May 24, 2017

U.S. Adds 162,000 Jobs as Growth Remains Sluggish

The unemployment rate, which comes from a different survey, ticked down to 7.4 percent as people got jobs or dropped out of the labor force.

The job gains reported by the Labor Department on Friday were concentrated in retail, food services, financial activities and wholesale trade. The manufacturing sector gained 6,000 jobs; government employment stayed basically flat.

July represented the 34th-straight month of job creation, but the latest pace of employment gains is still not on track to absorb the backlog of unemployed workers anytime soon. At the average rate of job growth seen so far this year, it would take more than seven years to close the so-called jobs gap left by the recession, according to the Hamilton Project at the Brookings Institution.

Other indicators disappointed, too, with both average hourly wages and the length of the private-sector workweek shrinking modestly in July.

“I honestly didn’t think it would be this hard,” said Keith Aiken, 38, who moved into a homeless shelter in Greensboro, N.C., about a month ago. His employer of more than a decade, a group home for people with disabilities, shut down last August, and he has been looking for work ever since.

After state officials ended North Carolina’s eligibility for federal unemployment benefits last month, Mr. Aiken’s benefits stopped and he was no longer able to pay his rent.

“Hopefully something will come open pretty soon,” he said, noting that he is looking into contract labor in Iraq or Afghanistan. “I like to think I’m down but not quite out yet.”

The outlook for workers like Mr. Aiken is unclear.

Some economists are hopeful that the pace of hiring will pick up once Congress’s latest across-the-board budget cuts have worked their way through the system at the end of the fiscal year on Sept. 30. But battles in Washington over the debt ceiling and further austerity measures mean that the drag from a shrinking government could continue into next year and beyond.

“Whether there’s less fiscal drag, more fiscal drag, or a train wreck, we still really don’t know,” said Joshua Shapiro, chief United States economist at MFR.

Analysts are also questioning the disconnect between job growth and other measures of the country’s economic health. The current rate of job creation would typically coincide with faster-growing economic output.

But the country’s gross domestic product, a broad measure of the production of goods and services, grew at a relatively tepid annual rate of 1.7 percent in the second quarter of this year and 1.1 percent in the first quarter, much less than would be predicted from recent hiring trends.

Trends in output and job growth seem unlikely to stay decoupled for too long, some economists say, in which case output should start to pick up, or job growth should start to slow, or both.

“I think with the economy showing 1 percent growth on average over the last three quarters you’re locked into 150,000 jobs per month for the rest of this year,” said Steven Ricchiuto, chief United States economist at Mizuho Securities.

One other possible explanation for the seemingly incongruous trends in job and output growth has to do with the mix of jobs being created.

“The composition of job growth has not been particularly great,” Mr. Shapiro said. “It’s a lot of temp services, retail, food services, health care. With low-end jobs contributing more than half the growth, the income generated would be not that great, and you wouldn’t be expecting it to drive strong consumer spending.”

Even so, the economy appears to be healing, at least from the perspective of the Federal Reserve.

Given the relatively strong headline numbers for job growth over the last few months, many Wall Street analysts are expecting the central bank to announce that it will start pulling back on its asset purchases in September. A statement the Fed released on Wednesday this week shed little light on the timing for this decision, but Chairman Ben S. Bernanke has said the Fed would most likely begin to taper its asset purchases later this year.

Article source: http://www.nytimes.com/2013/08/03/business/economy/us-adds-162000-jobs-less-than-expected.html?partner=rss&emc=rss

Economix Blog: How One Month’s Jobless Fare a Month Later

Friday’s jobs report was good, but it’s worth remembering that people already unemployed are still having a terrible time finding work. This is particularly evident from the Labor Department’s flows data, which track the labor force status of individuals from one month to the next. Here’s a chart showing the flows for unemployed workers — that is, if a worker was unemployed last month, what is his or her labor status this month?

Source: Bureau of Labor Statistics, via Haver Analytics. The lines show worker flows from unemployment last month into each of the following statuses in the current month: unemployment, not in labor force, employment. Source: Bureau of Labor Statistics, via Haver Analytics. The lines show worker flows from unemployment last month into each of the following statuses in the current month: unemployment, not in labor force, employment.

As you can see, the most likely outcome for someone unemployed in May was to continue being unemployed in June. The second-most-likely outcome was to drop out of the labor force entirely — that is, stop looking for work. (That’s part of the reason that today’s labor force participation rate is so low, although the biggest flow into the “not in labor force” category still comes from people who are leaving jobs rather than giving up a fruitless job hunt.)

