econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 04 December 2016

The Labor Market Working Nine To Five

by Danielle DiMartino Booth, Money Strong

Money Strong Article of the Week

Few scenes elicit laughter more than a hog-tied, dog-collared Dabney Coleman swinging from the ceiling struts of his own bedroom.

boss.hoist.9to5.380x220

You already know I’m referring to that perfect moment in Nine to Five. Franklin Hart, Jr., the 1980 film’s dredge of humanity boss, laboriously labeled a “sexist, egotistical, lying, hypocritical bigot," had just been caught attempting to make a break from his exasperated employees’ bondage. Seeing that he was about to spring an attack in a mirror image, a fleet-footed Dolly Parton, who shines as the harassed Doralee, hits the contrived garage door clicker, hoisting her grab-happy boss into the rafters.

Productivity

The movie provides a great case study in the power of productivity. Multitudes of Millennials would be hard pressed to even identify the clickety typewriters in the opening scene to say nothing of the grid layout of miles of cubicles. Long since displaced by the ubiquitous PC and virtual workplace, today we find ourselves in a completely different world. But then, productivity gains have also died off in this new era leaving economists in a constant funk trying to conceive a way out of the conceptual conundrum.

November Employment Report was No Blowout

Without question, job creation has not been an issue of late. Hopes headed into November’s job market report were particularly high with the positives outweighing the negatives by a wide margin. The flip side of Hurricane Matthew was expected to tack on an extra 20,000 jobs, give or take. The ADP report topped predictions while announced layoffs validated uber-low jobless claims, coming in at their lowest pace of the year. For good measure, the Conference Board’s gauge of job availability improved, reversing October’s weakness.

Meanwhile, the economists over at Goldman Sachs sweetened expectations with a friendly reminder that November is a seasonal sweetheart, tending to deliver an upside surprise two-thirds of the time to the tune of 27,000 extra jobs. Tack on last month’s warm weather and the groundwork was laid for a blowout report.

Hence the inducement of carpal tunnel among the instant reaction folks as they furiously revised what they’d prewritten to conform to the confusion in the actual data.

Rather than the whispered 200,000-plus handle, CNBC’s Hampton Pearson revealed a mere 178,000 jobs had been created. While close to the forecasted 180,000, private payroll growth of 156,000 was shy of the predicted mark by 20,000.

Labor Force Participation

And what about that unemployment rate? The 4.6 percent reported wasn’t even in the same zip code as consensus projections of a 4.9-percent rate. As has been the case so often in the current recovery, the decline cannot be categorized as unequivocally good news. While the lowest since August 2007 makes for a great sound bite for the current administration, the fine print exposed the weightier factor dragging the rate down was shrinkage in the size of the workforce: at 62.7 percent, the labor force participation rate slumped back to a six-month low.

Broadening out to the entire pool of possible participants, those absent from the labor force increased by almost half a million to 95.05 million, a fresh record high. Bookmark Advisors’ Peter Boockvar incredulously asked, “WTF are so many of them doing?" Great question.

Current Cycle Manufacturing Peak

One thing they’re not doing is adding to the ranks of those gainfully employed on our nation’s factory floors.

According to the Liscio Report, the best days of the current cycle for manufacturing employment are in the rearview mirror:

“Since the depths of the recession, overall manufacturing employment has been on the upswing, although currently teetering. As the culmination of a multi-decade decline, manufacturing employment fell from over 14 million workers in 2007, to 11.3 million in 2010, and then rose to 12.3 million in 2016."

Durable Manufacturing

Before it slips off your tongue, yes, yes, we’re a services economy. While that’s all good and well, a recent visit with Dr. Gates, yours truly’s business cycle sleuth extraordinaire, whose identity must remain in the realm of the unknown, added some much-needed historic perspective. (Does no one read history anymore?) Gates explained:

“Durable manufacturing is the single most important employment engine. Why? It has lost the most jobs in all 12 recessions since and including World War II."

Granted, you’d best not set your clock by this indicator. Sometimes manufacturing peaks on the early side, up to 24 months before the onset of a recession; at others, the peak lags, though not by any longer than 12 months. In case you’re wondering, in the current cycle, the peak occurred 19 months ago, in May 2015. Since then, durable manufacturing jobs have fallen by 113,000.

Does that mean the patient we know as the U.S. economy is already dead on arrival? Well, not exactly. Again, from Gates:

“Not every business cycle falls on its face; some erode over time. That erosion creates vulnerabilities which surface in the late stage of the cycle. “That’s where durable manufacturing steps in, giving an early warning signal that the business cycle is coming to a close."

Repostings of Job Openings

Another signpost that signals the end is nigh is a rolling over in re-postings of job openings. Some discount online help wanted ads as false indicators given the rise in the cost to post them. Fair enough. If a company really needs to fill a position to grow their top and bottom lines, though, it’s going to pony up the expense to land that laborer. That is, unless and until prospects for revenue and profit growth are ratcheted downwards, at which point they’re compelled to delist that opening. That’s exactly what’s been happening since November 2015, when re-postings peaked.

Will you read about any of this in your weekend newspaper? Probably not. The mass media will focus on that 4.6-percent unemployment rate and the stellar news it conveys at the surface. The job market will be pronounced to be as healthy as a horse, working 9 to 5, and maybe even a bit of overtime.

The truth is probably closer to what Dolly belted out in the Academy Award winning song that shares the movie’s title, that serious job seekers should pour themselves a “cup of ambition" given the late stage of the current cycle. On second thought, if the end really is near, they might need to make it a double espresso.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Opinion


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Democratic Development Lowers the Cost of Credit
Is Growing Household Debt An Economic Counter-Dynamic?
News Blog
Did The Dodd-Frank Act Make The Financial System Safer?
A Close Look At The Decline Of Homeownership - Part Five Of Five
Do Institutional Investors Chase Returns?
Infographic Of The Day: How To Survive A Deadly Snake Bite
Early Headlines: Global Mfg 1970-2010, No Refugee Spike, GOP Health Proposal Leak, GOP Town Halls, Trump's Debt Decrease, Macron Gains, China's $9 Trn Moral Hazard, Americans Oppose Wall And More
Premium Seats At Premium Events Equal Premium Prices
Earnings And Economic Reports: Week Starting 27 February 2017
Time Crystals: How Scientists Created A New State Of Matter
Cost Of War Against ISIS Reaches 11 Billion Dollars
What We Read Today 25 February 2017
Candid Camera Classic: Dirty Clean Words
How Reliable Are GDP Consensus Forecasts?
What You Don't Know About Your Policy Can Hurt You... Financially
Investing Blog
Snapchat Is In The Money Burning Business
Technical Thoughts: How To Buy The Dips
Opinion Blog
Why Winning The French Presidential Election Could Be A Poisoned Chalice
Unintended Consequences Of Corporate Tax Incentives
Precious Metals Blog
Deflation And Gold: A Contrarian View
Live Markets
24Feb2017 Market Close: Wall Street Rose From Session Lows To Close In The Green Near The Unchanged Line, Short-Term Indicators And Analysts Questioning Continuing Bull Run
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved