RSS Feed for This PostCurrent Article

Unemployment Report: September 4, 2009

By Larry Doyle on September 4, 2009 at 1:01 PM in Economy, Employment, Sense on Cents (Larry Doyle blog), Unemployment, Unemployment/Jobs

The widely anticipated September Unemployment Report covering the month of August was just released. Let’s dive right in and take a look at the numbers . . .

Unemployment Rate
June: 9.4%
July: 9.5%
August: 9.4%
September: 9.7%!!

>>LD’s comments: higher than the expectation of 9.5%. Recall that the rate moved down last month from 9.5% to 9.4% as the labor pool shrunk. This move higher puts the rate back on the track it previously held and would project to a likely double digit unemployment rate in the 4th quarter.

Where’s the stimulus? Where are the jobs? Bulls would say the employment situation is stabilizing. Pragmatists look at the numbers and see an economy settling in to a likely low growth path at best. The unemployment rate of 9.7% is the highest since 1983. The underemployment rate of 16.8% is very sobering!!

Non-Farm Payroll (click here for definition of this term)
June: loss of 322k
July: loss of 467k initially revised to a loss of 443k and now revised to a loss of 463k
August: loss of 247k revised to a loss of 276k
September: loss of 216k

>>LD’s comments: Close to consensus, but the prior two months had revisions showing further declines of 49k. (The prior month was revised from a loss of 247k jobs to 276k. July was revised from a loss of 443k jobs to 463k jobs). Manufacturing lost 63k jobs, government showed a loss of 18k jobs with more of these at the state level.I repeat my comments from above. We are not witnessing any inclination by private companies to start the rehiring process. As such, the likelihood of long term structural unemployment is growing. This fact will serve as a real drag on consumers in general and the economy as a whole.

Average Hourly Earnings
June: +.1%
July: 0.0%
August: +.2% revised to +.3
September: came in at .3 with the prior month revised to .3 as well.

>>LD’s comments: Largely due to the increase in the minimum wage. Do not look at this increase as an indication of potential growth in retail sales.

Average Hourly Workweek
June: 33.1 hours
July: 33.0 hours
August: 33.1 hours
September: 33.1 hours

>>LD’s comments: as expected the average hourly workweek remained unchanged. This number, which remains mired at a level last seen in 1964, is an indication that an expected rebuild in inventories is not on the near term horizon.

Further Color: the economy remains significantly challenged. Despite all of the government stimulus and government programs, in my opinion the economy is very vulnerable. Behind these numbers, the consumer is seeing few signs of improvement in the jobs space. That reality is impacting the sluggish retail sales along with the continued increase in delinquencies and defaults on the credit front.

Market Reaction: futures have been bouncing up and down post-report. Prior to the report, equity futures indicated a slightly positive opening to the equity market. Now the futures are closer to unchanged.

Interest rates have also bounced around, but the front end of the yield curve seems better bid as the unsettledness behind these numbers makes investors nervous.

The dollar index is somewhat improved but not in a meaningful fashion.

Add it all up and I see the following:

>> the cheerleaders can put away the pom-poms

>> the pure doom and gloom guys who have been short forever remain frustrated

>> the economy remains challenged and will bump along the bottom. No “V” recovery, but more like the “caterpillar” designation assigned by our Sense on Cents Economic All-Star Bob Rodriguez.

Get used to it because it is not going to change appreciably anytime soon.

I repeat my market call from the other day in which I believe equities will retreat from current levels.

LD

  • oowawa

    Oh, but the pom-pom wavers keep chanting that unemployment is a “lagging indicator.” All of these green shoots that are sprouting everywhere you look are sure signs of a “jobless recovery.” Lately, I’ve been feeling kind of like a lagging indicator myself. The more I get bogged down in hopeless debt, the more I lag. But I guess the high-frequency super computers humming away at Goldman Sachs really don’t need my input to churn out the mega-bucks. Green Shoots! Green Shoots! Rah Rah Rah!

  • bayareavoter

    I can tell you anecdotally, as an on-line seller of craft supplies, that my client-base is worried.

    They buy less, they take longer to pay and sales are a fraction of what they were 2 yrs ago and compared to last year.

    I don’t buy anything I don’t need and although we still go out dinner, we go out less often. My husband works full-time but in this economy we worry about him losing his job. I know about a dozen people who have lost jobs, have never been unemployed before for more than a month, who cannot find work.

