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Jobless claims fall to lowest level since early 2006

Kushinator

Kushinator

I'm not-low all the time
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Reuters said:
The number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8-1/2 years last week, suggesting the labor market recovery was gaining traction.
Initial claims for state unemployment benefits declined 19,000 to a seasonally adjusted 284,000 for the week ended July 19, the Labor Department said on Thursday.
That was the lowest level since February 2006, and confounded economists' expectations for a rise to 308,000.
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It looks as though labor markets are beginning to pick up a considerable amount of momentum. Persistent employment growth coupled with this sudden drop in new claims figures to set the stage for a reversal in real output growth. U.S. real GDP declined by 2.9 % in the first quarter of 2014, initially stoking fears of an impending recession. Yet that figure seems to be an outlier which can be attributable to a weakness in private inventory investment. Second quarter output data will be released this Wednesday (the 30th) and should shed a considerable amount of light on the U.S. economy.

The rest of the article can be found here.
 
The workforce participation rate is the lowest in 36 years, no matter how you juke the other stats the jobs just aren't there
 
Kushinator said:
It looks as though labor markets are beginning to pick up a considerable amount of momentum. Persistent employment growth coupled with this sudden drop in new claims figures to set the stage for a reversal in real output growth. U.S. real GDP declined by 2.9 % in the first quarter of 2014, initially stoking fears of an impending recession. Yet that figure seems to be an outlier which can be attributable to a weakness in private inventory investment. Second quarter output data will be released this Wednesday (the 30th) and should shed a considerable amount of light on the U.S. economy.

The rest of the article can be found here.
Click to expand...

Unscientifically speaking, a normal business cycle has around seven to ten years in it. say 2008 was the trough. We should be getting close to the top. ;)
 
Crovax said:
The workforce participation rate is the lowest in 36 years, no matter how you juke the other stats the jobs just aren't there
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Here are some figures regarding U.S. population demographics:

  • The average prime working age LFPR since 2007 is 82.0%, and the average 55-and-over LFPR since 2007 is 40.1%
  • The size of the 55-and-over population has increased by 15.619 million relative to that of the prime working age population since 2007
  • 15.619 million multiplied by the difference between the two participation rates (82.0% - 40.1%) implies that this simple demographic shift alone has left only 6.544 million workers at the end of 2013 where there were 15.619 million at the end of 2007
  • Subtract that 6.544 million still in the labor force from the 15.619 million who made the shift from the first bucket to the second bucket and you get 9.075 million people 55 years of age or over who have left the labor force over the past six years

left-labor-force-1.png


Source
 
Not to mention the quality of jobs...
 
joG said:
Unscientifically speaking, a normal business cycle has around seven to ten years in it. say 2008 was the trough. We should be getting close to the top. ;)
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Statistically speaking, expansion durations (previous peak through trough) have averaged 38.2 months going all the way back to 1857. Since 1945, expansion durations have averaged 54 months and since 1980 this figure has increased 31% to 71 months.

Source
 
KevinKohler said:
And the last info I had seen showed that most of our job growth was in part time and temp jobs...
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So if it doesn't transition into a general lowering of median wages, what does that tell you?
 
Crovax said:
The workforce participation rate is the lowest in 36 years, no matter how you juke the other stats the jobs just aren't there
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The Labor Force Participation Rate has nothing to do with the existence or non-existence of jobs. The LFPR is simply the percent of the adult civilian non-institutional population that is working or trying to work. Demographic changes have more to do with it than labor market conditions.
 
Kushinator said:
So if it doesn't transition into a general lowering of median wages, what does that tell you?
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Median wouldn't be affected...we still have more full timers than part timers, despite the addition of consistently crappy jobs to the US labor market.


I could be wrong though. I'm always open to good news. I cannot, however, ignore what I personally see...and that is a shift from 37.5 hours a week to 27.5 a week. Slow...but steady.
 
Kushinator said:
It looks as though labor markets are beginning to pick up a considerable amount of momentum. Persistent employment growth coupled with this sudden drop in new claims figures to set the stage for a reversal in real output growth. U.S. real GDP declined by 2.9 % in the first quarter of 2014, initially stoking fears of an impending recession. Yet that figure seems to be an outlier which can be attributable to a weakness in private inventory investment. Second quarter output data will be released this Wednesday (the 30th) and should shed a considerable amount of light on the U.S. economy.

