by Calculated Risk on 10/07/2011 06:40:00 PM

The Association of American Railroads (AAR) reports carload traffic in September 2011 1.1 percent compared with the same month last year, and intermodal traffic (using intermodal or shipping containers) increased 2.3 percent compared with September 2010. On a seasonally adjusted basis, carloads in were up 1.1% in September 2011 compared with August 2011; intermodal in September 2011 was up 1.0% from August 2011.

U.S. freight railroads originated 1,195,671 carloads in September 2011, an average of 298,918 carloads per week and up 1.1% over September 2010 (see charts below). During the last week of September — Week 39 of 2011 — U.S. railroads originated 312,170 carloads of freight, which is more carload traffic than in any week since Week 45 in November 2008.

Click on graph for larger image in graph gallery.

This graph shows U.S. average weekly rail carloads (NSA).

Rail carload traffic collapsed in November 2008, and now, over 2 years into the recovery, carload traffic is only about half way back.

The second graph is for intermodal traffic (using intermodal or shipping containers):

U.S. rail intermodal traffic rose for the 22nd straight month in September 2011.1 U.S. railroads originated 949,606 containers and trailers for the month for an average of 237,402 units per week, up 2.3% from September 2010, up from an average of 235,968 in August 2011, and the highest weekly average for any month since October 2007 (see the chart on the top right of the next page). Week 39 of 2011, the last week of September, had intermodal volume of 250,864 intermodal units, the 12th highest-volume intermodal week ever for U.S. railroads and the highest of any week since Week 39 in September 2007.
excerpts with permission

Rail traffic improved in September, and really picked up towards the end of the month.

by Calculated Risk on 10/07/2011 03:14:00 PM

Another day, same Europe.

• From Bloomberg: Fitch Cuts Spain, Italy Credit Ratings; Outlooks Negative

Spain had its foreign and local currency long-term issuer default ratings cut to AA- from AA+, while Italy had the same set of ratings to A+ from AA-, the company said in statements today. The outlook for both countries is negative. Fitch also maintained Portugal’s rating at BBB-, saying it would complete a review of that ranking in the fourth quarter.

• From the WSJ: Moody's Cuts U.K. Lenders

Moody's Investors Service Friday downgraded 12 U.K. banks and building societies, and left the door open for further ratings cuts at three of the U.K.'s largest lenders as it reassesses the willingness of the U.K. government to support the institutions.

• From the WSJ: EU Steps Up Crisis Response

European Commissioner for Economic Affairs Olli Rehn on Friday revealed among other things that there are talks to fast-forward plans for a permanent rescue vehicle while he expects a solution on recapitalizing European banks to come within a few days.

"I am confident that the euro-zone summit and the European Council will be able to make a decision in mid-October on how a coordinated Europe can help to solve the distrust towards the banks' capitalization," Mr. Rehn told a conference in Helsinki.

His comments were echoed by German Chancellor Angela Merkel, who said Friday that EU leaders will discuss at the Oct. 17-18 summit how to proceed with possible bank recapitalizations.

Here are the earlier employment posts (with graphs):
• September Employment Report: 103,000 Jobs, 9.1% Unemployment Rate
• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
• Duration of Unemployment, Unemployment by Education and Diffusion Indexes
• Employment graph gallery

by Calculated Risk on 10/07/2011 01:03:00 PM

Here are the earlier employment posts (with graphs):
• September Employment Report: 103,000 Jobs, 9.1% Unemployment Rate
• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
• Employment graph gallery

And a few more graphs based on the employment report:

Duration of Unemployment
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.

Two categories increased in August: The 27 weeks and more (the long term unemployed) increased to 6.242 million workers, or just over 4.0% of the labor force, and the less than '5 weeks' category increased slightly - this followed the recent increase in initial weekly unemployment claims.

The other two categories decreased. The decrease in the '15 to 26 weeks' group is probably from workers moving into the 27 weeks and more category.

The key point is the that number (and percent) of long term unemployed remains very high.

Unemployment by Education
This 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 job - as an example, a college graduate working at minimum wage would be considered "employed".

