January 2011 Jobs Report and Wages

Here are the job market and compensation numbers for January 2011 (based on the job report):


Net gain
of 36,000 jobs in the month
(revised in March to a gain of 68,000)

  • Analysts expected an overall gain of 149,000
  • Private sector payrolls increased by 50,000
    • Private service producing industries added 32,000
    • Goods producing industries gained 18,000


  • December was revised to a gain of 152,000 from a revision of 121,000 and from an original reading of 103,000
  • November was revised to a gain of 93,000 from a revised reading of 71,000 and an original reading of 39,000 gain
  • October was revised to a gain of 171,000 from a second revision of 210,000 a revised reading of 172,000 and an original reading of 151,000
  • Payroll processor ADP reported an employment gain of 187,000 jobs (a revised 247,000 jobs in December, 2010)
    • The ADP survey and the Jobs Report survey aren’t usually this varying in their results, which, coupled with other data, makes people think the economy is shifting and the models used in the Government report are not currently effective

  • The Labor Department estimates there were 886,000 workers who had a job but couldn’t get to work due to weather (5th largest account of this situation) – if true, this means the real gain in jobs is estimated to be 200,000
  • 6.2 million people have been jobless for more than 6 months (long term
    unemployed) – down from 6.4 million last month

    • 43.8% of the unemployed are long term unemployed – down from 44.3% last month and up from 41.9% in November, 2010
  • Employers announced plans to cut 38,519 jobs in January, a 20% increase over December, according to outplacement consulting firm Challenger, Gray & Christmas. This is a really low number because it usually averages just over 100,000 for the month of January every year
  • Benchmark revisions were made for April 2009 to March of 2010 and show combined additional loss of 215,000 jobs during that period
  • Overall, it was a  confusing report – the numbers seem to contradict each other

Unemployment rate dropped to 9.0%

  • Analysts predicted it would rise to 9.5%
  • The 0.8% drop in a span of two months is rare: only 4 larger two month declines on record and those were in the 1940s and 1950s
  • The unemployment rate has been at 9% or higher for 21 months
  • Normally, when a decrease in the unemployment number happens without a very large number of new jobs it means people have dropped out of the count, but that isn’t the case this month – this is odd (504,000 people did drop out though)
  • The labor force
    participation rate is 64.2% (66.5% is average to good) – relatively unchanged
  • The employment to population ratio is 58.4% – relatively unchanged from 58.3% last month
  • The
    U-6
    report, which is a broader group to count (workers who are part
    time but want to be full time and discouraged worker), dropped to 16.1% from 16.7%.
    This reflects an even greater decrease seen in the overall unemployment rate (9.0% from 9.4%)
  • PMI,
    a measure of manufacturing pace, is 57% and the 20th consecutive
    month of readings over 50 percent. Anything above 50% means the
    machines are running
  • Service sector activity rose to 59.4%, up from 57.1% last month. It was the 14th straight month of growth and the highest reading since August 2005
  • 2010 fourth quarter productivity is reported at 2.6% and annualized at 3.6%

Specific Segment Job numbers:

  • Manufacturing gained 49,000 jobs
  • Construction lost 32,000 jobs
  • Retailers gained 27,500 jobs
  • Leisure and Hospitality Services lost 3,000 jobs
  • Government sector lost 14,000, Federal lost 2,000
  • Education and Health Services grew by 13,000 jobs
    • Health Care and Social Assistance grew by 12,900

  • Professional and Business Services grew by 31,000
    • 11,400 jobs lost in Temporary Help (had been gaining for several months)

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $645.96 – an increase of $1.42
  • The average hourly earning (seasonally adjusted) is $19.34
  • Average
    weekly hours and overtime of production and nonsupervisory employees on
    private nonfarm payrolls by industry sector, seasonally adjusted is
    33.4 hours

Bureau of Labor Statistics

Job Report Stats Summary

Tracking Employment News

14 million people are without jobs. Imagine everyone in NYC, Chicago,
Philadelphia, and Dallas without a job. That’s almost 14 million. I
mention this because the tone of the news regarding employment has
improved since the beginning of fall 2010. It’s almost like we’ve been
on this long road trip and we can finally see the skyscrapers in the
distance. There’s miles to go, but hope is in sight.

I mentioned a few posts ago about the value of the A employee.
I said they are changing the dynamics of the job market and I praised
them. But I can’t pin them down. Sometimes they are the 35 year veteran
and other times they are the 35 year old hitting their stride. Youth
often prevails and so does being a woman. You just never know.