    Houses here in Marin county, that always sold quickly (our previous house in Sausalito sold 10 yrs ago for full price at the broker’s open before the official open house the following weekend) now sit for months unsold.

    Meanwhile California’s economy is a disaster. The university and state college systems are restricting admissions for the first time ever and have raised tuitions significantly while giving professors pay cuts.

    And what about our savings and investments that evaporated last year?

    I just don’t see how this is going to turn around even though Joe Biden thinks his happy talk will do the job.

  • Margaret

    If we all bow down before Chairman Obama (as Michael Savage has dubbed him) and chant “hope” and “change” the economy will suddenly appear entirely recovered. We just haven’t had enough kool-aid

  • Peggy Sue

    One of the things I’ve noticed is the new popularity of “Lay-Away.” People have either shunned credit cards or have little money left to buy things outright. But lay-away was a regular feature when I was a kid.

    We’re sliding backwards while the cheerleaders continue to strut their stuff.

    And that underemployment figure, Larry, makes me want to rush to the cupboard for a glass of wine. And it’s not even 2 pm here!

    So now we have a caterpillar recovery underway? The names continue to be creative, all equaling: huge, disturbing mess :0).

    Thanks for the update!

    • oowawa

      the new popularity of “Lay-Away”

      Yes Peggy Sue, I too remember the idea of “lay-away” from the olden days: you had the store put something aside while you made payments on it bit by bit. You didn’t get to take the item home until it was paid for. That notion was replaced by credit cards, and now as people lose their credit and turn away from the predatory credit card lenders, lay-away comes back into style.

      I like the idea of laying myself away over the winter–kind of like hibernation. Only problem is, I’m afraid that when I wake up in the spring, I’ll find that I’ve been evicted from my foreclosed cave.

      • Senneth

        Oowawa, you are always a breath of fresh air, one who is highly amusing. Thank you for your special perspective.

        • Senneth

          Larry,
          Thank you for this article. I am battening down the hatches preparing for a very long squall.

        • oowawa

          Thanks very much for the kind words, Senneth.

      • Peggy Sue

        It’s not that I don’t like the idea, oowawa. In fact, it makes sense. You pay a little each week or month or whatever the arrangement is with your retailer. But it startled me when I saw a couple of local ads advertising the programs. A true blast from the past! This is how I bought things as a kid with limited funds. The store would give you a little account book, and it was a thrill to see those numbers reduced until . . . Bingo! The long desired item was yours, paid in full.

        And this really made me laugh:

        “I like the idea of laying myself away over the winter–kind of like hibernation. Only problem is, I’m afraid that when I wake up in the spring, I’ll find that I’ve been evicted from my foreclosed cave.”

        I think many of us share this fear, but it’s a very good thing when you can give it a light-hearted but pointed spin.

        Lay-away. Everything old is new again.

        • oowawa

          Lay-away. Everything old is new again.

          You know, there was a nice attitude that went along with “layaway.” It was the underlying feeling that if something was worth buying, it was worth working for, and you didn’t deserve to possess the item until you paid for it. A big purchase (and back then lots of things were “big” that would be considered “little” nowadays) was a big decision, and it took follow-through to make it happen. It made it special. Yep, I’m old. Wish I was new again.

  • Diana L. C.

    Well, as a retired person who is pretty frugal and who has been all my life, I haven’t experienced much of a difference in my spending habits–except in regard to one thing.

    I took a full-time job after retiring so I would have extra money to help my kids. It was great those two years to be able to do so much to help them get better established in life. The situation in the job, however, was so abusive to me mentally and emotionally that I finally just quit. I figure that someone who is younger and needs a job will have to take the emotional and psychological hits but at least be employed while others aren’t.

    You mention the underemployment rates. To me it is sad that people now have to submit themselves to employment that drains them of their energy and joy. That is what makes me the most frightened for my kids. It appears that they will face years and years of financial worry because they are still young and not set with savings or security.

    • Tricia Spiegel

      I am with you regarding the kids, Diana LC. We are OK because we have saved, our home is almost paid off, and we don’t need any new stuff (collected too much already). But our young adult children are very vulnerable. We also live in the Bay Area of California and the kids bought homes when they were very expensive (small homes in excess of a million). If they get laid off, our savings would deplete quickly from just helping to pay mortages.

    • NoBamaNoWay

      i hear you; with good jobs being so much harder to find, employers are demanding more of employees, co-workers are getting competitive and critical of each other, and the workplace is becoming a lot less pleasant and secure than it used to be. it is definitely not good for a person’s state of mind.