Diffusion Indexes
This is a little more technical. The BLS diffusion index for total private employment was at 55.4 in September, down slightly from 55.6 in August, and for manufacturing, the diffusion index decreased to 46.3 - the 2nd consecutive reading under 50.

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.

This was the lowest diffusion index for total private employment since May, and the lowest for manufacturing since October 2010.

We'd like to see the diffusion indexes consistently above 60 - and even in the 70s like in the '1990s.

by Calculated Risk on 10/07/2011 10:11:00 AM

This was a weak report, but better than many expected. A few points:

• The Verizon labor dispute subtracted 45,000 payroll jobs in August and those jobs were added back in September. From the BLS: "The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August."

• The household survey showed an increase of 398,000 jobs in September. This increase in the household survey kept the unemployment rate from rising, even as more people participated in the workforce (labor force increase by 423,000). The unemployment rate was unchanged at 9.1%, and the participation rate increased to 64.2% from 64.0%. The employment population ratio also increased to 58.3% from 58.2%.

• Employment for July and August were revised up. From the BLS: "The change in total nonfarm payroll employment for July was revised from +85,000 to +127,000, and the change for August was revised from 0 to +57,000." That is an additional 99,000 jobs.

This was still a weak employment report. There were only 103,000 jobs added in September. There were 137,000 private sector jobs added, and 34,000 government jobs lost.

U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, increased to 16.5%; this is at the high for the year.

The average workweek increased slightly to 34.3 hours, and average hourly earnings increase slightly - but this just reversed the decline in August. "The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour over the month to 34.3 hours following a decrease of 0.1 hour in August. The manufacturing workweek edged down by 0.1 hour in September to 40.2 hours. ... In September, average hourly earnings for all employees on private nonfarm payrolls increased by 4 cents, or 0.2 percent, to $23.12. This increase followed a decline of 4 cents in August."

Through the first nine months of 2011, the economy has added 1.074 million total non-farm jobs or just 119 thousand per month. This is a better pace of payroll job creation than last year, but the economy still has 6.6 million fewer payroll jobs than at the beginning of the 2007 recession. The economy has added 1.341 million private sector jobs this year, or about 149 thousand per month.

There are a total of 13.992 million Americans unemployed and 6.24 million have been unemployed for more than 6 months. Very grim.

Overall this was a weak report, and only looked decent because expectations were so low.

Percent Job Losses During Recessions

Click on graph for larger image in graph gallery.

This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.

In the previous post, the graph showed the job losses aligned at the start of the employment recession.

In terms of lost payroll jobs, the 2007 recession was by far the worst since WWII.

Part Time for Economic Reasons

From the BLS report:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose to 9.3 million in September.

The number of workers only able to find part time jobs (or have had their hours cut for economic reasons) increased to 9.27 million in September from 8.826 million in August. This is the high for the year.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 16.5% in September from 16.2% in August.

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 6.242 million workers who have been unemployed for more than 26 weeks and still want a job. This was up from 6.034 million in August. This is very high - near the highest level this year, and long term unemployment remains a serious problem.

• Earlier Employment post: September Employment Report: 103,000 Jobs, 9.1% Unemployment Rate

by Calculated Risk on 10/07/2011 08:30:00 AM

From the BLS:

Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August.
...
The change in total nonfarm payroll employment for July was revised from +85,000 to +127,000, and the change for August was revised from 0 to +57,000

The following graph shows the employment population ratio, the participation rate, and the unemployment rate.

Click on graph for larger image in graph gallery.

The unemployment rate was unchanged at 9.1% (red line).

The Labor Force Participation Rate increased to 64.2% in September (blue line). This is the percentage of the working age population in the labor force. The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although some of the decline is due to the aging population.

The Employment-Population ratio increased to 58.3% in September (black line).

Note: the household survey showed a strong gain in jobs, and that is why the unemployment rate could hold steady with few payroll jobs added - and the participation rate increase.

The second graph shows the job losses from the start of the employment recession, in percentage terms. The dotted line is ex-Census hiring.

The red line is moving sideways - and I'll need to expand the graph soon.

This was still a weak report, but better than August (although the 45,000 Verizon workers made a big difference). There were decent upwards revisions to the July and August reports too. I'll have much more soon ...