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Friday, November 04, 2011

Report on Greece: Papandreou to Stand Down, Venizelos to Form Government, Elections in February

by Calculated Risk on 11/04/2011 06:34:00 PM

UPDATE via Athens News: 00.56am The voting has finished. Unconfirmed results on Twitter: Yes 153, No 143. Papandreou has won.

From Reuters: Greek Leaders Strike Deal for a New Government

Greek Prime Minister George Papandreou has struck a deal to stand down and let Finance Minister Evangelos Venizelos form a coalition government ... They said Venizelos had won the backing of leaders of some smaller parties to support the coalition, which would also aim to avert an immediate Greek bankruptcy, before calling early elections in a few months.
And a comment from Venizelos via the Athens News: Live news blog – November 4
Finance Minister Evangelos Venizelos giving a speech. Says country needs effective government. Has just said that interim government should stay in power until February, then elections.
Here are the earlier employment posts (with graphs):
October Employment Report: 80,000 Jobs, 9.0% Unemployment Rate
Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
Seasonal Retail Hiring, Duration of Unemployment, Unemployment by Education and Diffusion Indexes
NEW Employment graph gallery (fast, no scripting)

Greek Confidence Vote Resources

by Calculated Risk on 11/04/2011 05:41:00 PM

A couple of resources:

From the Athens News: Live news blog – November 4 Most recent at top ...

11.40pm "I don't care if I'm not re-eelected."

11.39pm Papandreou: "It's time for cooperation." In June, I tried to set up govt of national cooperation.

11.37pm Mentions more achievements: methadone programme, fast track on developments, surge in tourist numbers, suspending dodgy doctors who take bribes, etc

Also mentioned football!

11.35pm Is reading out a list of things he would do if crossparty agreement can be achieved.

11.33pm Papandreou says all parties should support October 27 agreement.

11.32pm If elections took place, parliament would be out of action for weeks. Would be unable to vote on 2012 budget.

11.30pm Has now turned to subject of elections: he is against elections.

11.28pm With the referendum, he wanted to bypass Byzantium and go back to direct democracy Ancient Greece!
...
11.26pm Papandreou recounts some of his achievements. Mentions free radio, Open University, delegalising cannabis, allowing migrant children enter university, e-government etc
From the Telegraph: Debt crisis: live

Construction Employment: Down in October, up slightly in 2011

by Calculated Risk on 11/04/2011 03:10:00 PM

The graph below shows the number of total construction payroll jobs in the U.S. including both residential and non-residential since 1969.

Construction employment declined by 20 thousand jobs in October, and is now down 2.2 million jobs from the peak in April 2006. However construction employment is up 27 thousand this year through the October BLS report.

Unfortunately this graph is a combination of both residential and non-residential construction employment. The BLS only started breaking out residential construction employment fairly recently (residential specialty trade contractors in 2001).

Construction Employment Click on graph for larger image.

Usually residential investment (and residential construction) lead the economy out of recession, and non-residential construction usually lags the economy. Because this graph is a blend, it masks the usual pickup in residential construction following previous recessions.

Construction employment is mostly moving sideways, but at least it is not a drag on employment and GDP this year - and that helps.

This table below shows the annual change in construction jobs (total, residential and non-residential) and through October for 2011.

Annual Change in Payroll jobs (000s)
YearTotal Construction JobsResidential Construction JobsNon-Residential
2002-8588-173
2003127161-34
200429023060
2005416268148
2006152-62214
2007-198-27375
2008-787-510-277
2009-1053-431-622
2010-149-113-36
Through October 2011271116

After five consecutive years of job losses for residential construction (and four years for total construction), it looks like construction employment will increase this year. However there will not be a strong increase in residential construction until the excess supply of housing is absorbed.

In addition residential investment has made a small positive contribution to GDP so far this year - for the first time since 2005.

