Tag Archives: unemployment rate

The ‘new normal’ in America’s job market

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A job seeker yawns as he waits in front of the training offices of Local Union 46, a union representing metallic lathers and reinforcing iron workers, in the Queens borough of New York.

WASHINGTON (AP) — Even after another month of strong hiring in June and a sinking unemployment rate, the U.S. job market just isn’t what it used to be.

Pay is sluggish. Many part-timers can’t find full-time work. And a diminished share of Americans either have a job or are looking for one.

Yet in the face of global and demographic shifts, this may be what a nearly healthy U.S. job market now looks like.

An aging population is sending an outsize proportion of Americans into retirement. Many younger adults, bruised by the Great Recession, are postponing work to remain in school to try to become more marketable. Global competition and the increasing automation of many jobs are holding down pay.

Many economists think these trends will persist for years despite steady job growth. It helps explain why the Federal Reserve is widely expected to start raising interest rates from record lows later this year even though many job measures remain far below their pre-recession peaks.

“The Fed may recognize that this is a new labor-market normal, and it will begin to normalize monetary policy,” said Patrick O’Keefe, an economist at accounting and consulting firm CohnReznick.

Thursday’s monthly jobs report from the government showed that employers added a solid 223,000 jobs in June and that the unemployment rate fell to 5.3 percent from 5.5 percent in May. Even so, the generally improving job market still bears traits that have long been regarded as weaknesses. Among them:

— A shrunken labor force.

The unemployment rate didn’t fall in June because more people were hired. The rate fell solely because the number of people who had become dispirited and stopped looking for work far exceeded the number who found jobs.

The percentage of Americans in the workforce — defined as those who either have a job or are actively seeking one — dropped to 62.6 percent, a 38-year low, from 62.9 percent. (The figure was 66 percent when the recession began in 2007.) Fewer job holders typically means weaker growth for the economy. The growth of the labor force slowed to just 0.3 percent in 2014, compared with 1.1 percent in 2007.

“It is highly unlikely that we are going to see our (workforce) participation rate move anywhere near where it was in 2007,” O’Keefe says.

This marks a striking reversal. The share of Americans in the workforce had been steadily climbing through early 2000, and a big reason was that more women began working. But that influx plateaued in the late 1990s and has drifted downward since.

— The retirement of the vast baby boom generation.

The aging population is restraining the growth of the workforce. The pace of retirements accelerated in 2008, when the oldest boomers turned 62, when workers can start claiming some Social Security benefits. Economists estimate that retirements account for about half the decline in the share of Americans in the workforce since 2000.

From that perspective, the nation as a whole is beginning to resemble retirement havens such as Florida. Just 59.3 percent of Floridians are in the workforce.

— Younger workers are starting their careers later.

Employers are demanding college degrees and even postgraduate degrees for a higher proportion of jobs. Mindful of this trend, teens and young people in their 20’s are still reading textbooks when previous generations were punching time clocks.

The recession “basically told everybody that they need an education to get better jobs,” says John Silvia, chief economist at Wells Fargo. “So how would young people respond? They stayed in school.”

Fewer than 39 percent of 18- and 19-year-olds are employed, down from 56 percent in 2000. For people ages 20 to 24, the proportion has fallen to 64 percent from 72 percent.

— The number of part-timers who would prefer full-time work remains high.

About 6.5 million workers are working part time but want full-time jobs, up from 4.6 million before the recession began. This is partly a reflection of tepid economic growth. But economists also point to long-term factors: Industries such as hotels and restaurants that hire many part-timers are driving an increasing share of job growth, researchers at the Federal Reserve Bank of San Francisco have found.

As more young adults put off working, some employers are turning to older workers to fill part-time jobs. Older workers are more likely to want full-time work, raising the level of so-called involuntary part-time employment.

Many economists also point to the Obama administration’s health care reforms for increasing part-time employment. The law requires companies with more than 100 employees to provide health insurance to those who work more than 30 hours.

Michael Feroli, an economist at JPMorgan Chase, says this could account for as much as one-third of the increase in part-time jobs.

— Weak pay growth.

The average hourly U.S. wage was flat in June at $24.95 and has risen just 2 percent over the past year. The stagnant June figure dispelled hopes that strong job growth in May heralded a trend of steadily rising incomes.

In theory, steady hiring is supposed to reduce the number of qualified workers who are still seeking jobs. And a tight supply of workers tends to force wages up.

Yet a host of factors have complicated that theory. U.S. workers are competing against lower-paid foreigners. And automation has threatened everyone from assembly line workers to executive secretaries.

Still, economists at Goldman Sachs forecast that average hourly pay will grow at an annual pace of about 3.5 percent by the end of 2016. That is a healthy pace. But it will have taken much longer to reach than in previous recoveries.

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Another Dubious Jobs Report

Source: Prison Planet

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According to the payroll jobs report today (March 6) the economy created 295,000 new jobs in February, dropping the rate of unemployment to 5.5%. However, the BLS also reported that the labor force participation rate fell and the number of people not in the labor force rose by 354,000.

In other words, the unemployment rate dropped because the labor force shrunk.

If the economy was in recovery, the labor force would be growing and the labor force participation rate would be rising.

The 295,000 claimed new jobs are highly suspect. For example, the report claims 32,000 new retail jobs, but the Census Bureau reports that retail sales declined in December and January. Why would retailers experiencing declining sales hire more employees?

Construction spending declined 1.1% in January, but the payroll jobs report says 29,000 construction jobs were added in February.

Zero Hedge reports that the decline in the oil price has resulted in almost 40,000 laid off workers during January and February, but the payroll jobs report only finds 2,900 lost jobs in oil for the two months.http://www.zerohedge.com/news/2015-03-06/did-bls-once-again-forget-count-tens-thousands-energy-job-losses

There is no sign in the payroll jobs report of the large lay-offs by IBM and Hewlett Packard.

