Private employers hired more workers over the past three month than first thought, lifting hopes for the weak economy. But the unemployment rate rose in August for the first time in four months as more people entered the market looking for work.
As headlines attempt to shape perceptions and expectations, a quick review of the data reveals that little has changed in the labor market.
The recovery, in comparison to 2004 of the 2003 to 2008 liquidity injection, remains weak. Birth/death creation as a percentage of total jobs creation remains roughly the same percentage as 2004. Total jobs created, however, are down significantly.
Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost):
In the battle to alter expectations, the jobs report is being spun as not as bad as expected. As a counter balance to this view, I submit that the weak trend in trucking and transportation, a measure of domestic and international demand, has been unable to turn positive during the recovery. This is hardly an indication of strength.
Truckers and Warehousing Payroll And YOY Change:
Also, the jobs creation/(destruction) histogram suggests that job creation barely exceeds labor force expansion on an annual basis. After the massive job losses of the past two years, it's going to take a lot more than effectively treading water in the labor market to bring down the 15%+ real unemployment rate.
Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average.
Source: finance.yahoo.com
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