I have to be at work at 10 this morning, so can only give some cursory thoughts on December's Employment Situation report released this morning.
Good news? The unemployment rate dropped to 5.7%
The bad news? Just about everything else in the report, at least from what I can see in my [very] brief once-over.
New jobs created: 1,000. Market expected 148K.
Job losses in manufacturing (26,000), retail (38,000), and finance (not specified). There were gains in professional services, two thirds of which were temporary workers, and in construction.
Hundreds of thousands (309K) of workers left the civilian labor force, and the total number of individuals not in the labor force increased by over a half a million, meaning even some new graduates and immigrants aren't actively looking for work. According to the BLS, there were "433,000 discouraged workers in December, also about the same as in December 2002." Well, actually, there were 398,000, an increase of 35,000, or 8.8%. But whose counting (unless you're one of the discouraged workers.) The number of people "marginally" attached to the labor force is now 1.5 million, which the BLS also claims is that same as the 1.4 million last year. Picky, picky, I know. A hundred thousand here, a hundred thousand there.
Hourly earnings are still relatively stagnant, only increasing $.03 over the month. Since July, worker bee hourly wages are up only seven cents, well below the annual increases seen in the 1990s of 40-50 cents. And as I mentioned the other day, food and fuel prices are well outpacing worker salary increases. In addition, worker hours decreased, pulling down weekly earnings, another hit to the average Joe and Jane's wallet.
I'm sure there's more here, but I need to jump in the shower, in order to keep my own underpaying worker bee job, at least for a few more weeks.
Posted by MB Williams at January 9, 2004 09:19 AM | TrackBackAm I correct in thinking that a large proportion of those people "leaving the job market" were the ones whose unemployment compensation got cut off when Congress refused to pass an extension just before they adjourned?
That's an efficient way of decreasing the official unemployment rate.
Posted by: N in Seattle at January 9, 2004 10:42 AMThe drop in the unemployment rate is mainly attributed to the lower labour force participation rate. As such, I don't think you can call the drop in the unemployment rate good news.
Posted by: Manish at January 12, 2004 12:20 AM