The rest of the article can be found here.
Click to expand...

There are two aspects to this statistic....

1) Baby boomers are leaving the work force en masse, due to retirement. I am retiring myself at the end of the year.

2) What kind of jobs are people getting, and what is the pay? Although there are a number of manufacturing job being created, they are far outpaced by low-wage service industry jobs. IMHO, a fry cook McJob is not the kind of job we need to be bragging about.

All in all, it is going to be a generation before the economy improves to a point that is comparable to what we had before the Great Recession began. Yes, they say that we are out of recession, but the economy is weak, and will remain weak for some time to come. This is nothing that Obama or anybody else has a fast fix for. If the GOP says they can end this quickly, then they are lying to you.
 
Kushinator said:
If the "quality of jobs" was in such decline, we would be observing consistent declines in median weekly earnings of full-time wage and salary workers.
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Not necessarily.

If full time jobs are being replaced with part time jobs, then the 'quality of jobs' DEFINITELY declines.

Last month, according to he BLS, 523,000 full time jobs were lost for 799,000 part time jobs gained.

Based on the average hours worked per job, that is a significant loss in hours worked.

Table A-9. Selected employment indicators

It matters little what the full time jobs are paying if they are declining in number.
 
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Kushinator said:
Statistically speaking, expansion durations (previous peak through trough) have averaged 38.2 months going all the way back to 1857. Since 1945, expansion durations have averaged 54 months and since 1980 this figure has increased 31% to 71 months.

Source
Click to expand...

Thank you for the link. But what do you think that means?
 
Good !

Then the FED can stop QE !

We've met their arbitrary standard for stopping it have we not ?
 
pinqy said:
The Labor Force Participation Rate has nothing to do with the existence or non-existence of jobs. The LFPR is simply the percent of the adult civilian non-institutional population that is working or trying to work. Demographic changes have more to do with it than labor market conditions.
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No they don't, the participation rate started dropping at the exact time the recession started. Most of the baby boomers are already to old to even be in the rate calculation. It cuts off at 65 so no matter how much of our population is over 65 that can't change the rate at all.
 
DA60 said:
Last month, according to he BLS, 523,000 full time jobs were lost for 799,000 part time jobs gained.
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Fixating on a single data point while ignoring both the long term trend and seasonality patterns signifies a bias to the downside.

2.1 million full-time jobs were created year over year, while only 10 thousand part-time jobs were created in that same time. Furthermore, 6 of the last 10 observations from May into June show a decline in full time and an increase in part time.
 
Crovax said:
No they don't, the participation rate started dropping at the exact time the recession started.
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Correlation does not imply causation.

Most of the baby boomers are already to old to even be in the rate calculation. It cuts off at 65 so no matter how much of our population is over 65 that can't change the rate at all.
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You just made that up.
 
Crovax said:
No they don't, the participation rate started dropping at the exact time the recession started. Most of the baby boomers are already to old to even be in the rate calculation. It cuts off at 65 so no matter how much of our population is over 65 that can't change the rate at all.
Click to expand...

Of course the recession would have an effect as well...I didn't say demographics were the only reason for change.

And no, there's no cut off of 65. I have no idea where you got that idea. It's true in most of Europe but the U.S. has never had a max age for labor force statistics.
 
Gimmesometruth said:
Well, since 2009, we are seeing those declines in real terms.
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Yes, but in 2009 there was real deflation which skews the data. Real wages are roughly what they were 10 years ago.
 
Kushinator said:
Yes, but in 2009 there was real deflation which skews the data. Real wages are roughly what they were 10 years ago.
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Deflation in prices, not so much in wages (sticky), which should have caused real wage inflation.

Again, your claim was that if job quality was declining, we would see that in wages. We have, since 2009.
 
Crovax said:
No they don't, the participation rate started dropping at the exact time the recession started.
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This is an inaccurate characterization.

The LFPR did drop due to the recession, and isn't going up. However, the peak was actually in 2001.

PR1.jpg



We should also note that men have been steadily leaving the workforce since 1950:

01ecoact-1.gif


The reason why LFPR has been increasing since the 1950s is basically because women were joining the workforce.

There are some short-term influences; e.g. people are retiring early or spending more time in school because of the recession. But there really aren't a lot of policy changes that are affecting LFPR.
 
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