Friday, December 7, 2012

Quick look at today's just release Employment Report. Unemployment rate decreased but probably for the wrong reason...

Basic data from the Employment Report for November that was just released today by the Bureau Labor Statistics (

The first graphic below (clipped from the actual report) shows the overall numbers used to calculate the Unemployment Rate. 

The primary reason the unemployment rate decreased from 7.9% to 7.7% is from a decline in the "Civilian Labor Force" (highlighted in yellow) of 350,000 people.  This means 350,000 people left the labor force for some reason.  It could have been they gave up looking for work altogether, they returned to school full time, or retired.  This last reason is probably a big mover of that number, but that is hard to parse from the avalable data.  It appears the rate is decreasing not because of significant job creation, but because of a smaller labor force as a result of people exiting the work force.

The civilian labor force is the sum of the number of EMPLOYED and UNEMPLOYED in the economy. 

Be careful! When I say "Unemployed" I mean the number of people OFFICIALLY classified as unemployed by the BLS according to their definition. 

This second graphic shows the general categories of jobs and how many (in thousands---add 3 zeroes to the numbers you see below) were created in each category. I higlighted the significant numbers.

Retail, as expected with holiday hiring, led the way.  The perponderance of these jobs are likely part-time jobs to staff stores and will dissappear in January/February.  These jobs accounted for 36% of the jobs created in November. If one is looking at the quality of jobs, it is open to intrepretation as to whether this is a positive sign or not.

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