May 2008 Jobs Report and Wages

Here are the job market and compensation numbers for April 2008 (based on the job report):

Net loss of 49,000 jobs in the month (revised to loss of 62,000 jobs)

  • April modified to a loss of 28,000 jobs (was estimated as a loss of 20,000)
  • Analysts expected a loss of of either 58,000 or 60,000
  • Five straight months of job losses
  • For 2008, 324,000 jobs have been cut, an average of 65,000 a month
  • The private sector has cut 411,000 jobs over 6 months (68,500 average)
  • The number of people in the workforce increased by 577,000
    • It was 173,000 in April
    • College students


Unemployment rate rocketed up to 5.5% 

  • Biggest monthly jump in 22 years
  • It is the highest its been in 3 1/2 years
  • Forecasters thought the rise would be to 5.1%
  • Some analysts believe this number will be revised down because of the flood of college students entering the workforce
    • Taking presumptive teenagers out of the mix the unemployment still rises from 4.5% to 4.8%
    • This number was 4.0% a year ago
  • Long term unemployed increased from 17.8% to 18.3% in May
  • Paul Ashworth said. “The economy has little forward momentum, employment is shrinking and the unemployment rate could reach 6 percent by the end of the year.”


Specific Segment Job numbers:

  • Construction lost 34,000 jobs
  • Retail lost 27,000
  • Professional and Business Services lost 39,000
  • Manufacturing lost 26,000 jobs (46,000 jobs lost in April – good sign?)
  • Healthcare added 34,000
  • Education and Health Services added 54,000 jobs
  • Temp workers loss 30,000 jobs
    • 150,000 lost over the year
    • Considered a bellwether for the economy because these jobs go first
  • Public sector added 17,000 jobs


Correlations:

  • The surge of college students created a lot of distortion on the unemployment percentage. This can be revised next month or maybe evened out in September (although no vacuum was mentioned this past September)
  • The birth/death model is fluctuating to a negative
  • Spending on fuel as a share of wage income rose above 6%. That exceeds the percentage seen during the 1974-75 and 1990-91 oil-price shocks and approaches the 7% to 8% seen during the 1980-81 price surge


Notes:

  • Paul Ashworth, senior US. economist with London-based Capital Economics, noted that the pace at which jobs were being lost has actually slowed
    • In the first three months this year, job losses averaged about 83,000 monthly, but in April and May, the pace slowed to 38,500
  • Although employers have cut jobs for five consecutive months, the number of job losses has so far been mild by the standards of previous recessions
    • At the start of the 2001 recession, companies shed around 110,000 jobs each month and almost 130,000 when the 1990 recession began

Job Report Stats Page

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