bureau of labor statistics

Economix: Private Sector Up, Government Down

August 5, 2011 by NewsMaker Leave a Comment

DAVID LEONHARDT

Thoughts on the economic scene.

As weak as the economy has been in recent months, the private sector has still been adding jobs at a faster rate than the adult population has been growing. Over the last 12 months, the private-sector employment has grown by 1.7 percent, while the adult population has grown about 1 percent, according to Haver, a research firm, and the Bureau of Labor Statistics:

Source: Bureau of Labor Statistics, via Haver AnalyticsAnnual private-sector job growth (blue) vs. population growth (red).

Yet the percentage of adults with jobs has been falling:

Bureau of Labor Statistics, via Haver Analytics

How could this be? Because the government — especially state and local government — is cutting jobs:

Source: Bureau of Labor Statistics, via Haver Analytics

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Filed Under: Economy News Tagged With: bureau of labor statistics, economy, state and local government

Off the Charts: Usual Growth Leaders Absent in Current Recovery

July 29, 2011 by NewsMaker Leave a Comment

Since the recession officially ended in June 2009, the number of government jobs has fallen 2.2 percent. In no other recovery since World War II has there been a decline over a similar period.

In recoveries before 1990, construction employment was always a contributor to economic growth, often a leading one. In part, that was because recessions were sometimes caused by the Federal Reserve pushing up interest rates. In an era when the rates that banks could pay on savings accounts were limited, that cut off the supply of mortgage credit. Fed easing meant that banks could lend again, and sometimes the results were explosive.

But in this recession the collapse in construction jobs came despite low interest rates. Easy credit had led to significant overbuilding, and the slump in construction employment, which began in mid-2006, has continued even after the National Bureau of Economic Research concluded that the recession was over.

Overall construction employment is down 28 percent from the peak. Before this cycle, the largest postwar decline had been 18 percent in 1974-75. That decline did not begin until the 1973-75 recession was well under way, and ended only a few months after the recession did.

The number of jobs in state and local government has declined in 21 of the last 24 months, according to seasonally adjusted figures from the Bureau of Labor Statistics, as many governments have been forced by declining tax revenue to seek savings. There was a brief blip in federal government employment because of temporary work for the 2010 census, but overall federal employment has grown at a very slow rate.

The recoveries that began in 1991 and 2001 came to be known as jobless recoveries, so being comparable to them is no great accomplishment. But over all, jobs growth during the first two years of recovery has been a little better than after the 2001 downturn but a little worse than after the 1990-91 recession.

As can be seen from the accompanying charts, private sector employment, excluding construction jobs, has been a little better than after the two previous downturns.

To some economists, the high unemployment rate for construction workers creates an opportunity for badly needed spending on roads, bridges and schools. “The need for infrastructure spending is as great as ever, if not greater, than in the entire postwar period,” said Henry Kaufman, who runs his own advisory firm.

But that seems unlikely to happen, since current political pressure calls for reduced government spending. That pressure is also likely to lead to more layoffs in state and local governments, particularly when schools reopen in the fall. The targeted stimulus spending that might accelerate the recovery and prevent more layoffs is not on the Washington agenda.

Floyd Norris comments on finance and the economy at nytimes.com/norris.

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Filed Under: Business News Tagged With: bureau of labor statistics, construction employment, federal employment

Economix: College Is (Still) Worth It

July 22, 2011 by NewsMaker Leave a Comment

CATHERINE RAMPELL

Dollars to doughnuts.

The Bureau of Labor Statistics has produced the following chart showing weekly earnings by ethnic group and education, broken down into quartiles. It provides yet another excuse to talk about why college is worth it:

Take a look at the right side of the chart, which shows earnings by education. The median weekly earnings for college graduates are $1,043. Not bad, especially when you consider that the median weekly earnings for a high school graduate are $643.

What’s more impressive, though, is that even the economic underachievers among college graduates earn more than the typical high school grad: A college graduate at the 25th percentile makes $730 per week, which is still 13.5 percent more than the median high school grad.