Finally, the third-most-likely outcome was to find a job. Over all, fewer than one in five people who were unemployed in May were employed in June.

Unemployed workers have been more likely to flow out of the labor force than into employment for almost the entire period beginning around December 2008 to the present. This was historically not the case; for the nearly 19 years spanning from February 1990 (when the data series began) to the end of 2008, jobless workers were almost always more likely to find a job than to give up or retire. There were only two months when this was not the case (March 2003 and December 2005).

In June, the number of people flowing from unemployment into employment (2,330,000) was almost as high as the the number flowing from unemployment out of the labor force (2,481,000), but not quite. Fingers crossed, maybe next month we’ll finally see those lines cross each other again.

Article source: http://economix.blogs.nytimes.com/2013/07/05/how-one-months-jobless-fare-a-month-later/?partner=rss&emc=rss

Economix Blog: An Odd Shift in an Unemployment Curve

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

In an article on Thursday’s front page, I wrote about how long job vacancies are taking to fill, especially when you consider the abundance of unemployed workers.

Economists have been thinking about this issue for a couple of years now thanks to a shift in what is known as the Beveridge Curve.

Source: Bureau of Labor Statistics.The New York Times Source: Bureau of Labor Statistics.

No, the Beveridge Curve is not about the relationship between Coke and Pepsi. It’s named for the British economist William Henry Beveridge, and it shows the relationship between the unemployment rate and the job vacancy rate.

In an economic expansion, the jobless rate is low and the job vacancy rate is high; a small share of workers are looking for jobs, and so when employers post a vacancy, the opening can be hard to fill. Or you can think about it the other way — if there are a lot of jobs available, then people will not have much trouble finding work, leading to low unemployment.

In a recession, the reverse is true: there is a high unemployment rate and a low vacancy rate. Where you end up on the curve generally depends on where you are in the business cycle, but you will probably be somewhere on or near that line.

Since late 2009, the curve has shifted outward. That means that even if the job market is not exactly booming, there are more vacancies out there than the unemployment rate alone would have predicted a few years ago.

The million-dollar question is: Why?

There are probably a few forces at work.

One is skills mismatch — that is, the workers who are pounding the pavement do not have the skills that employers actually want.

This is probably true for some highly coveted occupations that require specialized skills, like nursing or engineering. After the housing bust and financial crisis, there was a structural decline in industries like construction, and the skills and credentials required for construction work do not directly translate to working in a hospital or at Google.

In addition, there are now a lot of long-term unemployed workers whose skills may have deteriorated. Maybe some are not currently fit for any job, even in the industry or occupation in which they last worked. Or maybe employers just assume this, keeping the long-term unemployed stuck that way no matter what they do.

Still, this can’t be the whole story. If there were a shortage of qualified workers across a lot of industries, you would be seeing employers bid up wages for the few candidates who were desirable. That does not appear to be happening.

Another explanation may have to do with whether all those who are calling themselves unemployed today would have been counted as unemployed in the past. In recent years, jobless-benefit eligibility has been longer than at any previous time in American history, with some workers qualifying for as long as 99 weeks. That longer duration of benefits could be inflating the unemployment rate.

“Some workers, though not the majority, who are unemployed are unemployed in name because they have to go through the motions of going through the job application process in order to remain eligible for unemployment benefits,” said Steven J. Davis, an economist at the Booth School of Business at the University of Chicago who has constructed models for vacancy duration and recruiting intensity. In the past, these people probably would have dropped out of the labor force much earlier, bringing the unemployment rate down.

This should be less true now that the duration of benefits has become shorter and millions of workers have exhausted their weekly checks. There are about 800,000 people who want jobs but have given up looking because they are discouraged, which means they are not officially counted as unemployed. Excluding them makes the official unemployment rate lower than it would otherwise be (although presumably in previous recessions there were also people who gave up looking for work).

Finally, we get to the explanation I focused on in the front-page article: that employers have vacancies but are afraid to fill them because of economic and policy uncertainty.

Maybe sales growth will drop off, they worry. And because of Congressional gridlock, employers are still unsure what is going to happen to government spending and federal tax rates. Many businesses also remain confused about how the Affordable Care Act will affect them.

“They’re taking longer to fill vacancies because they just feel less need to fill jobs now,” Professor Davis said. “They recognize that in a slack labor market there is an abundance of viable candidates. If something happens, and if they need to hire quickly, they know they can do that. That’s harder in a tight labor market.”