  • HARP

    Considering the way the polls and town halls are going, I don`t hear the trolls making fun of PUMAS anymore.

    • NoBamaNoWay

      you must not have checked Democratic Underground lately. they’re STILL blaming all of their messiah’s failures on the Clintons and PUMAs.

  • http://noquarter foxyladi14

    well at least he keeps his trolls working.

    • Arabella Trefoil

      But their work weeks are shorter.

  • http://shhhithitsthefan.wordpress.com/ ithitsthefan

    But Joe Biden said the Stimulus worked beyond their wildest dreams. Doesn’t that make it all better?

    Snark out!

  • SiliconDoc

    We need an ObamaCare giant Federal Government program to employ the (real) 15%-20% out of work.
    That will do it, and ObamaCare sayeth Obama won’t cost us a dime.
    This is great, another 10% of Americans employed by Obama and it’s all free !
    What we waiting for ?

  • NoBamaNoWay

    there will be no significant improvement in america’s employment situation until the idea of “Free trade” is dead and buried. all of america’s good jobs are GONE, and it will take years to get them back, and that’s assuming our government works with us and not against us.

  • Helen

    What’s really sad about this is that women are continuing to bring more babies into this mess. Either they are not aware of the future for their children, or are being irresponsible.

  • bobo

    The billions Obama wasted on Wall Street criminals could’ve been used to provide additional training and scholarships for the unemployed to return to school. Those dollars could’ve been used to create new jobs. Instead they went to billionaires who gave themselves million dollar bonuses during the biggest economic crisis in over two decades. This is reason enough for everyone to cast a vote against Obama in 2012.

  • Pingback: Weekend Wrap Up, It Sucks to be Obama : NO QUARTER

  • Katmoon

    If there are desperate unemployed people won’t that make it much easier for them to be scooped up into the Obama corps? Or maybe this is his plan to raise enlistment rates. Which community did this fool organize, Zardoz?

  • avwrobel

    Yup, we’re in for a 1-2 year slow, gradual recovery. Something that is very underreported is the savings rate. Every so often we’ll see some news blurb about how the savings rate is going up a little, to something like 4-5% from a negative rate, as if its a great thing. What isn’t reported though is that what is included in the savings rate is paying off credit (or ‘debt’) cards. In other words, there’s no money actually being saved; just paying off our 15-30% rate credit cards. That’s why the Bank of America, Wells Fargo, et al are looking better now profit wise. but their profits are dragging the recovery down by holding down the middle class.

  • Talk2ThePaw

    One thing no one is mentioning is the big factor that “Cash For Clunkers” had and will have on the unemployment figures. Plants recalled laid off employees to fill the increase in cars needed. That helped the August figures. The increase in buying promoted by CFC will ultimately cause a crash in the employment figures of the auto industry. And not just the production plants, but in the dealerships and other ancillary businesses. Dealers said that they sold more cars during CFC than they usually do in 10 months or a year.

    Again, common sense dictates that the auto industry is due for a bigger decline than they had last year.

  • Pingback: Weekend Wrap Up, It Sucks to be Obama : NO QUARTER – CelebrityTwitterGossip.com

  • Linda C

    The other sugar coating spin is the actual “growth in the labor force” is typically older Americans while “younger ones” are staying in school. It is being spun out as the older Americans want to work as some self fulfilling psycho babble project and the younger one want to stay in school. The reality is that older Americans have to work because their retirement income has either vanished or can’t keep up with just the medical costs. The younger ones are staying in school under a ton of debt which they cannot repay without living in their parent’s basement for the rest of their days.

  • OWG

    Two weeks ago the large headlines on the front page of the Portland Tribune in Oregon read: “The Real Misery Rate: 25% unemployment.” And Oregon was in the tank for Barry Soetoro the usurper. They got what they voted for. NO JOBS…they’ve been lied to..but then they say, “every politician lies”. DOH! How stupid can you be? Barry Soetoro is a Pathological Liar and the best liar ever! Expect everything he says to be downright nonsense.
    Wait until the Commercial Real Estate Market implodes soon. Loss of Farms and less food..losses galore in all types of commercial industry. Tic Toc. Barry the butthead-thanks for nothing hustler.

  • Ted

    Nice economy that Bush left us with. Bush left us with the biggest deficits and the worst economy since the great depression. Nice parting gift from Bush.