Things only get worse for high school dropouts. A high school dropout in the 75th percentile — that is, a worker who earns more than do three-quarters of all equally educated workers — makes less than a college graduate in the bottom quartile of his or her educational class.

The bottom line is that college can be very expensive, and certainly doesn’t guarantee a high-paying job and a cushy lifestyle, but at the very least it almost guarantees a higher-paying job and a cushier lifestyle than what you’d get without it.

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Filed Under: Economy News Tagged With: bureau of labor statistics, college graduates, school graduate

Economix: The Wageless, Profitable Recovery

June 30, 2011 by NewsMaker Leave a Comment

Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth.

The study, “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009,” said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery.

According to the study, between the second quarter of 2009, when the recovery began, and the fourth quarter of 2010, national income rose by $528 billion, with $464 billion of that growth going to pretax corporate profits, while just $7 billion went to aggregate wages and salaries, after accounting for inflation.

The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades, the study found.

“The lack of any net job growth in the current recovery combined with stagnant real hourly and weekly wages is responsible for this unique, devastating outcome,” wrote the report’s authors, Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin and Sheila Palma.

According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.

The authors said another factor explaining the weak performance for aggregate wages and salaries was the slow growth in weekly hours during the recovery. At the same time, worker productivity has grown just under 6 percent since the recovery began, helping to keep employment down while lifting corporate profits, the study said.

Professor Sum noted that the aggregate wage and salary figures exclude employer contributions to benefits and payroll taxes, while they include bonuses, overtime, commissions and tips.

He said that nonwage benefits rose in real terms by $27 billion during the first seven quarters of the recovery. “These small gains were exactly offset by a similar $27 billion loss in real wages and salaries over the same time period based on newly released data from the Bureau of Economic Analysis,” he said. “It was a wageless and jobless recovery.”

The study called that $27 billion loss in aggregate wages and salaries during the seven quarters after the recovery began “the first ever such decline in any post-World War II recovery.”

The study said that of the previous recoveries since the 1970s, the recovery following the 2000-1 recession was next worst in terms of the share of increased income going to wages and salaries. The study found that 15 percent of income growth went to aggregate wages and salaries in the six quarters after the recovery began following that recession, while 53 percent went to corporate profits. The growth in national income can also go to net interest, rental income or proprietors’ income.

The story was very different for the recovery that began in 1991. In that recovery, 50 percent of the growth in national income went to wages and salaries during the first six quarters after the recession ended, while corporate profits actually fell by 1 percent during that period.

With regard to corporate profits, the report noted that the preliminary estimate for the first quarter of 2011 was $1.668 trillion, an increase of $465 billion of just under 40 percent since the recovery began.

“Aggregate employment still has not increased above the trough quarter of 2009, and real hourly and weekly wages have been flat to modestly negative,” the report concludes. “The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders.”

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Filed Under: Economy News Tagged With: bureau of labor statistics, employee compensation, wages and salaries

Stocks & Bonds: Markets Rise Sharply on Retail Sales and Other Economic Data

June 16, 2011 by NewsMaker Leave a Comment

Analysts described the stronger market, which represented the Dow’s biggest gain this month, as a relief rally.

David Krein, a senior director for Dow Jones Indexes, said investors were pleased with the retail sales report. Best Buy’s fiscal first-quarter results also helped buoy the markets, Mr. Krein said.

The company reported earnings of $136 million, or $0.35 a share, compared with $155 million, or $0.36 a share, for the same period in 2010. The results beat forecasts, and shares of Best Buy rose more than 4.5 percent to $30.13.

An indicator of consumer purchasing from the Commerce Department showed that overall retail sales in May declined by 0.2 percent, less than the 0.5 percent fall that had been forecast by analysts surveyed by Bloomberg. The figure was a reversal of the 0.3 percent increase in April, and it was the first monthly decline after 10 consecutive gains.

