INTRODUCTION

Each month, the Bureau of Labor Statistics (BLS) releases data from the monthly "Household Survey" conducted by the Bureau of the Census, providing a comprehensive body of information on the employment and unemployment experience of the U.S. population, classified by age, sex, race, and a variety of other characteristics.

The BLS also conducts the Current Employment Statistics (CES) program, surveying about 150,000 businesses and government agencies, representing approximately 390,000 individual work sites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls.

The BLS compiles information from these sources and announces the monthly "Employment Situation," reporting the current U.S. employment and unemployment data estimates. The monthly announcement reports employment data from the previous full month.

This lesson is about the March 5, 2010, BLS announcement, "Employment Situation: February 2010."  This lesson will also look at regional employment and unemployment trends, similarities, and differences.

TASK

  • Review the most recently reported U.S. employment and unemployment data.
  • Determine the changes in U.S. employment and unemployment from the past month and year.
  • Determine the factors that have influenced the change in the U.S. unemployment rate.
  • Explain the implications of the employment and unemployment data for individuals, population groups, and the U.S. economy.

PROCESS

The March 5, 2010, BLS announcement of the U.S. unemployment rate in February 2010 was “inconclusive” at best. It was not as bad as many expected, but it was not good news. There were 36,000 more job losses, but that was not enough to increase the unemployment rate. Bad weather across much of the nation in February may have skewed the numbers. All-in-all, it didn’t give us much information to decide if the health of the economy is improving or getting worse.

 U.S. Bureau of Labor Statistics News Release “The Employment Situation – February 2010”

Released March 5, 2010 

“Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while temporary help services added jobs. Severe winter weather in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures.”

Unemployment - Household Survey Data 

"In February, the number of unemployed persons, at 14.9 million, was essentially unchanged, and the unemployment rate remained at 9.7 percent. Among the major worker groups, the unemployment rates for adult men (10.0 percent), adult women (8.0 percent), whites (8.8 percent), blacks (15.8 percent), Hispanics (12.4 percent), and teenagers (25.0 percent) showed little to no change in February. The jobless rate for Asians was 8.4 percent, not seasonally adjusted."

  • Is it good news that things did not get much worse? 

Employment for every demographic group seemed to remain the same.  No group's unemployment rate changed much better or worse than others.  One trend continued.  Unemployment for minority groups (except Asians.) was significanly greater than for whites.  Women faired better than men.

  • What factors do you think account for the differences among groups?

"The number of long-term unemployed (those jobless for 27 weeks and over) was 6.1 million in February and has been about that level since December. About 4 in 10 unemployed persons have been unemployed for 27 weeks or more. In February, the civilian labor force participation rate (64.8 percent) and the employment-population ratio (58.5 percent) were little changed."

Again, little change in the number of long-term unemployed, or labor marker participation.  One change was in the number of people working part-time (not by choice).  At least they are working. 

  • Is that good or bad news?

"The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased from 8.3 to 8.8 million in February, partially offsetting a large decrease in the prior month. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job."

"About 2.5 million persons were marginally attached to the labor force in February, an increase of 476,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey."

"Among the marginally attached, there were 1.2 million discouraged workers in February, up by 473,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities."

The year-over-year increase in the number of marginally attached and discouraged workers continued. Many people have simply given up on finding employment.  Clearly, few will choose to enter a labor market when they see little hope of finding a job. 

  • Should discouraged workers be counted as unemployed?  
  • Are we undercounting the size of the real labor force? 

Figure 1, below, shows the recent history of the U.S. unemployment rate.

Unemployment Figure 1

 

 

Payroll Employment - Establishment Survey Data

"Total nonfarm payroll employment was little changed in February (-36,000). Job losses continued in construction and information, while employment continued to increase in temporary help services. Since the start of the recession in December 2007, payroll employment has fallen by 8.4 million."

The BLS detailed the employment numbers by industry.

"Construction employment fell by 64,000 in February, about in line with the average monthly job loss over the prior 6 months. Job losses were concentrated in nonresidential building (-10,000) and among nonresidential specialty trade contractors (-35,000). Since December 2007, employment in construction has fallen by 1.9 million."

"Employment in the information industry dropped by 18,000 in February. Since December 2007, job losses in information have totaled 297,000. In February, employment in transportation and warehousing continued to trend down."

"Employment in manufacturing was essentially unchanged in February. Small job gains in a number of component industries were offset by job losses in motor vehicles and parts and in chemicals."

"Retail trade employment was unchanged in February, after a sizeable increase in January. Over the month, job gains in building material and garden supply stores (7,000) and in department stores (6,000) were offset by declines in food and beverage stores (-9,000)."

"In February, temporary help services added 48,000 jobs. Since reaching a low point in September 2009, temporary help services employment has risen by 284,000. Health care employment continued to trend upward in February."

"In February, employment in the federal government edged up. The hiring of 15,000 temporary workers for Census 2010 was partially offset by a decline in U.S. Postal Service employment."  

  • Is the increase in "temporary help services" an indicator that firms want to increase output, but are uncertain about committing to new full-time employees?    
  • What do you s have to say about these industry employment trends? 
  • Is one of these industries dominant in your area? Has it hurt your area more or less than the average?

 
Average Workweek

"The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 33.8 hours in February. The manufacturing workweek for all employees dropped by 0.4 hour to 39.5 hours, and factory overtime decreased by 0.2 hour over the month. In February, the average workweek for production or nonsupervisory employees on private nonfarm payrolls fell by 0.2 hour to 33.1 hours; the workweek fell by 1.0 hour in construction, likely reflecting the unusually severe winter storms."