As a result, some companies are keeping job postings up for months, if not years, and putting candidates through round after round of interviews without hiring anyone. For some companies, the only candidate who can justify the risky expense of filling a vacant position is a candidate who is unimaginably overqualified.

“I saw a posting for a job recently vacated by someone I knew,” one unemployed reader, who did not want his name revealed, wrote me in response to the article. “I’d worked closely with this person and she had done an excellent job. She was missing about half the things they were now looking for.”

Article source: http://economix.blogs.nytimes.com/2013/03/07/an-odd-shift-in-an-unemployment-curve/?partner=rss&emc=rss

Jobless Rate Dips to Lowest Level in More Than 2 Years

In the midst of the European debt crisis, lingering instability in the oil-rich Middle East and concerns about a Chinese economic slowdown, the American unemployment rate unexpectedly dropped last month to 8.6 percent, its lowest level in two and a half years. The Labor Department also said that the nation’s employers added 120,000 jobs in November and that job growth for the previous two months was better than initially reported. That looks like good news for President Obama as he heads into the 2012 presidential election — especially since just a few months ago the picture looked bleak.

“If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior United States economist at Capital Economics. “Since that point, we’ve become more and more worried about the euro zone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off.”

Even so, part of the reason the jobless rate fell so low was that 315,000 unemployed workers simply stopped applying for jobs. And resilient as the economy seems to have been since this summer, the fate of the fragile recovery is still tied to external — and especially European — events.

So far Europe’s problems have been relatively contained to the Continent. Many economists worry that a disorderly default of Greece or Italy, which still looks alarmingly possible, could plunge Europe into a depression.

If recent history is any guide, even a modest shock wave from across the ocean could throw the American economy off course; earlier this year, a series of shocks from higher oil prices, the Japanese earthquake and the stalemate over the United States debt ceiling managed to drain the energy from the recovery.

November’s drop in unemployment was a welcome relief, given that the jobless rate had been stuck at 9 percent for most of 2011. It is at the lowest level since March 2009; the rate has been above 8 percent for 33 months.

The share of workers who were unemployed fell in November partly because some people found jobs and partly because some discouraged workers dropped out of the labor force altogether. That left the share of Americans participating in the work force at a historically depressed 64 percent, down from 64.2 percent in October.

A separate survey of employers, which economists pay more attention to than the unemployment rate, found that companies added 120,000 jobs last month after adding 100,000 in October.

These numbers were not particularly impressive by historical standards — payroll growth was just about enough to keep up with population growth — but there were other signs of resilience.

Companies have been taking on more and more temporary workers, suggesting that more permanent hiring may be in the cards. What is more, help-wanted advertising, retail sales and auto sales have risen; jobless claims have fallen; and businesses seem to be getting loans more easily. Perhaps most encouraging was a recent survey of small businesses that found hiring intentions to be at their highest level since September 2008, when Lehman Brothers collapsed.

“Small businesses were cheering up at the end of last year but then got clobbered by the jump in oil prices, the Japanese earthquake and then the debt ceiling fiasco,” said Ian Shepherdson, chief United States economist at High Frequency Economics. “Small businesses employ half the work force, and we need them on board.”

Still, serious concerns remain about the economy’s ability to weather the financial and economic turmoil from abroad. The public sector continues to lay off workers at the federal, state and local level. And excluding the hundreds of thousands who have left the labor force, the country still has a backlog of more than 13 million unemployed workers, whose average period of unemployment is at a record high of 40.9 weeks. The median period, the point between the top and bottom halves, is 21.6 weeks.

“They say businesses are refusing to look at résumés from the unemployed,” said Esther Perry, 59, of Bedford, Mass., who participated in a recent report on unemployed workers put together by USAction, a liberal coalition. “What do you think my chances are? Once unemployment runs out, I don’t know what I will do.”

Even those with jobs are in weak positions. Average hourly earnings fell 0.1 percent in November, and a Labor Department report released Wednesday found that the share of national income going to labor was at a record low last quarter.

These softer spots in Friday’s numbers underscored just how much President Obama could use additional stimulus, a tidy and fast resolution to the European debt crisis or some other economic breakthrough to reinvigorate the job market before the 2012 presidential election.

“As president, my most pressing challenge is doing everything I can every single day to get this economy growing faster and create more jobs,” President Obama said Friday in Washington.