While the decline was not as steep as expected, economists cited areas of concern.

“With higher gas prices eating into the income available for discretionary spending, the consumer faces stiff headwinds,” said Joshua Shapiro, the chief United States economist for MFR.

The Producer Price Index, which reflects commodity prices for manufacturers, rose 0.2 percent in May, according to seasonally adjusted figures provided Tuesday by the Bureau of Labor Statistics. The increase was slightly higher than the 0.1 percent analysts had forecast, and it was below the 0.8 percent rise in April.

The increase in May in the index was attributed mostly to prices for energy goods — including gasoline and electricity — which rose 1.5 percent, the eighth consecutive monthly advance. The food component of the index declined 1.4 percent.

Analysts suggested that the markets were helped after data from China pointed to an increase in industrial output as well as a rise in consumer prices that was in line with forecasts. That helped markets in Asia move higher, and the momentum continued in trading in Europe and the United States.

“It is a pretty powerful relief rally,” said Keith B. Hembre, the chief economist and chief investment strategist at First American Funds.

The Dow Jones industrial average closed up 123.14 points, or 1.03 percent, to 12,076.11. The Standard Poor’s 500-stock index rose 16.04 points, or 1.26 percent, to 1,287.87. The Nasdaq composite index average climbed 39.03 points, or 1.48 percent, to 2,678.72.

The stock market had been in a six-week slump, partly fueled by concerns over the pace of the global and domestic economic recovery, and concerns over sovereign debt problems in the euro zone.

Protracted political wrangling over the national debt ceiling in the United States also has been a factor. Moody’s Investors Service said early this month that it might downgrade the United States credit rating if lawmakers did not raise the ceiling “in coming weeks.”

On Tuesday, the chairman of the Federal Reserve, Ben S. Bernanke, warned about the consequences of continued delay, saying even a short suspension of payments on principal or interest on the Treasury’s debt obligations could severely disrupt financial markets.

He also said that interest rates soared as investors lost confidence, as seen in a number of countries recently.

“Although historical experience and economic theory do not show the exact threshold at which the perceived risks associated with the U. S. public debt would increase markedly, we can be sure that, without corrective action, our fiscal trajectory is moving us ever closer to that point,” he said.

On Tuesday, the yield on the Treasury’s 10-year note, which is linked to interest rates on mortgages and other borrowing, rose to 3.10 percent, from 2.98 percent late Monday. Its price fell 1 point, to 101 7/32.

Stocks, however, kept their momentum throughout the day.

J. C. Penney rose nearly 17.5 percent to $35.37, after the retailer announced that the head of Apple’s retail stores would lead its company.

The Apple executive, Ron Johnson, will replace Myron E. Ullman III as Penney’s chief executive on Nov. 1, the retailer said.

“The markets have been in a corrective stage, and I think we have reached levels now that perhaps we can see some renewed interest in terms of valuations,” said Peter Cardillo, the chief market economist for Avalon Partners.

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Filed Under: Economy News Tagged With: bureau of labor statistics, commodity prices, krein

Bucks: College Students Don’t See Debt as Burden

June 16, 2011 by NewsMaker Leave a Comment

Fred R. Conrad/The New York Times

Debt has become a way of life for American college students. The average student loan debt among graduating college seniors was more than $23,000 in 2008, according to FinAid.org. In addition, the student lender Sallie Mae says the average graduating senior with at least one credit card had $4,138 in debt on the card.

Yet, instead of feeling stressed about owing all that money, many students actually feel “empowered,” says a new study from Ohio State University, based on an data collected for the federal Bureau of Labor Statistics. The study, published in the journal Social Science Research, surveyed 3,079 students, the majority of whom were in their early- to mid-20s.

That’s right. The more college loans and credit card debt that young adults age 18 to 27 have, the higher their self esteem — and the more control they feel they have over their lives. They tend to view debt positively, rather than as a burden.

Come again?

