Friday, September 03, 2010

Employment Diffusion Indices

by Bill McBride on 9/03/2010 02:03:00 PM

A few more comments:

  • Decennial Census layoffs came in close to my estimate (-114,000 actual vs. estimate of -116,000)
  • The seasonally adjusted (SA) teen participation rate increased from 34.6% to 35.2%. This was because so few teens looked for jobs this summer. This was a factor in pushing up the overall participation rate even with a weak job market.
  • The before rounding participation rate (SA) rose from 64.55% in July to 64.73% in August, and the before rounding unemployment rate rose from 9.51% in July to 9.643% in August. It won't take much to push the headline unemployment rate to 9.7%.

    Employment Diffusion Index Click on graph for larger image.

    The BLS diffusion index for total private employment declined to 53.0 from 56.7 in July. For manufacturing, the diffusion index declined to 47.0 from 53.0 in July, and down sharply from 67.1 in April.

    Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS. From the BLS:
    Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.
    The increases in the diffusion indices in 2009 and earlier this year, was a clear positive in the monthly employment reports. However the decrease in the diffusion indices over the last few months (falling below 50% for manufacturing in August), is disappointing.

    Earlier employment posts today (with many graphs):
  • August Employment Report: 60K Jobs ex-Census, 9.6% Unemployment Rate
  • Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks