistics, the smallest drop since August 2008. Although the losses are still large in historical terms, the levels continue to lend support to the argument that the employment situation appears to have stabilized. The economy has now shed over 6.9 million jobs since the start of the recession in December 2007.

Click chart to view full size

Along with the preliminary report for August, the BLS issued its Final Estimate of job losses for June at a loss of 463,000 jobs, down 20,000 from its preliminary estimate of -443,000. It also dropped its July revised estimate down 29,000 jobs to a estimated loss of 276,000 jobs. One more revision for June may still occur.

Looking at industry employment figures, health care employment grew by 27,900 in August. Employment in transportation and warehousing declined by just 1,000 in August, and the finance and insurance sector lost 20,000 jobs.

The unemployment rate rose from 9.4 to 9.7 percent, the highest level since June 1983 and significantly higher than the 9.5 percent predicted by most economists.

BLS Reports Jobless Rates of at Least 15% in 19 Metro Areas in July

By Juli Morris on September 3, 2009 in Labor Market Dynamics.

For the seventh consecutive month, unemployment rates in all 372 metropolitan areas were higher on a year-over-year basis, according to this week's BLS Metropolitan Area Employment and Unemployment Summary for July.

Source: WANTED Analytics 2.0

Only two metro areas, El Centro, CA, and Yuma, AZ, reported a jobless rate over 15% in July '08, compared to the 19 identified in July '09. Two metro areas dropped below the 15% level since last month's report (Hanford-Corcoran, CA; and Kokomo, IN) while three areas were added to the list (Visalia-Porterville, CA; Rockford, IL; and Sebastian-Vero Beach, Florida).

The magnitude of the increases in metro area unemployment rates is still troubling, but seems to be leveling off: 56 of the 372 metro areas reported an increase of at least 5 percentage points over the prior year, compared with 86 metro areas cited in the June data. The largest jobless rate increases belong to Detroit-Warren-Livonia, Michigan, followed by Bend, Oregon, and Elkhart-Goshen, Indiana. Detroit-area residents saw an increase in their unemployment rate of 8.4 percentage points.

WANTED's Hiring Demand data for those 19 metro areas with at least 15% unemployment for July 2009 shows a decline in available online job ads of 17% from July 2008. In better news, Hiring Demand in July for these metro areas showed an increase of 15% over June 2009.

WSJ Job Loss Forecast Improves – Unemployment Rate Forecast Remains Bleak

By Juli Morris on August 19, 2009 in Labor Market Dynamics.

Economists surveyed by the Wall Street Journal in August predict that the U.S. economy will lose an average of 27,000 jobs per month over the next twelve months, significantly better than the 70,000 average monthly losses they forecast for July. This is the fifth consecutive survey predicting declining monthly losses. Despite the declining losses, the outlook for the unemployment rate has improved only slightly, from 10 percent to 9.9 percent for December 2009, and from 9.5 percent to 9.4 percent for December 2010.

A better-than-expected employment report for July, where employers cut 247,000 jobs and the jobless rate fell for the first time in 15 months, suggests the worst is over. The unemployment rate is still expected to rise to 9.9% by December, but economists forecast that the economy will shed far fewer jobs over the next 12 months than they had forecast last month.

This month's Wall Street Journal survey of economists was conducted from August 7-11. Each month the WSJ asks economists to estimate the average monthly change in nonfarm payrolls over the next twelve months. That is, the monthly changes the BLS reports each month, for the next twelve months, divided by twelve.

UI Claims Data Allows for Cautious Optimism

By Charles Thibault on August 14, 2009 in Unemployment Insurance Claims.

Combined with slowing job losses and increases in Hiring Demand (which are a leading indicator), this week's Unemployment Insurance Claims report cements the idea that an economic recovery is on the horizon. After 9 weeks of almost uninterrupted improvements this week's data allows for cautious optimism.

On a seasonally adjusted basis, the 4-week moving average of new jobless claims rose by 8,500 claims. However, this slight increase does not put at risk the recent trends in labor market data.