These and other inconsistencies do not inspire confidence.

By ignoring the inconsistencies the financial press does not inspire confidence.

Let’s now look at where the BLS says the payroll jobs are.

 photo JobBulletinBoard.jpg

All of the goods producing jobs are accounted for by the 29,000 claimed construction jobs. The remaining 259,000 new jobs–90%–of the total–are service sector jobs. Three categories account for 70% of these jobs. Wholesale and retail trade, transportation and utilities account. for 62,000 of the jobs. Education and health services account for 54,000 of which ambulatory health care services accounts for 19,900. Leisure and hospitality account for 66,000 jobs of which waitresses and bartenders account for 58,700 jobs.

These are the domestic service jobs of a turd world country.

John Williams (shadowstats.com) reports: “As of February, the level of full-time employment still was 1.0 million shy of its pre-recession peak.”

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

 

Midland Unemployment Remains Below 3%

City’s labor force passes 100,000 for first time.  By Mella McEwen

Midland Sunset
Stability continues to dominate Midland’s labor market as summer progresses.

 

Midland’s unemployment rate inched up to 2.9 percent in July from 2.8 percent in June but is well below the 3.6 percent reported last July, the Texas Workforce Commission said Friday. Midland continues to report the state’s lowest unemployment, followed by Odessa at 3.6 percent.

For the first time, Midland’s civilian labor force crossed the 100,000 mark, with the commission putting the labor force at 100,121, up from 98,462 in June.

Midland Mayor Jerry Morales said Midlanders need to understand the city’s population is growing at a 3.5 percent to 4 percent annual rate. Normal growth rate for communities Midland’s size is 1 percent to 1.5 percent, he said.

With more than 100,000 residents at work, “we really need to work on housing, road infrastructure and annexing more land,” he said.

He said he is excited to see so many people working in the community and pleased that Midland has plentiful jobs.

“All industries are looking for all kinds of workers,” he said.

Willie Taylor, chief executive officer of Workforce Solutions Permian Basin, said there is a demand for a wide variety of jobs, from teachers to medical workers to truck drivers. The Permian Basin is “definitely” a job-seeker’s market, he said.

He said he is amazed at the continued growth, given the intense competition for workers.

“Look at the pipeline of potential workforce and work with our schools, our colleges, retired residents returning to the workforce, those recruited from the military,” Taylor said. “There’s a lot of competition and for us to grow as we have is amazing.

“Our biggest concern is making sure we have an adequate workforce.”

Job creation in Midland grew significantly, with 900 jobs being added from June to July for a 1 percent growth rate. Midland’s dominant industrial sector — mining, logging and transportation — continued to dominate job growth, adding 600 jobs from June to July for a 2.2 percent growth rate. Trade, transportation and utilities, financial activities, professional and business services and other services added 100 jobs each. The only loss was 100 jobs in leisure and hospitality. The remaining industrial sectors were unchanged.

For the 12 months between July 2013 and July 2014, Midland added  5,300 new jobs for a growth rate of 6.2 percent. Mining, logging and construction added 3,400 new jobs for a 13.9 percent growth rate. Trade, transportation and utilities added 700 new jobs during that time, followed by leisure and hospitality with 500 new jobs. The only job losses were in education and health services, down 300 jobs, and information, down 100 jobs.

Statewide, the unemployment rate was 5.1 percent, unchanged for the third consecutive month. The state added 46,600 seasonally adjusted non-farm jobs, the commission reported.

“Texas employers continue to propel the Texas economy’s expansion by adding 396,200 jobs over the last year, a 3.5 percent annual growth rate,” said Andres Alcantar, TWC chairman. “The Texas economic engine is strong, with every major industry posting positive annual growth in July.”

All major industries in Texas expanded last month, with professional and business services leading the way by adding 10,600 jobs in July.

“The professional and business services industry is thriving, with opportunities that range from legal advice and representation to security guards to landscaping,” said Commissioner Ronny Congleton. “Industries across the board are hiring, and that is good news for job seekers in Texas.”

Private employers added 42,400 jobs in July, said Commissioner Hope Andrade.

“Mining and logging posted an annual growth rate of 7.8 percent in July, which marked the 51st consecutive month of positive annual growth and underscored the industry’s role in the state’s overall economic success,” Andrade said.

While Midland had the state’s lowest unemployment, the highest was in McAllen-Edinburg-Mission at 9.9 percent.

Just The Facts:
Preliminary local jobless rates for July with June numbers in parentheses:

Midland 2.9 (2.8)

Odessa 3.6 (3.5)

Amarillo 4.1 (4.0)

Abilene 4.5 (4.4)

San Angelo 4.5 (4.3)

Austin-Round Rock-San Marcos 4.6 (4.4)

Victoria 4.6 (4.5)

College Station-Bryan 4.7 (4.6)

Lubbock 4.7 (4.5)

Longview 4.9 (4.8)

San Antonio-New Braunfels 5.2 (5.1)

Corpus Christi 5.4 (5.3)

Fort Worth-Arlington 5.4 (5.3)

Sherman-Denison 5.4 (5.3)

Dallas-Plano-Irving 5.5 (5.4)

Houston-Sugar Land-Baytown 5.5 (5.4)

Tyler 5.5 (5.4)

Wichita Falls 5.6 (5.4)

Waco 5.8 (5.6)

Laredo 6.3 (6.2)

Killeen-Temple-Fort Hood 6.4 (6.2)

Texarkana 6.5 (6.3)

El Paso 7.7 (7.6)

Beaumont-Port Arthur 8.3 (7.8)

Brownsville-Harlingen 8.9 (8.8)

McAllen-Edinburg-Mission 9.9 (9.6)