Anne Fisher over to Fortune.com highlighted a great resource for seeing who’s hiring called A Real-Time Look at Who’s Hiring and Where. Vault.com has a tool called Vault Employment Tracker. It’s a simple database organizing all the job announcements.

Date http://www.vault.com/images/icons/desc-arrow.png

Company 

Layoffs 

Hires 

Notes

Industry 

Info

01/18/11

AM General

300

0

AM will layoff 300 workers after the military reduced its order for Humvees.

Manufacturing

More

01/18/11

Unified Solutions Inc

228

0

Manufacturing – Other

More

01/18/11

Karachi Electric Supply Company (KESC)

4000

0

The layoffs are part of a cost-cutting drive to make the power utility financially viable, sources said on Friday.

Energy

More

01/18/11

Johnson Controls Inc.

0

250

The auto parts planct broke ground on its battery recycling plant in Florence, S.C.; it’s set to be finished next year.

Manufacturing – Other

More

01/18/11

Sam’s Club

0

170

The company is looking to hire every position from cashiers to supervisorsat its new location on  in Riverview, FL.

Department Stores

More

01/14/11

Berkeley College

150

0

Affected employees–non-faculty-members–will be let go by June.

College and University Education

More

01/14/11

Lockheed Martin Corporation

1000

0

LM, which is closing its Eagan plant in 2013 is cutting 250 jobs altogether, down from the original 350 anticipated.

Aerospace and Defense

More

01/14/11

Public Health-Seattle and King County

123

0

Nurses, social workers and other staffers were let go as a result of a 50% budget cut to an aid program for low-income pregant women and babies.

Insurance

More

01/14/11

Sterling Life Insurance

80

0

Sterling is adjusting to reduction of enrollment in one of its key products.

Health Insurance

More

01/14/11

SoloPower

0

170

SoloPower said Thursday that it is opening up a new, solar panel manufacturing facility in Oregon

Manufacturing

More

Picking the Best Team

“You wouldn’t believe it.” he says, although I’m sure I not only would believe it, but I can top it. “I was in first place in my league until Aaron Rodgers has a concussion and has to sit out. My back up was whoever the guy is from the Lions.” I pretended to listen, but I’m really thinking about my own team. These fantasy football stories aren’t for the person hearing the story, they’re for the person telling it. Occasionally it’s about how they won the league, but much more often, the tale is about a loss. “If Rodgers didn’t get hurt…” There’s always an “if.” He’ll be back next year.

The beauty of fantasy football is every year you get to pick your team. Most of the elite players – the A players – are taken in a draft or auction. The handful you select become your guys, your team. You then get a chance to pick up free agents during the season to supplement the team. It’s fun to look over the team and watch on Sundays.

Something similar is happening in the business world. We’ve hit a sweet spot with demand and productivity and it’s creating a Fantasy Football type of workforce.

Suppose for simplicity sake there are five types of employees – A, B, C, D, and F.

F
- Isn't skilled for the job
- Doesn't show up on time
- Doesn't care
D
- Isn't skilled for the job
- Shows up on time
- Training doesn't work
- Tries hard
C
- Skilled for the job
- Doesn't do anything beyond what is asked
- Performance is adequate
- Must be trained for every part of the job
B
- Skilled for the job
- Performance is good
- Quickly learns new aspects of the job
A
- Skilled for the job
- Performance is excellent
- Quickly learns new aspects of the job
- Can proactively expand the scope of the role
- Able to streamline or automate aspects of the job

Normally a big company, and for shorter durations, a smaller one too, will tolerate D employees in the hopes that they can become at least a C employee. But when the economy is tough F, D, and many C employees are let go. The business just can’t support them. This is your basic business cycle economy or put another way, aggregate demand for goods and services is down. When people stop buying, revenue suffers and revenue pays the bills like payroll and health care.

But what’s weird is corporate profits hit an all time high in the third quarter of 2010. A staggering $1.66 trillion. Up from $1.61 trillion in the second quarter and $1.30 trillion in the third quarter of 2009. A tremendous growth rate. Well, when you look closer at it, much of the third quarter growth was from the financial industry and the value of those gains tend to be theoretical or only materialize over long horizons.  But either way, profits are out there and cash is sitting on the books of many large companies. So why aren’t they hiring?

The reason is because of demand and the A employees. Demand is just enough to keep the machines running and creating economies of scale opportunities. But demand isn’t too high to hire extra workers (temporary hires are filling the gaps when needed) to pick up the slack. Meanwhile A employees are reviewing how the processes work and identifying inefficiencies. They are re-engineering their companies without causing disruption. Productivity goes up and meets a slowly improving demand level. The cycle continues.