Here are the earlier employment posts (with graphs):
October Employment Report: 80,000 Jobs, 9.0% Unemployment Rate
Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
Seasonal Retail Hiring, Duration of Unemployment, Unemployment by Education and Diffusion Indexes
NEW Employment graph gallery (fast, no scripting)

Seasonal Retail Hiring, Duration of Unemployment, Unemployment by Education and Diffusion Indexes

by Calculated Risk on 11/04/2011 12:21:00 PM

Here are the earlier employment posts (with graphs):
October Employment Report: 80,000 Jobs, 9.0% Unemployment Rate
Employment Summary, Part Time Workers, and Unemployed over 26 Weeks
NEW Employment graph gallery (fast, no scripting)

And a few more graphs ...

Seasonal Retail Hiring

According to the BLS employment report, retailers hired seasonal workers at close to the pre-crisis pace in October.

Seasonal Retail HiringClick on graph for larger image.

Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.

This really shows the collapse in retail hiring in 2008, and the increases in 2009 and 2010.

Retailers hired 141.5 thousand workers (NSA) net in October. This is about the same level as in 2003 through 2006 and the same as in 2010. Note: this is NSA (Not Seasonally Adjusted).

This suggests retailers are somewhat optimistic about the holiday season.

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.

Only one category increased in October: The 6 to 14 weeks. This is due to the increase in short term unemployment in August and September. A little bit of recent good news is that short term unemployment (less than 5 weeks) has declined.

The the long term unemployed declined to 3.8% of the labor force - the number (and percent) of long term unemployed remains very high.

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".

Diffusion Indexes

Employment Diffusion Index This is a little more technical. The BLS diffusion index for total private employment was at 60.7 in October, up from 56.7 in September. For manufacturing, the diffusion index increased to 51,9, up from 50 in September.

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.
It appears job growth is spread across more industries in October, and that is a little bit of good news.

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

Employment Summary, Part Time Workers, and Unemployed over 26 Weeks

by Calculated Risk on 11/04/2011 10:11:00 AM

This was a weak report, and the headline number was slightly below consensus forecasts. However some of the underlying data was a little more encouraging (with emphasis on "little").

There were only 80,000 jobs added in October. There were 104,000 private sector jobs added, and 24,000 government jobs lost.

However the change in total employment was revised up for August and September. "The change in total nonfarm payroll employment for August was revised from +57,000 to +104,000, and the change for September was revised from +103,000 to +158,000."

The household survey showed an increase of 277,000 jobs in October. This increase in the household survey pushed the unemployment rate down slightly, even as more people participated in the workforce (labor force increased by 181,000). The unemployment rate declined to 9.0%, and the participation rate was unchanged at 64.2%. The employment population ratio also increased to 58.4% from 58.3%. This is the third straight monthly increase in the employment population ratio from the low in July at 58.1%.

U-6, an alternate measure of labor underutilization that includes part time workers and marginally attached workers, declined to 16.2% - and this is very high. The low for the year was 15.7% in March, and the high was 16.5% in September. U-6 was in the 8% range in 2007.

The average workweek was unchanged at 34.3 hours, and average hourly earnings increased slightly. "The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in October... In October, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents, or 0.2 percent, to $23.19. ... Over the past 12 months, average hourly earnings have increased by 1.8 percent." This is sluggish earnings growth, and earnings are being impacted by the large number of unemployed and marginally employed workers.

Through the first ten months of 2011, the economy has added 1.256 million total non-farm jobs or just 125 thousand per month. This is a better pace of payroll job creation than last year, but the economy still has 6.47 million fewer payroll jobs than at the beginning of the 2007 recession. The economy has added 1.529 million private sector jobs this year, or about 153 thousand per month.

There are a total of 13.9 million Americans unemployed and 5.9 million have been unemployed for more than 6 months. Very grim.

Overall this was another weak employment report and suggests sluggish economic growth.

Percent Job Losses During Recessions

Percent Job Losses During RecessionsClick on graph for larger image.

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

Part Time WorkersFrom the BLS report:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) decreased by 374,000 to 8.9 million in October.
The number of workers only able to find part time jobs (or have had their hours cut for economic reasons) decreased to 8.896 million in October from 9.27 million in September. This just reverses some of the increase last month.

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

Unemployed over 26 Weeks

Unemployed Over 26 Weeks This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 5.876 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 6.242 million in September. This is still very high, but near the low for the year. Long term unemployment remains a serious problem.

• Earlier Employment post: October Employment Report: 80,000 Jobs, 9.0% Unemployment Rate