· The latest jobs
report was disappointing for those who hoped for improved momentum in
hiring, but diminishing weakness continued as the predominant message.
The Bureau of Labor Statistics reported that nonfarm payrolls fell
85,000 last month after a 4,000 November increase (revised from
-11,000) and a 127,000 October decline (revised from (-111,000).
Together, the three-month average decline of 69,000 was the smallest of
the recent recession. Consensus expectations has been for no change in
December payrolls.
· For 2009 as a whole, payrolls declined by 5.0 million, by far the worst decline since WWII. To emphasize the message of a weak labor market, the percentage term drop of 3.7% y/y also was the weakest of the postwar period, edging out a 3.6% decline in 1945.
· The payroll employment decline was accompanied by a stable unemployment rate at 10.0%. Nevertheless, the latest was not far below the postwar record of 10.8% reached late in 1982. For the year as a whole the unemployment rate of 9.3% also was just below the record. Last month, household sector employment fell a hard 589,000 (-3.8% y/y) following a modest November increase. The decline was accompanied by a 661,000 shrinkage in the labor force (-1.0% y/y). This y/y decline was the largest since early 1951. The number of individuals not in the labor force rose a whopping 843,000 (4.2% y/y) with 6,306,000 (14.4% y/y) who want a job now. (The household survey included modest benchmark revisions.)
· Elsewhere in the household survey of employment, the unemployment rate including marginally attached workers and those working part-time for economic reasons held near its high at 17.3%. For the year as a whole this measure stood at 16.3% versus 10.6% last year and 8.3% in 2007. The number of job losers on temporary layoff ticked up 10,000 (0.5% y/y) following huge declines during the prior two months. The number on permanent layoff fell by 275,000 (+57.2% y/y). Another measure compromising the employment picture was a rise in the median duration of unemployment to a record-high 20.5 weeks. The percent of those unemployed for more than 27 weeks rose to 39.8%.
· In the establishment survey, the decline in service sector hiring of 4,000 owed to a 21,000 drop (-0.3% y/y) in government hiring. The number of private service sector jobs rose a modest 17,000 (-2.0% y/y) after a larger November increase. For the year employment here fell by 2.6 million (-2.8% y/y). Professional & business services jobs rose 50,000 during December (-3.1% y/y) while administrative & support jobs rose 42,400 (-3.9% y/y). That included a 46,500 (-7.0% y/y) rise in temporary help services employment which was the fifth consecutive monthly increase. Financial activities employment rose 4,000 (-3.9% y/y) following declines that steadily diminished earlier this year. Factory sector employment fell again last month, by 27,000, which compares to -262,000 last January. For the year as a whole factory sector jobs fell by 1.4 million and by a record 10.7%. Construction employment fell another 53,000 and by nearly one million for 2009 as a whole (-13.5% y/y), also by far the record.
· The diffusion index for private nonfarm payrolls ticked lower to 40.0% last month but remained double the low of last March. For the factory sector, the index ticked up m/m to 39.8%. It had fallen to a low of 6.0% last January. These indexes are harbingers of future payroll levels.
· The length of the average workweek, often a harbinger of future employment, held steady at 33.2 weeks, its highest level since February. The workweek in the factory sector also held steady m/m at 40.4 weeks but the figure has been rising since a May low.
· Average hourly earnings increased 0.2% after an upwardly revised November increase. The 2.9% gain for the year as a whole was its weakest since 2004. Earnings in the factory sector increased 0.3% and by 2.6% for the year. The durable sector's earnings rose 3.4% y/y while earnings in the private service sector rose a diminished 3.1%. Construction sector earnings rose 3.4% y/y though that was up from 1.2% growth in 2005.
· The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases.
· Commodity Prices Buoyant in Year of Crisis, Recovery from the IMF can be found here.
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