A employees are talented and are getting raises. And just like in Fantasy Football, they are carrying their teams. If the raise isn’t there, they are being cherry picked by other companies.

This somewhat sounds like a structural economy issue as well. The demand is there, but the skills for the D, C, and B employees aren’t. This is an effect of globalization. The demand is there, but it’s being met not in the US, but in countries like India and China – manufacturing jobs particularly.  This doesn’t spell doom for D, C, and B employees because the scales tend to even out. The rising tide (cheap labor isn’t so cheap) in countries like China will make companies look again at the US, but while that is happening, education – learning how to problem solve – needs to take priority. Otherwise, their skills won’t be differentiated from other workers and other countries. We need more A employees.

This isn’t about labor anymore. It’s about talent. Elite performers get picked and others just fill out the roster or so the story goes.

Working Thoughts 1/11/2008
Examine Each Job as One of Many Crime Scenes

Working Thoughts 1/11/2009
Different Paths to Owning a Professional Sports Team

Working Thoughts 1/11/2010
Job Creation in the 2000s?

As Time Goes By, Is the Economy Getting Better or Worse?

It’s time to look back two years ago and see what happened. The trough of the unemployment situation started October 2008 and abated some by April 2009. The losses in those months were historic: -554,000, -728,000, -673,000, -779,000, -726,000, -753,000, and -528,000. A normal really bad month is -250,000. These numbers were 3 times that. All told some 4,741,000 jobs were lost during this time period and remember, this is just the bottom of the trough.

As time passes employment seems to be improving. Just today a key benchmark was surpassed: the weekly jobless claims fell below 400,000 for the first time in two years. These are people filing for unemployment benefits for the first time.

Two years is 104 weeks and unemployment benefits last, at their longest, 99 weeks. It’s estimated that 3,500,000 people are no longer eligible. This social safety net, weak as it is, is gone for an additional 1.13% of the US population. There are two questions now. First, have, or will, these individuals acquire skills that are needed in the marketplace? Second, are they geographically trapped (can they move to a location that does need their skills)? Perhaps it’s a new era of the migrant worker. “Make no mistake, moving is living.”

The answers to these questions will have potentially costly effects on the US economy as conditions slowly improve.

Which reminds me of a year ago. I saw and enjoyed a George Clooney movie called Up in the Air. Clooney plays an employee of a company that conducts lay offs for other companies. Although, the movie coincided with a year into the recession (end of 2009) the theme was about layoffs. There were several scenes featuring people who are shocked, heart broken, and terrified about what is next for them. It’s a stomach punch.

A year or so later comes another similar movie called The Company Men. It stars Ben Affleck, Chris Cooper, and Tommy Lee Jones as three men let go from their jobs. The movie is about their emotional fight of being someone who no longer has a work identity. But as Up in the Air was about ending the employment relationship, The Company Men is about redefining it.

November 2010 Jobs Report and Wages

Here are the job market and compensation numbers for November 2010 (based on the job report):


Net gain
of 39,000 jobs in the month

  • Private sector payrolls increased by 50,000
    • Down from 160,000 last month
    • Worst performance in 10 months

  • Analysts expected an overall gain of 150,000
  • September was revised to a loss of 24,000 jobs from an original reading of 95,000 lost and a revised loss of 41,000
  • October was revised to a gain of 172,000 from an original reading of 151,000
  • The revisions for August, September, and October added 145,000 jobs to the economy
  • 6.1
    million people have been jobless for more than 6 months (long term
    unemployed) – virtually unchanged from August, September, and October

    • 41.9% of the unemployed are long term unemployed – inched up from 41.8% last month and 41.7% the month before
  • The main type of hire was for Temporary Help Service (+40,000) and since September of 2009 this employment has improved by 494,000
    • Its normally an indicator of an improving economic cycle, but a year of it indicates uncertain business conditions

  • Job Openings and Labor Turnover Survey (JOLTS), shows that job openings increased by 351,000 in October
  • The total number of job openings in October was 3.4 million, while the total number of unemployed workers was 14.8 million
  • The ratio of unemployed workers to job openings improved to 4.4-to-1 in October

Unemployment rate went up to 9.8%

  • Analysts predicted it would be 9.6%
  • The unemployment rate has been over 9% for 19 months – the longest such streak since the early ’80s
  • The employment to population ratio is 58.2% – relatively unchanged
  • The
    U-6 report, which is a broader group to count (workers who are part
    time but want to be full time and discouraged worker), stayed at 17.0%. This indicates the increase of the unemployment rate to 9.8% is a reflection of more people actively looking for jobs in November (these individuals are only counted if they are actively looking)
  • The unemployment rate for those with a college education is 5.1%
    • Highest in 40 years

