When analyzing data over a short period of time (one or two months), any change in the detail in the data may be a reporting anomaly or the beginning of a new trend. Trying to analyze two poor months of poor employment data (analysis here) involves too much subjectivity – and not enough objectivity.
What the provable trends are saying:
- Planned layoffs are near all time lows.
- Initial unemployment claims are elevated – and in a territory normally seen only during recessions.
- Jobs growth in 2011 is now averaging 126,000 per month – below the rate of 150,000 which is considered the workforce growth rate.
- Since the end of the recession – total cumulative jobs growth has only been 22,000. That is an average of less than 1,000 new jobs a month for a current workforce of over 131,000,000.
The first and second bullets above appear to be in contradiction. Consider that planned layoff data is built on big business data while initial unemployment rates are for all business. Remember the BLS has to use a “birth-death” model to ESTIMATE what small business is really doing.
The BLS’ establishment data does not segregate business by size – but ADP does. The takeaway from the above graphic:
- The red bars on the above graph are the contribution of big business to employment (source ADP). Seems like just a small amount. Maybe the below graphic will put it in a better perspective – big business is a drag on the economy from a jobs point of view.
- The historical correlation between initial unemployment claims and jobs creation is not present in the recovery from the 2007 Great Recession. One guess is that the unstimulating stimulus distorted this relationship.
- It is ONLY small and medium business that is growing jobs. this is not a new phenomenon but has been present since 2000.
Big business is a headwind to the jobs growth engine in the new normal. Jobs are created by small and medium size business.
June 2011 Jobs Report Shows No Sign of Impending Recession by Steven Hansen
June 2011 BLS Employment Worsens by Steven Hansen
June 2011 ADP Employment Growth: Not Good, Not Bad by Steven Hansen
Is A Budget Deficit Necessary for an Economy? by Steven Hansen
What’s Up With Employment? by Steven Hansen
JOLTS: Likely Indicating Slowing Employment Growth by Steven Hansen
Is the Stimulus Effecting Unemployment Claims? by Steven Hansen
College Training for Unemployment by Mike Konczal
Economic Damage Storm Track of The Great Recession by Ted Kavadas