Friday, July 05, 2013

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

by Calculated Risk on 7/05/2013 08:31:00 PM

Earlier on the employment report:
June Employment Report: 195,000 Jobs, 7.6% Unemployment Rate
Employment Report: More Hiring, Wages Up, Still Weak Labor Market

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 2.8% 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 (all four categories are only gradually declining).

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 377 thousand.    Only 13 thousand construction jobs were added in June.  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 (Merrill estimates 20 thousand construction jobs per month will be added this year, Goldman estimates 25 to 30 thousand jobs per month, Deutsche Bank around 50 thousand jobs per month in the 2nd half).

Diffusion Indexes

Employment Diffusion Index The BLS diffusion index for total private employment was at 58.8 in June, down from 61.8 in May.

For manufacturing, the diffusion index decreased to 46.3, down from 48.1 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 fairly widespread in June.   This is a good sign for the economy.  However, for manufacturing, more companies were decreasing employment than adding jobs again in June - for the third consecutive month.