  • PMI,
    a measure of manufacturing pace, is 56.6% and the 19th consecutive
    month of readings over 50 percent. Anything above 50% means the
    machines are running
  • Productivity, measured for the quarter, showed tepid growth of 2.3%

Specific Segment Job numbers:

  • Manufacturing lost 13,000 jobs
  • Construction lost 5,000 jobs
  • Retailers lost 28,100 jobs
  • Leisure and Hospitality Services gained 11,000 jobs
  • Government sector lost 11,000, Federal gained 2,000
  • Education and Health Services grew by 30,000 jobs
    • Health Care and Social Assistance grew by 34,000

  • Professional and Business Services grew by 53,000
    • 39.500 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $642.87 – a decrease of $1.91
  • The average hourly earning (seasonally adjusted) is $19.19
  • Average
    weekly hours and overtime of production and nonsupervisory employees on
    private nonfarm payrolls by industry sector, seasonally adjusted is
    33.5 hours

Bureau of Labor Statistics

Job Report Stats Summary

Private Sector Jobs: A Lagging Indicator Showing 10 Months of Improvement

The last Jobs Report was all-in-all a very positive report. The numbers that came in blew away expectations and the revisions for the past two months also significantly improved those figures. Here is a chart showing the last 22 months. We have a long way to go, but growth, slow as it is, is ahead. If I’m the head of HR, I’m gearing up for a competitive 2011 – jobs are a lagging indicator for the economy.

Notes on the chart:

  • Beginning in November of 2009, two years after the recession began, the jobs report starts to smooth out
  • The Government numbers in 2010 are a roller coaster due to the temporary nature of census work (once a decade)
  • Private sector hiring has slowly improved throughout the year (2010)
  • The 2009 figures are historically bad. The normal top and low range for jobs is between a gain of 250,000 and a loss of 250,000.

Working Thoughts 11/10/08
Cultivating a Business Network

Working Thoughts 11/10/09
Unemployment Graphs and Charts – October 2009

October 2010 Jobs Report and Wages

Here are the job market and compensation numbers for October 2010 (based on the job report):


Net gain
of 151,000 jobs in the month

  • Census work, which elevated the jobs report in the spring and then weighed it down over the summer is no longer a factor
  • Private sector payrolls increased by 159,000
    • Four straight months of private payroll gains surpassing 100,000. Hasn’t happened since October 2005 – April 2006

  • Analysts expected an overall gain of 60,000
  • August was revised to a loss of 1,000 from an original reading of a loss of 54,000 and a revision of 57,000 last month
  • September was revised to a loss of 41,000 jobs from an original reading of 95,000 lost jobs
  • The revisions for August and September alone add 110,000 jobs to the economy
  • 6.1 million people have been jobless for more than 6 months (long term unemployed) – virtually unchanged from September and August

    • 41.8% of the unemployed are long term unemployed – inched up from 41.7% last month
  • Businesses (private sector) have now added 1.1 million jobs since the start of 2010, after cutting 8.5 million in 2008 and 2009 combined
    • 1% Gain over the last 12 month. The first time this has happened since mid 2007, prior to the recession

  • Government has lost 253,000 jobs

Unemployment rate stayed at 9.6%

  • Analysts predicted it would be 9.6%
  • The employment to population ratio is 58.3% – down from 58.5%
  • The U-6 report, which is a broader group to count (workers who are part time but want to be full time and discouraged worker), decreased slightly to 17.0% from 17.1%. This is still really high
  • PMI, a measure of manufacturing pace, is 56.9% and the 18th consecutive month of readings over 50 percent. Anything above 50% means the machines are running
    • There are now 0.8% more manufacturing jobs than there were a year ago. Manufacturing has been a slow decline for a decade

  • Productivity, measured for the quarter, showed tepid growth of 1.9%

Specific Segment Job numbers:

  • Manufacturing lost 7,000 jobs
  • Construction gained 5,000 jobs
  • Retailers added 27,900 jobs
  • Leisure and Hospitality Services lost 5,000 jobs
  • Government sector lost 8,000, Federal losses were 1,000
  • Education and Health Services grew by 53,000 jobs
    • Health Care and Social Assistance grew by 34,000

  • Professional and Business Services grew by 46,000
    • 34.900 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $644.11 – an increase of $4.26!
  • The average hourly earning (seasonally adjusted) is $19.17 – an increase of 7 cents
  • Average weekly hours and overtime of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted is 33.6 hours

Bureau of Labor Statistics

Job Report Stats Summary