Tuesday, October 22, 2013

Crawl At Sept. Employment Numbers

Each month, we take a layman's run at the Bureau of Labor Statistics monthly economic indicators. The most quoted number in any month's report is the U3 unemployment rate.

This month, the report was late due to the layoff of non-essential bureaucrats that was mislabeled as a "government shutdown". Of the functions that were paused, many were essential while other, non-essential agencies remained open. For example, the National Park Service was approved for more man-hours in order to barricade citizens from national parks and monuments, including illegally evicting people from their homes and businesses.

To rattle the cages of economists, financial analysts, venture capitalists, and business owners (as well as anyone with a 401K retirement account whose nest-egg is tied to the financial markets), Obama ordered the BLS to delay its report, deeming it "non-essential".

The irony is that there are private bean-counting firms who garner access to the same databases that BLS employs. They tend to crunch unemployment, workforce, and projection figures, and tend to do so a little more accurately than the BLS. BLS tends to revise its numbers in later reports. Usually, those numbers are worse than originally reported.

Due to the late report this month, we took a run at extrapolation and prediction. Now that the report has been released, let's take a look.

As predicted, for end of month September numbers, the U3 rate, as calculated by BLS, ticked down a tenth of a percent. We predicted a slight downward tick. It is at a 5-year low of 7.2%. Even after changing the formula in order to make the unemployment figures look less deplorable, the U3 has remained above 7.0% since Obama took office. 5 years puts the last "low" in 2008, near the end of Bush's final year in office.

The Workforce Participation Rate also known as the Labor participation Rate, "remained little changed". The translation is that it dipped lower, but less than a tenth of a percentage point, so they won't report it. We predicted as much.

BLS reports that the U6, which includes those employed part-time for "economic reasons" also "remained relatively unchanged". That is because once a person has left the workforce, then returned but to a part-time job, they are considered a "new hire" and not slotted in the U6 calculation. Due to the work-hours restructuring going on due to Obamacare, there are a few new part-time positions that those who were out of work for over 6 months may be taking. The average workweek is at 33 hours, barely over the 30 hour line Obamacare delineates between full and part-time.

The November 8th report will contain the impacts of the so-called "shutdown". In addition, temporary holiday hires in retain and wholesale may tick up in late October as businesses prepare for the heightened shopping season from mid-November through Mid-January. A current seasonal upward tick in the manufacturing sector indicates the trend.

However, polls and other indicators suggest that traditional store-front shopping may not be as optimistic this season as many shoppers suggest they will make more holiday purchases online this year than in previous years. This may impact those seasonal job numbers.