Friday, January 08, 2010

Unemployed over 26 Weeks, Diffusion Index, Seasonal Retail Hiring

by Bill McBride on 1/08/2010 10:59:00 AM

The underlying details of the employment report are mostly weak. A couple of exceptions are the manufacturing diffusion index has increased significantly over the last couple of months (see below), and temporary help hiring has been strong (see previous post). Otherwise this report was grim: Average weekly earnings declined. Average weekly hours were flat.

And three more graphs ...

Unemployed over 26 Weeks

Unemployed Over 26 Weeks The blue line is the number of workers unemployed for 27 weeks or more. The red line is the same data as a percent of the civilian workforce.

According to the BLS, there are a record 6.13 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.0% of the civilian workforce. (note: records started in 1948)

Diffusion Index

Employment Diffusion IndexThe second graph shows the BLS diffusion indexes for total private employment and manufacturing employment.

Think of this as a measure of how widespread the job losses are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS.

Both the "all industries" and "manufacturing" employment diffusion indices had been trending up - meaning job losses are becoming less widespread. The manufacturing diffusion index has increased significantly over the last couple months.

Back in March, I pointed out the increase in the diffusion index was "a sliver of good news" in a very grim employment report. The diffusion index in March suggested that the situation was no longer getting worse.

Now the index shows job losses are less widespread. However this still shows a minority of industries are hiring, and the all industries diffusion index will probably be above 50 when the employment recovery begins. (For more on how this is constructed, see the BLS Handbook)

Seasonal Retail Hiring

Here is the final seasonal retail hiring graph for the year ...

Seasonal Retail Hiring Retailers hired significantly more seasonal workers in 2009 than in 2008, although this was still the lowest numbers of seasonal hires (excluding 2008) since 1989.

It is important to note that total retail payroll jobs - even with the increase in seasonal hires - was 426,000 fewer in December 2009 than in December 2008. This means retailers cut back sharply on permanent employees and relied a little more on seasonal employees this year.

Earlier employment posts today:

  • Employment Report: 85K Jobs Lost, 10% Unemployment Rate for graphs of unemployment rate and a comparison to previous recessions.
  • Seasonal Employment-Population Ratio, Part Time Workers, Temporary Workers