Professor Hamilton has much discussed how the National Bureau of Economic Research (NBER) has identified the 8th week after the peak in UI claims as the start of recovery. The 4-week moving average of new UI claims peaked on April 4th, when there were 658,750 claims. That was 18 weeks ago. UI claims dropped consistently for several weeks but picked up again May, which was matched in our Hiring Demand Indicators. On May 30th, there was a "local maximum" for UI claims, at 632,250 claims. That was 9 weeks ago. Professor Hamilton figures that there's 85% chance that April 4th will be identified as the peak.

On a seasonally unadjusted basis, there were 13,000 more claimants this week as the number of new job ads fell by 56,000. The week before, new claims had fallen by 45,000 claims as job ads rose by 14,000. The following time series plot new UI Claims and the number of new job ads, on a seasonally unadjusted basis. The UI claims axes has been inverted to facilitate analysis.

Click chart to view full size

Preliminary report from BLS shows decline of 247,000 jobs in July (Updated)

By Juli Morris on August 7, 2009 in BLS Nonfarm Employment.

Employment fell by 247,000 jobs in July, according to today's preliminary report from the Bureau of Labor Statistics. July's job losses were significantly lower than the 467,000 loss originally reported for June. Although the losses are large in historical terms, the levels continue to lend support to the argument that the employment situation appears to have stabilized. The economy has now shed over 6.7 million jobs since the start of the recession in December 2007.

Click chart to view full size

Along with the preliminary report for July, the BLS issued its Final Estimate of job losses for May at a loss of 303,000 jobs, up 42,000 from its preliminary estimate of -345,000. It also raised its June revised estimate up 24,000 jobs to a estimated loss of 443,000 jobs. One more revision for June may still occur.

Looking at industry employment figures, health care employment grew by 19,600 in July. Employment in transportation and warehousing declined by 22,400 in May, and the finance and insurance sector lost 12,900 jobs.

The unemployment rate unexpectedly dipped from 9.5 to 9.4 percent—still the highest we've seen since September 1983. Economists still predict rising unemployment well into 2010.

Relief from UI Claims Data

By Charles Thibault on August 6, 2009 in Unemployment Insurance Claims.

The Department of Labor reported a drop of 38,000 new Unemployment Insurance claims on a seasonally adjusted basis. The 4-week moving average dropped by 4,750 claims, also an improvement.

There had been 30,000 new additional claimants in each of the two preceding releases, which had put the 4-week moving average at risk of hitting an inflection point and moving back in a negative direction. The 4-week moving average is important because the NBER usually identifies the start of the recovery as occurring 8 weeks after the peak in the 4-week moving average of new claims.

On a seasonally unadjusted basis, there were 48,300 fewer claimants. This corresponds to an increase of 120,000 new job ads two weeks ago. Last week, new ads dipped slightly by 31,000 ads. However, the DOL expects an increase of claims on a seasonally unadjusted basis for next week's release, as the seasonal correction parameter will move from 84.2 to 86.0 for the week ending August 8th.

The graph below shows the historical relationship between the number of new UI claims and the the number of new job ads, on a seasonally unadjusted basis. The axes for UI claims has been inverted to facilitate visual interpretation.

Click chart to view full size

UI Claims Jump Even As Hiring Demand Grows

By Charles Thibault on July 30, 2009 in Unemployment Insurance Claims.

The Department of Labor announced this morning that new Unemployment Insurance Claims rose by 25,000 on a seasonally adjusted basis to 559,000, which was a little bit of a surprise.

On a seasonally unadjusted basis, the number of new claims dropped by 78,111. Last week, the number of new job ads jumped by 84,000 on a seasonally unadjusted basis. As new job ads increase, more workers are absorbed into the labor force, reducing UI claims.

The 4-week moving average dropped by 8,250 claims. However, this week's jump puts the 4-week moving average very close to reversing its "improving" trend. If next week's release puts new UI claims above 569,000, the 4-week moving average will increase, reversing the trend. Remember that the NBER has identified the "start" of the recovery period as occuring 8 weeks after the peak in new UI claims in the past several recessions. Stock markets have been bullish, however.

Our Hiring Demand Indicators saw some slight weakness in mid-July, but have picked up since then. Given last week's improvement in the number of new job ads, and stability in the seasonal correction coeficients for next week, we expect that new UI claims will fall next week on a seasonally adjusted basis.

Click chart to view full size

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.

Click chart to view full size

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".

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