RSS Feed by Calculated Risk on 7/04/2015 12:23:00 PM
Saturday, July 04, 2015
Update: Prime Working-Age Population Growing Again
An update: Last year, I posted some demographic data for the U.S., see: Census Bureau: Largest 5-year Population Cohort is now the "20 to 24" Age Group, Decline in the Labor Force Participation Rate: Mostly Demographics and Long Term Trends, and The Future's so Bright ...
I pointed out that "even without the financial crisis we would have expected some slowdown in growth this decade (just based on demographics). The good news is that will change soon."
Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the "baby boomer" generation, the movement of younger cohorts into the prime working age is another key story in coming years. Here is a graph of the prime working age population (this is population, not the labor force) from 1948 through June 2015.
Click on graph for larger image.
There was a huge surge in the prime working age population in the '70s, '80s and '90s - and the prime age population has been mostly flat recently (even declined a little).
The prime working age labor force grew even quicker than the population in the '70s and '80s due to the increase in participation of women. In fact, the prime working age labor force was increasing 3%+ per year in the '80s!
So when we compare economic growth to the '70s, '80, or 90's we have to remember this difference in demographics (the '60s saw solid economic growth as near-prime age groups increased sharply).
See: Demographics and GDP: 2% is the new 4%
The prime working age population peaked in 2007, and appears to have bottomed at the end of 2012. The good news is the prime working age group has started to grow again, and is now growing close to 0.5% per year - and this should boost economic activity.
Friday, July 03, 2015
Public and Private Sector Payroll Jobs: Carter, Reagan, Bush, Clinton, Bush, Obama
by Calculated Risk on 7/03/2015 12:15:00 PM
By request, here is an update on an earlier post through the June employment report.
NOTE: Several readers have asked if I could add a lag to these graphs (obviously a new President has zero impact on employment for the month they are elected). But that would open a debate on the proper length of the lag, so I'll just stick to the beginning of each term.
Note: We frequently use Presidential terms as time markers - we could use Speaker of the House, or any other marker.
Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now. But these graphs give an overview of employment changes.
First, here is a table for private sector jobs. The top two private sector terms were both under President Clinton. Reagan's 2nd term saw about the same job growth as during Carter's term. Note: There was a severe recession at the beginning of Reagan's first term (when Volcker raised rates to slow inflation) and a recession near the end of Carter's term (gas prices increased sharply and there was an oil embargo).
| Term | Private Sector Jobs Added (000s) |
|---|---|
| Carter | 9,041 |
| Reagan 1 | 5,360 |
| Reagan 2 | 9,357 |
| GHW Bush | 1,510 |
| Clinton 1 | 10,884 |
| Clinton 2 | 10,073 |
| GW Bush 1 | -844 |
| GW Bush 2 | 381 |
| Obama 1 | 2,018 |
| Obama 2 | 6,5161 |
| 129 months into 2nd term: 10,785 pace. | |
The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). President George H.W. Bush only served one term, and President Obama is in the third year of his second term.
Mr. G.W. Bush (red) took office following the bursting of the stock market bubble, and left during the bursting of the housing bubble. Mr. Obama (blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (yellow) took office.
There was a recession towards the end of President G.H.W. Bush (purple) term, and Mr Clinton (light blue) served for eight years without a recession.
Click on graph for larger image.The first graph is for private employment only.
The employment recovery during Mr. G.W. Bush's (red) first term was sluggish, and private employment was down 844,000 jobs at the end of his first term. At the end of Mr. Bush's second term, private employment was collapsing, and there were net 463,000 private sector jobs lost during Mr. Bush's two terms.
Private sector employment increased slightly under President G.H.W. Bush (purple), with 1,510,000 private sector jobs added.
Private sector employment increased by 20,955,000 under President Clinton (light blue), by 14,717,000 under President Reagan (yellow), and 9,041,000 under President Carter (dashed green).
There were only 2,018,000 more private sector jobs at the end of Mr. Obama's first term. Twenty eight months into Mr. Obama's second term, there are now 8,534,000 more private sector jobs than when he initially took office.
A big difference between the presidencies has been public sector employment. Note the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, and 2010. The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).
However the public sector has declined significantly since Mr. Obama took office (down 638,000 jobs). These job losses have mostly been at the state and local level, but more recently at the Federal level. This has been a significant drag on overall employment.
And a table for public sector jobs. Public sector jobs declined the most during Obama's first term, and increased the most during Reagan's 2nd term.
| Term | Public Sector Jobs Added (000s) |
|---|---|
| Carter | 1,304 |
| Reagan 1 | -24 |
| Reagan 2 | 1,438 |
| GHW Bush | 1,127 |
| Clinton 1 | 692 |
| Clinton 2 | 1,242 |
| GW Bush 1 | 900 |
| GW Bush 2 | 844 |
| Obama 1 | -702 |
| Obama 2 | 331 |
| 129 months into 2nd term, 55 pace | |
Looking forward, I expect the economy to continue to expand through 2016 (at least), so I don't expect a sharp decline in private employment as happened at the end of Mr. Bush's 2nd term (In 2005 and 2006 I was warning of a coming recession due to the bursting of the housing bubble).
