Economics & Research Blog
Employment Improves... Or Does It?
The Bureau of Labor Statistics issued its September employment report on Tuesday,
By Dr. Joe Webb
Published: October 22, 2013
The Bureau of Labor Statistics issued its September employment report on Tuesday, October 22; it was delayed because of the shutdown. The unemployment rate fell from 7.3% to 7.2%. The BLS advised that the change was minor due to rounding, using the phrase "little changed."
According to the household survey, employment increased by +133,000 while -136,000 left the workforce. The much-reported levels of part-time workers actually remains within historical levels, and is less of a big deal than is made of it.
Businesses have been planning for the Affordable Care Act since its passage and have made operational investments for its implementation. The sluggish job market is the true effect of the adjustments, and whining about part-time employment is the "shiny object" that diverts attention from other economic factors.
The lack of forward-focused expansionary business investment has been a serious problem in the economy for many years. Businesses are generally focusing on near-term efficiency improvements. They are predictable, measurable, have quicker payback, and more certainty of return than long-term expansionary investments. The latter usually have negative cash flows in early years and greater financial risk. Those future cash flows are also discounted by expected inflation rates and the likelihood of higher future tax rates (of all types) and/or regulatory costs.
It is also likely that current part-time workers will have some hours cut, but much of that will be masked by the usual post-holiday adjustments to retail workers schedules. Currently, worker hours have been flat for the last year.
As far as new hiring goes, there should be no surprise that a portion of new hires will be within the guidelines of the ACA limitations on hours worked. We should be more surprised that people are surprised.
Printing industry employment fell by 2,100 from August, and is down -14,700 since September 2012 (-3.2%). The evidence of printing industry consolidation may be seen in the decline of "non-production" workers. That class of worker has declined by -7,800 (-5.3%) since September 2012. (click chart to enlarge)
August public relations employment continues to show the shift in media allocation. Compared to 2012, employment is up +7.6% while overall agency employment is flat. Graphic design employment is up +2.5% compared to last year. The October report to be issued on November 8. It is likely that the October unemployment rate may spike higher because of the brief shutdown. The BLS will advise of the net effects of the shutdown on employment data at that time.
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