Rachel Dwyer, an assistant professor of sociology at Ohio State and the study’s lead author, says it’s not entirely clear why debt seems to have that effect. But the finding is consistent with earlier research suggesting that student loans, in particular, represent the cost of opportunity for some students, and so can be seen in a positive light. “Educational debt can represent an investment in the future,” she said.

That seems to hold true for credit card debt, too. It may be because students use credit cards for educational purposes, she said. Some students, for instance, may use cards to buy books or even “that nice interview suit.”

“In spite of many cautionary signposts,” the study concluded, “young people appear to be more likely to see debt as an investment rather than a burden as they begin their transition to adulthood.”

There are signs, though, that the glow wears off as the students put more distance between themselves and their college days — perhaps because they are starting to make payments on the loans and may be beginning to realize that their salary doesn’t go as far as they may have thought. The oldest of those studied — ages 28 to 34 — began showing signs of stress about the money they owed.

“They’re experiencing the burden of repayment,” Professor Dwyer said, “versus the pleasure of going to college.”

Even if students are optimistic about their debt, there’s reason for caution, the authors said. Students may consider the easy availability of debt as a positive signal about their potential future earnings, “leading to circular reasoning in which the only guaranteed winner is the lender,” the authors said.

What do you think? Has the culture of student debt gone too far?

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Filed Under: Your Money Tagged With: bureau of labor statistics, earlier research, mid 20s

Off the Charts: A Revival In Manufacturing Seems to Be Fading

June 4, 2011 by NewsMaker Leave a Comment

Surveys of manufacturing companies around the world indicate that business is still improving for many of them, but that the pace of growth has slowed.

In the United States, the Institute for Supply Management reported that the overall reading for its survey in May fell to 53.5 from 60.4. Figures above 50 indicate that more companies say business is improving than say it is getting worse, so that is hardly a sign of a new recession.

Still, it played into a rising fear that the recovery is slowing again at a time when unemployment remains high.

On Friday, the Bureau of Labor Statistics reported that the rate rose to 9.1 percent in May, up a tenth of a percentage point.

The drop of 6.9 points was the largest one-month decline since January 1984, a fact that received considerable attention. Less noted was the fact that the earlier decline came off even higher figures and did not presage a return to the recession that ended in late 1982.

The figures show the direction of change, not the magnitude or the existing level. Extremely strong numbers can persist for long periods only if conditions are continually improving.

The accompanying charts show three components of the survey, which is conducted in many countries around the world, and indicate that the slowing of growth is a more general phenomenon. For ease of understanding, the figures are converted to place a 50 reading — one that indicates an equal number of positive and negative responses — at zero.

The slide appears to be worse in Britain, where a strong revival late last year and early this year seems to have vanished. There, readings came in at negative levels for both output and new orders, the first time that had happened since May 2009, when the credit crisis was only beginning to ease. But more companies there continue to say they are hiring rather than reducing payrolls.

In the United States, the figure for new orders remains barely positive, and the output figure also declined, although it remains positive. The figure for employment also fell, but it remained at a level that historically has accompanied good jobs figures. The employment index has been over 55, or 5 in the chart, for 16 consecutive months, the longest such stretch since 1965.

Labor Department figures indicate that the number of manufacturing jobs hit bottom in December 2009 and that employment has been rising more rapidly in that sector than in the economy as a whole, although it fell by 5,000 jobs in May.

On average, the euro zone appears to be stronger than any of the other countries shown, but this is a case where averages can be misleading. The German boom cooled only a little, and France remains strong. But already weak figures in Greece are getting worse, and Spanish manufacturers see some deterioration.

In Japan, the figures show some revival from the blow caused by the earthquake and tsunami in March. The output index went above break-even levels after falling sharply, but as a group, Japanese manufacturers still say they are reducing employment.

Floyd Norris comments on finance and the economy on his blog at nytimes.com/norris.

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Filed Under: Business News Tagged With: bureau of labor statistics, fear, united states