Friday, August 02, 2013

Graphs: Duration of Unemployment, Unemployment by Education, Construction Employment and Diffusion Indexes

by Bill McBride on 8/02/2013 04:16:00 PM

Earlier on the employment report:
July Employment Report: 162,000 Jobs, 7.4% Unemployment Rate
Employment Report: Steady, but Slow Improvement


A few more employment graphs by request ...


Duration of Unemployment

Unemployment Duration This graph shows the duration of unemployment as a percent of the civilian labor force. The graph shows the number of unemployed in four categories: less than 5 week, 6 to 14 weeks, 15 to 26 weeks, and 27 weeks or more.

The general trend is down for all categories, but only the less than 5 weeks is back to normal levels. 

The long term unemployed is at 2.7% of the labor force - the lowest since May 2009 - however the number (and percent) of long term unemployed remains a serious problem.

Unemployment by Education

Unemployment by Level of EducationThis graph shows the unemployment rate by four levels of education (all groups are 25 years and older).

Unfortunately this data only goes back to 1992 and only includes one previous recession (the stock / tech bust in 2001). Clearly education matters with regards to the unemployment rate - and it appears all four groups are generally trending down.

Although education matters for the unemployment rate, it doesn't appear to matter as far as finding new employment - and the unemployment rate is moving sideways for those with a college degree!

Note: This says nothing about the quality of jobs - as an example, a college graduate working at minimum wage would be considered "employed".

Construction Employment

Construction EmploymentThis graph shows total construction employment as reported by the BLS (not just residential).

Since construction employment bottomed in January 2011, construction payrolls have increased by 358 thousand.    According to the BLS, essentially no construction jobs have been over the last five months.  Historically there is a lag between an increase in activity and more hiring - and it appears hiring should pickup significant in the 2nd half of 2013 (I also think construction employment will be revised up in the annual revision).

Diffusion Indexes

Employment Diffusion Index The BLS diffusion index for total private employment was at 54.5 in July, down from 57.3 in June.

For manufacturing, the diffusion index increased to 50.0, up from 45.7 in June.

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.
Job growth for total private employment was not widespread in July.  

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