On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which is scheduled to expire at the end of this month. Economists have said that allowing the tax cut — which lets more than 160 million mostly middle-class Americans keep two percentage points more of their paychecks — to expire could be a severe drag on both job creation and output growth.

“If it isn’t extended, it will have an impact on consumer spending in the first half of next year because it’ll put a big dent in consumer income,” said Conrad DeQuadros, senior economist at RDQ Economics. “To the extent that reduces spending, there will be second-round effects on hiring.”

According to some estimates, an extension would probably lead to 600,000 to one million more jobs. The other major stimulus program scheduled to expire by 2012 is the extension of unemployment insurance benefits, allowing some jobless workers to continue collecting for as long as 99 weeks. Already, millions of people have exhausted their benefits. Failing to renew the federal benefit extensions will cause five million additional people to lose benefits next year, Labor Secretary Hilda Solis said in an interview.

Unemployment benefits are believed to have one of the most stimulative effects on the economy, because recipients are likely to spend all of the money they receive quickly and pump more spending through the economy.

Article source: http://feeds.nytimes.com/click.phdo?i=cc9db1f61f6cf275ba25161498431303

Economix Blog: What to Look For in Friday’s Jobs Report

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

The Labor Department will release its monthly jobs report on Friday morning, and economists are expecting that once again the news will be mediocre.

American companies probably added a net total of about 90,000 jobs in October, after a gain of 103,000 in September, forecasters say. (Remember, though, that the September numbers were helped by the rehiring of Verizon workers who were on strike during August.)

While job growth is, of course, better than job losses, a gain in the neighborhood of 100,000 is nothing worth celebrating. That would be just about enough to keep up with population growth, so it would not actually reduce the backlog of unemployed workers.

As a result, economists expect the unemployment rate to stay flat at 9.1 percent. If they’re right, that would mean that the unemployment rate has not fallen below 9 percent in seven months.

The outlook for the coming year is not much better: On Wednesday, the Federal Reserve’s forecast for economic growth next year was revised downward. Fed officials expect an average unemployment rate of 8.5 to 8.7 percent in 2012.

Those figures also do not seem to have factored in whatever mayhem could result from the European debt crisis.

The fate of Greece has been up in the air for about a year and a half now, and this week talks over the conditions of a deal to ease the Greek debt burden have been particularly contentious. Economists worry that a possible Greek default could set off a domino effect that takes down Italy and other indebted countries, potentially causing another global financial crisis. And as you may recall, earlier upheaval — the tsunami in Japan, the Arab Spring, severe winter storms, the debt ceiling debacle in Washington — caused previous economic forecasts to look far too optimistic.

Besides the headline numbers in Friday’s report,  pay attention to:

  • The share of working-age people who are actively participating in the labor force, either by working or looking for work. This share has been alarmingly low in recent months, indicating that many workers are sitting on the sidelines because they find the job market so discouraging.
  • The average duration of unemployment. The average length of time workers have spent fruitlessly looking for work has reached record high after record high, climbing to 40.5 weeks in September. And that number would not even include people who have been out of work for longer but gave up their job search.
  • The length of the work week. Before employers take the plunge and hire more workers, they often work their existing employees longer. But average weekly hours for private employees have been mostly flat at about 34.3 so far this year. We’ll see if hours picked up in October.

Article source: http://feeds.nytimes.com/click.phdo?i=8d07d461617a54283cc0c9d10c55ac16

Economix Blog: For Each U.S. Job Opening, 4.6 Unemployed

There were 4.6 unemployed workers for every job opening in the United States in August, according to new data from the Labor Department.

Bureau of Labor Statistics, via Haver Analytics

That’s a slight tick up from July, because the number of unemployed rose slightly and the number of job openings fell.

The bottom line is, even if all job openings were filled overnight, there would still be about 11 million people who were still out of work.

Total separations from jobs rose a bit, but primarily because people left their jobs voluntarily (as opposed to being laid off or fired). That could be a good sign for the economy, in that it means workers see opportunities to find other jobs they like better and are opening up more positions in the process. Part of the reason employers have been reluctant to hire is that so few people have been leaving their jobs.

DESCRIPTIONSource: Bureau of Labor Statistics, via Haver Analytics

Article source: http://feeds.nytimes.com/click.phdo?i=97160619a89114d3881d95e3e483879e

The Help-Wanted Sign Comes With a Frustrating Asterisk

That is the message being broadcast by many of the nation’s employers, making it even more difficult for 14 million jobless Americans to get back to work.

A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.

Unemployed workers have long suspected that the gaping holes on their résumés left them less attractive to employers. But with the country in the worst jobs crisis since the Great Depression, many had hoped employers would be more forgiving.

“I feel like I am being shunned by our entire society,” said Kelly Wiedemer, 45, an information technology operations analyst who said a recruiter had told her that despite her skill set she would be a “hard sell” because she had been out of work for more than six months.

Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.

The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.

Given that the average duration of unemployment today is nine months — a record high — limiting a search to the “recently employed,” much less the currently employed, disqualifies millions.

The positions advertised with preferences for the already-employed run the gamut. Some are for small businesses, and others for giants, including the commercial University of Phoenix (which, like some other companies, removed the ads after an inquiry by The New York Times) or the fast-food chain Pollo Tropical. They cover jobs at all skill levels, including hotel concierges, restaurant managers, teachers, I.T. specialists, business analysts, sales directors, account executives, orthopedics device salesmen, auditors and air-conditioning technicians.

“It is really a buyer’s market for employers right now,” said Harry J. Holzer, an economist at Georgetown University and the Urban Institute. One consequence is that the long-term unemployed will rack up even more weeks of unemployment, Mr. Holzer said, and will find it harder to make the transition back to work.

Even if Congress passed a measure forbidding companies from making current employment a requirement for job applicants, companies could still simply decide not to hire people who are out of work. Discrimination would be difficult to prove.

After all, there are legitimate reasons that many long-term unemployed workers may not be desirable job candidates. In some cases they may have been let go early in the recession, not just because business had slowed, but because they were incompetent.

Idle workers’ skills may atrophy, particularly in dynamic industries like technology. They may lose touch with their network of contacts, which is important for people in sales. Beaten down by months of rejection and idleness, they may not interview well or easily return to a 9-to-5 schedule.

“We may be seeing what’s called statistical discrimination,” said Robert Shimer, a labor economist at the University of Chicago. “On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out the good ones.”

Employers receive so many applications for each opening that some may use current employment status as an easy filter. In some cases — as with Ms. Wiedemer, of Westminster, Colo. — recruiters merely assume employers do not want jobless workers.

“Clients don’t always tell us ‘we don’t want to see résumés from unemployed workers,’ but we can sense from what people have interested them in the past that they’re probably looking for somebody who’s gainfully employed, who’s closer to the action,” said Dennis Pradarelli, a talent acquisition manager for Marbl, a recruiting firm in Brookfield, Wis. Many of the job ads posted by his firm seek workers who are “currently employed or only recently unemployed.”

Many firms that are not intentionally screening out the unemployed may still disqualify such applicants for having bad credit histories after having fallen behind on the bills — which they of course need a job to pay.

It’s not clear what can be done to pull workers out of this unemployment trap.

Government incentives for companies to hire unemployed workers have met with limited success. One such tax incentive from last year was poorly publicized, so most employers did not know about it. Better publicity may not suffice, either. An experiment from the 1980s found that telling companies that the unemployed were eligible for generous wage subsidies actually made employers less likely to hire such workers.

Job counselors often encourage the long-term unemployed to go back to school or volunteer to demonstrate that they are still productive, engaged members of society. But absent the actual acquisition of marketable skills — which many retraining programs do not provide — it’s not clear such efforts improve the chances of being hired.

“Mentally, it may be good for the candidate, but I think companies are still in a position to say ‘O.K., we’re looking for a candidate with the most up-to-date skills,’ ” Mr. Pradarelli said. “If you’ve been out of pocket for two years, going back to school sounds nice, but it doesn’t make or break the situation.”

The best solution, economists say, would be to encourage job growth more broadly, which may initially involve poaching people from other companies but could eventually draw even the least desirable workers back into jobs. During the boom years of the late ’90s, the labor market was so tight that ex-convicts had relatively little trouble finding work.

In the meantime, people like Ms. Wiedemer — who has been out of work for three years — are exhausting their benefits and piecing together what support they can from food stamps and family members. And they are stuck hoping that economic growth manages to outpace their own descent into permanent economic exile.

“I worry that unemployment may eventually come down, not because older workers who have been unemployed for a year or two find jobs,” Professor Shimer said, “but because older workers finally give up and drop out of the labor force.”

Article source: http://feeds.nytimes.com/click.phdo?i=d4d7d4293173a5ba8d5cfa58c3324f9e