For the public sector, the cutbacks are clearly over at the state and local levels, and it appears cutbacks at the Federal level might also be over. Right now I'm expecting some increase in public employment during Obama's 2nd term, but nothing like what happened during Reagan's second term.
Here is a table of the top three presidential terms for private job creation (they also happen to be the three best terms for total non-farm job creation).
Clinton's two terms were the best for both private and total non-farm job creation, followed by Reagan's 2nd term.
Currently Obama's 2nd term is on pace to be the 2nd best ever for private job creation. However, with very few public sector jobs added, Obama's 2nd term is only on pace to be the third best for total job creation.
Note: Only 33 thousand public sector jobs have been added during the first twenty nine months of Obama's 2nd term (following a record loss of 702 thousand public sector jobs during Obama's 1st term). This is less than 3% of the public sector jobs added during Reagan's 2nd term!
| Top Employment Gains per Presidential Terms (000s) | ||||
|---|---|---|---|---|
| Rank | Term | Private | Public | Total Non-Farm |
| 1 | Clinton 1 | 10,884 | 692 | 11,576 |
| 2 | Clinton 2 | 10,073 | 1,242 | 11,315 |
| 3 | Reagan 2 | 9,357 | 1,438 | 10,795 |
| Obama 21 | 6,516 | 33 | 6,549 | |
| Pace2 | 10,785 | 55 | 10,840 | |
| 129 Months into 2nd Term 2Current Pace for Obama's 2nd Term | ||||
The second table shows the jobs needed per month for Obama's 2nd term to be in the top three presidential terms.
| Average Jobs needed per month (000s) for Obama's 2nd Term | ||||
|---|---|---|---|---|
| to Rank | Private | Total | ||
| #1 | 230 | 265 | ||
| #2 | 187 | 251 | ||
| #3 | 150 | 223 | ||
Schedule for Week of July 5, 2015
by Calculated Risk on 7/03/2015 08:11:00 AM
It feels like a Saturday ...
The key report this coming week is the May Trade Deficit on Tuesday, and the June ISM non-manufacturing index on Monday.
Fed Chair Janet Yellen speaks on Friday on the U.S. Economic Outlook.
10:00 AM ET: The Fed will release the monthly Labor Market Conditions Index (LMCI).
10:00 AM: the ISM non-Manufacturing Index for June. The consensus is for index to increase to 56.0 from 55.7 in May.
8:30 AM: Trade Balance report for May from the Census Bureau. This graph shows the U.S. trade deficit, with and without petroleum, through April. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.
The consensus is for the U.S. trade deficit to be at $42.0 billion in May from $40.9 billion in April.
10:00 AM: Job Openings and Labor Turnover Survey for May from the BLS. This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.
Jobs openings increased in April to 5.376 million from 5.109 million in March.
The number of job openings (yellow) were up 22% year-over-year compared to April 2014, and Quits were up 11% year-over-year.
3:00 PM: Consumer Credit for May from the Federal Reserve. The consensus is for an increase of $18.5 billion in credit.
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
2:00 PM: The Fed will release the FOMC Minutes for the Meeting of June 16-17, 2015
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 275 thousand from 281 thousand.
12:30 PM, Speech by Fed Chair Janet Yellen, U.S. Economic Outlook, at The City Club of Cleveland's Sally Gries Forum Honoring Women of Achievement, Cleveland, Ohio
Thursday, July 02, 2015
Earlier: Weekly Initial Unemployment Claims increased to 281,000
by Calculated Risk on 7/02/2015 08:24:00 PM
A quick graph of unemployment claims ... Note: Starting with this release, the DOL is including a table of unadjusted State-level "advance"claims.
The DOL reported:
In the week ending June 27, the advance figure for seasonally adjusted initial claims was 281,000, an increase of 10,000 from the previous week's unrevised level of 271,000. The 4-week moving average was 274,750, an increase of 1,000 from the previous week's unrevised average of 273,750.The previous week was unrevised.
There were no special factors impacting this week's initial claims.
The following graph shows the 4-week moving average of weekly claims since 1971.
Click on graph for larger image.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 274,750.
This was above the consensus forecast of 270,000, and the low level of the 4-week average suggests few layoffs.
Hotels: On Pace for Record Occupancy in 2015, RevPAR up almost 50% from 2009
by Calculated Risk on 7/02/2015 05:08:00 PM
From HotelNewsNow.com: STR: US hotel results for week ending 27 June
The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 21-27 June 2015, according to data from STR, Inc.For the same week in 2009, ADR (average daily rate) was $97.49 and RevPAR (Revenue per available room) was $63.74. ADR is up over 25% since June 2009, and RevPAR is up almost 50%!
In year-over-year measurements, the industry’s occupancy increased 1.1 percent to 76.9 percent. Average daily rate for the week was up 4.6 percent to US$122.15. Revenue per available room increased 5.7 percent to finish the week at US$93.96.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The occupancy rate will be high during the summer travel season.
The red line is for 2015, dashed orange is 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels. Purple is for 2000.The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and above last year.
Right now 2015 is close to 2000 (best year for hotels) - and so far 2015 has run slightly above 2000 - and this year will probably be the best year ever for hotels.
Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com
