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Friday, December 07, 2012

November Employment Diffusion Indexes

by Calculated Risk on 12/07/2012 08:24:00 PM

Earlier on employment:
November Employment Report: 146,000 Jobs, 7.7% Unemployment Rate
Employment Report: More Positives than Negatives
All Employment Graphs

This is a technical indicator that I like to follow. The employment diffusion indexes are 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.
Employment Diffusion IndexClick on graph for larger image.

The BLS diffusion index for total private employment was at 59.0 in November, down from 63.0 in October. For manufacturing, the diffusion index declined to 47.5, down from 56.8 in October.

We'd like to see the diffusion indexes consistently above 60 - and even in the 70s like in the '1990s. But even 59 isn't bad and this suggests job growth was spread across a number of industries in November.