The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Friday, February 5, 2016

January Jobs Report; President's Presser

If you are reading this piece, you are an informed person who already know data embed in the following chart.  I also suspect you know the jobs and economic record of the nation's 43rd President and its roots in "trickle-down / supply-side" economics. 

After the chart, I have posted a White House dot Gov piece regarding the January "jobs numbers", and the reality of yet another mark in US history where Democratic ideology and Administrations have reversed the ravages of supply-side economic policy and practice.

Cleveland dot com

In January, the unemployment rate fell below 5 percent for the first time in eight years as the longest streak of private-sector job growth on record continued.
The unemployment rate reached 4.9 percent in January for the first time since February 2008, and the labor force participation rate has been essentially stable over the past year. Just two years ago, many economists expected the unemployment rate to remain above this level until 2020. Our businesses added 158,000 jobs in January, somewhat below the pace of recent months but well above the pace necessary to maintain a low and stable unemployment rate. Most importantly, wages rose 2.5 percent over the past year, and the 2.9-percent annualized pace over the past six months is the strongest since the recovery began. Nevertheless, more work remains to drive further job creation and faster wage growth, including passing the President’s new proposal for ambitious investments in 21st-century clean infrastructureopening our exports to new markets with the Trans-Pacific Partnership, and raising the minimum wage.
1. Businesses have now added 14.0 million jobs over 71 straight months, extending the longest streak on record. Today we learned that private employment rose by 158,000 jobs in January, while private employment growth in November and December was revised up by a combined 15,000 jobs. Total nonfarm employment rose by 151,000 jobs in January, somewhat below the pace of recent months but well above the pace necessary to maintain a low and stable unemployment rate, which CEA estimates at 80,000 per month. The unemployment rate reached 4.9 percent for the first time since February 2008, as the labor force participation rate edged up to 62.7 percent, the same level as in March 2015. Over the last six months, average hourly earnings for all private employees rose 2.9 percent at an annual rate, the fastest pace since the recovery began. Over 2014 and 2015, the private sector added 5.5 million jobs, the most in any two-year period since 1999.
Private Sector Payroll Employment
2. Initial estimates job growth and GDP growth have been especially disconnected in the current recovery. In general, stronger quarterly job growth is associated with stronger quarterly GDP growth. This pattern was consistent in expansions from the 1960s until 2001. But the current recovery, initial estimates of quarterly job growth and quarterly GDP growth have been much less closely correlated. This disconnect was especially clear in the fourth quarter of 2015, when GDP growth was 0.7 percent and employment growth was initially estimated to be 2.4 percent. While such discrepancies are in part due to fluctuating productivity growth, measurement error is likely playing a role. This illustrates the importance of focusing on a wide range of indicators – especially labor market data, which tend to be less noisy – in assessing the health of the economy.
Quarterly GDP Growth and Employment Growth
3. While the unemployment rate for African Americans has fallen below its pre-recession average, more work remains to close long-standing disparities in the labor market. The unemployment rate for African Americans peaked at 16.8 percent in March 2010, after experiencing a larger percentage-point increase from its pre-recession average to its peak than the overall unemployment rate did. Since then, the African-American unemployment rate has seen a larger percentage-point decline in the recovery, falling almost twice as fast as the overall unemployment rate over the last year. The recovery in the unemployment rate has been particularly strong for African-American teens, though adult men and women have also seen their unemployment rates fall below their pre-recession averages. Nevertheless, the current African-American unemployment rate—8.8 percent as of January 2016—remains too high. That’s why the Administration has proposed a number of initiatives—including the My Brother’s Keeper initiative for young men of color and new investments in skills training and apprenticeships—to ensure that the benefits of our strong labor market are shared among all Americans.
Unemployment Rates by Race/Ethnicity
4. While rates of hires and separations have risen in the recovery, a long-run trend of declining labor market “churn” remains. 
Private-Sector Hires
5. The distribution of job growth across industries in January diverged sharply from recent trends, with strong growth in sectors including manufacturing but other sectors reporting below-trend changes in employment. Both manufacturing (+29,000) and retail trade (+58,000) saw their strongest growth in the past twelve months, while financial activities (+18,000) and wholesale trade (+9,000) also saw notable above-trend growth. Mining and logging (-7,000) saw a moderation in its decline, though low commodity prices continue to weigh on the sector. At the same time, utilities (-300), transportation and warehousing (-20,000), and private educational services (-39,000) all saw weaker-than-average job growth. Across the 17 industries shown below, the correlation between the most recent one-month percent change and the average percent change over the last twelve months was 0.49, below the average correlation over the previous three years.
Employment Growth by Industry
As the Administration stresses every month, the monthly employment and unemployment figures can be volatile, and payroll employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, and it is informative to consider each report in the context of other data as they become available.

As I finished development of this piece, I listened as Mr. Conservative, David Gergan, and CNN's ratings hound, Ashleigh Banfield, worked to "poo-poo" the January jobs numbers. When networks end news segments with dire warnings of pending doom (regarding the coming elections), network producers do the nation a serious disservice. The jobs numbers are what they are. Banfield, Gergan and network producers are nothing shy of 'bad-message' demagogues when they fail to recognize and acknowledge the extent to which world markets, economic downturn in China and other lowered non-US economic indicators have on the US economy and decisions to *hire* impact the US economy.

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