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Tuesday, May 1, 2012

April 2012: Unemployment Numbers This Week


This article discusses jobs numbers as of April 2012:
Current reports and links can be found HERE.

Four unemployment reports were published or will be published this week. 


Additionally, the Institute for Supply Management released its April 2012 report today which contains an Employment Overview as well as its usual manufacturing report.

Highlights to date:
  • The monthly BLS Employment Situation Report was released this morning.  The economy added 115,000 jobs; March jobs numbers were revised upwards by 50,000, unemployment clicks down by .1%. Fewer people are unemployed due to permanent jobs loss than at any time since late 2008. 
  • The BLS Business Employment Dynamic report shows more robust employment activity in the third quarter of 2011, from July to September 2011, than previously reported.  In fact, it reported the largest net job gain since the first  quarter of 2006. 
  • The Institute of Supply Management's Employment Index registered 57.3 percent in April, which is 1.2 percentage points higher than the 56.1 percent reported in March.  This is the 31st consecutive month of growth in the Employment Index.
  • The ADP National Employment Report was disappointing, showing only 119,000 private sector jobs added according to its estimates.  This report showed a contraction in manufacturing jobs, whereas the ISM report showed that manufacturing jobs probably increased in April.
  • The Weekly Initial Claims Report shows a decrease of first time filings for unemployment compensation for the third week of April 2012.  The number of claims had been up somewhat over the past three weeks, and the number has now decreased in line with the numbers for March.  Don't miss my explanation and chart!

The four employment reports are:

  • The big monthly Bureau of Labor Statistics jobs and unemployment report was released Friday morning, May 4th.  Watch for updates and summaries HERE!
  • The Business Employment Dynamics report for the 3rd Quarter 2011 was released this morning, May 1st.  As it summarizes employment activity in 2011, it doesn't provide much new information, but it does confirm what we already knew:  That job growth in the private sector was more robust during the third quarter 2011 than it seemed to be at the time.  The monthly Employment Situation reports of July, August, and September 2011 released at the time reflected an increase in private job employment of a total of only 304,000.  (Remember the nasty comments surrounding the "zero" job growth in August 2011.. which was later adjusted up to +85,000 new jobs?)  The BLS "Establishment survey" has now changed that estimate to an increase of 443,000 private sector jobs in those same three months.  This report, based on more complete employment numbers as reported to the federal government, shows an increase of 753,000 jobs during that quarter.  (The monthly employment reports use estimates which are improved and finalized over a period of subsequent months; they use somewhat different populations than does the quarterly BED report.)  Here's the Business Employment Dynamic summary:
From June to September 2011 gross job gains  from opening and expanding private sector " establishments were 7.1 million, an increase  of 166,000 jobs from the previous quarter, the  U.S. Bureau of Labor Statistics reported  today. Over this period, gross job losses from  closing and contracting private sector  establishments were 6.3 million, a decrease of  9,000 jobs from the previous quarter.   The difference between the number of gross  job gains and gross job losses yielded a net  employment change of 753,000 jobs in the  private sector during the third quarter of 2011.   This is the largest net job gain since the first quarter of 2006. 
  • The ADP monthly employment report is based on the payroll processor's monthly survey of private corporations.  Though in any one month it may differ from the BLS report, over time, they parallel each other.  ADP releases its monthly report the first Wednesday of the month, just a couple of days in advance of the BLS numbers.  It is a well-regarded harbinger of the BLS report.  The ADP Report, which was released  Wednesday, May 2nd, estimates that 119,000 private sector jobs were added in April.  The forecasters were hoping for 170,000 more jobs, so many are considering this report disappointing.  This report shows a decrease of 5,000 jobs in manufacturing, whereas the Institute for Supply Management report released yesterday (see below) showed that manufacturing jobs probably grew quite a bit last month.  Moral:  Take all of these reports with a grain of salt.  They really only make sense when one looks at trends over a period of months.
  • The weekly unemployment claims report is released every Thursday.  It tells us how many people are filing for and collecting unemployment benefits for the previous week and it updates the numbers of those claims for the two prior weeks.  One week usually doesn't mean much as this report is much more volatile than the monthly report and is affected by weather and occasionally skewed seasonal adjustment factors.  However, this report, followed over a period of weeks, is also considered a good harbinger of the unemployment and jobs pictures.  As the first time claims, while continuing their downward trend, have been a bit weak over the past three weeks, this week's report will be important. Here's the summary (with a chart) of this report which was released Thursday morning, May 3rd. 
The Institute for Supply Management Monthly Manufacturing Report:  Employment Section


ISM's Employment Index registered 57.3 percent in April, which is 1.2 percentage points higher than the 56.1 percent reported in March. This is the 31st consecutive month of growth in the Employment Index. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Of the 18 manufacturing industries, 13 reported growth in employment in April in the following order: Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Machinery; Furniture & Related Products; Miscellaneous Manufacturing; Transportation Equipment; Apparel, Leather & Allied Products; Paper Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; and Chemical Products. The three industries reporting a decrease in employment in April are: Computer & Electronic Products; Petroleum & Coal Products; and Printing & Related Support Activities.

Employment
%
Higher
%
Same
%
Lower

Net

Index
Apr 2012345412+2257.3
Mar 2012256312+1356.1
Feb 2012265816+1053.2
Jan 2012235918+554.3
"Net" vs. "Gross" jobs numbers?

Some Bureau of Labor Statistics reports, such as the JOLTS (Job Openings, Layoffs and Turnovers Survey), use Gross jobs numbers.  That report will tell us how many job openings there are, how many people were laid off, how many people quit, how many were hired.  The weekly initial unemployment claims report also uses Gross numbers.  Those reports tell us exactly how many people filed for unemployment claims and how many were collecting unemployment benefits.

Now the monthly reports use Net jobs numbers.

The number of jobs that is discussed on the first Friday of each month is a NET number:  You may hear that 80,000 jobs were created or added or 5,000 government jobs were lost.  If 80,000 jobs were created, this means that the number of people that were added to payrolls during the month was greater than the number of people who left the payrolls during that month.

If you hear that 5,000 government jobs were lost, this means that the number of people dropped from government payrolls was greater than the number of people added to government payrolls during the month.

The monthly BLS report does not attempt to tell us how many individual jobs were added in gross numbers and how many individual jobs were subtracted in gross numbers; it gives us a total of either all gains after all losses have been subtracted or all losses after all gains have been added.  The monthly jobs number is therefore a NET number.      

1 comment:

  1. I really like this site and think I will bookmark it. It seems pretty objective. However I will make clear I think Obama is a great President, I just hope the economy keeps growing enough between now and November that he is re-elected

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