"In February, average hourly earnings of all employees on private nonfarm payrolls increased by 3 cents, or 0.1 percent, to $22.46. Over the past 12 months, average hourly earnings have risen by 1.9 percent. In February, average hourly earnings of private production and nonsupervisory employees rose by 3 cents, or 0.2 percent, to $18.93."

On average, people were working slightly less in February, but their hourly wage increased. 

  • Is the standard of living gap between the employed and the unemployed widening?

 
Monthly Data Revisions

"The change in total nonfarm payroll employment for December was revised from -150,000 to -109,000, and the change for January was revised from -20,000 to -26,000."   After the revisions (based on more accurate or current data), the estimated total number of job losses during the recession decreased by 35,000. 

The BLS Commented on the Effect of the Severe Winter Storms on the Employment Estimates

The BLS commented on the impact of the winter storms in February.  "Major winter storms affected parts of the country during the February reference periods for the establishment and household surveys. In the establishment survey, the reference period was the pay period including February 12th".

"In order for severe weather conditions to reduce the estimate of payroll employment, employees have to be off work for an entire pay period and not be paid for the time missed. About half of all workers in the payroll survey have a 2-week, semimonthly, or monthly pay period. Workers who received pay for any part of the reference pay period, even one hour, are counted in the February payroll employment figures. While some persons may have been off payrolls during the survey reference period, some industries, such as those dealing with cleanup and repair activities, may have added workers."

"In the household survey, the reference period was the calendar week of February 7-13. People who miss work for weather-related events are counted as employed whether or not they are paid for the time off."

  • How did the February weather impact your area?    
  • Do you know people who lost some income during the winter storms?

Regional and State Employment and Unemployment – January 2010

“Thirty states and the District of Columbia recorded over-the-month unemployment rate increases (in January), 9 states registered rate decreases, and 11 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia. The national unemployment rate fell from 10.0 percent in December to 9.7 percent in January, but was up from 7.7 percent a year earlier.”

“In January, nonfarm payroll employment increased in 31 states and the District of Columbia, decreased in 18 states, and remained unchanged in 1 state. The largest over-the-month increase in employment occurred in California (+32,500), followed by Illinois (+26,000), New York (+25,500), Washington (+18,900), and Minnesota (+15,600). The District of Columbia experienced the largest over-the-month percentage increase in employment (+1.0 percent), followed by Alaska (+0.9 percent), Washington (+0.7 percent), Minnesota and Utah (+0.6 percent each), and Illinois (+0.5 percent).”

“The largest over-the-month decreases in employment occurred in Missouri and Ohio (-12,800 each), followed by Kentucky (-11,800), New Jersey (-9,100), Florida (-6,100), and Nevada (-5,700). Kentucky (-0.7 percent) experienced the largest over-the-month percentage decrease in employment, followed by Missouri and Nevada (-0.5 percent each), and Alabama, Kansas, Mississippi, and Ohio (-0.3 percent each). Over the year, nonfarm employment decreased in 48 states and increased in 2 states and the District of Columbia. The largest over-the-year percentage decreases occurred in Nevada (-6.9 percent), Arizona (-5.4 percent), Wyoming (-5.0 percent), and California (-4.8 percent)."

  • What do you think accounts for the differences in employment trends among the states?
  • Nevada, Arizona and California were among the worse states for job losses?   What do yu think they have in common?  

    Hint: How fast did they grow prior to the recession?

Regional Unemployment

“Among the nine geographic divisions, the Pacific continued to report the highest jobless rate, 11.7 percent in January. The East North Central recorded the next highest rate, 11.3 percent. The West North Central registered the lowest January jobless rate, 7.2 percent, followed by the West South Central, 8.0 percent.”

“Four divisions experienced statistically significant unemployment rate increases from a month earlier, the largest of which were in New England and the South Atlantic (+0.2 percentage point each). All nine divisions reported significant over-the-year rate increases of at least 0.8 percentage point. The largest of these occurred in the East North Central and Pacific (+2.4 percentage points each).”

  • Where does your region fit into the national trend?

U.S. Unemployment Rates (%) by Region
Dec. 2009 and Jan. 2010   
                                                                                   

  Dec.
2009
Jan.
2010
Northeast 9.0 9.1
     New England 8.9 9.1
     Middle Atlantic 9.1 9.1
South 9.5 9.7
     South Atlantic 10.1 10.3
     East South Central 10.7 10.8
     West South Central 7.9 8.0
Midwest 9.9 10.0
      East North Central 11.2 11.3
      West North Central 7.3 7.2
West 10.6 10.8
      Mountain 8.6 8.7
      Pacific 11.6 11.7

                  

The States (including the District of Columbia) that compose the various census divisions are:

New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont

Middle Atlantic: New Jersey, New York, and Pennsylvania

South Atlantic: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina,

                         South Carolina, Virginia, and West Virginia

East South Central: Alabama, Kentucky, Mississippi, and Tennessee

West South Central: Arkansas, Louisiana, Oklahoma, and Texas

East North Central: Illinois, Indiana, Michigan, Ohio, and Wisconsin

West North Central: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota

Mountain: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming

Pacific: Alaska, California, Hawaii, Oregon, and Washington.

State Unemployment

“Michigan again recorded the highest unemployment rate among the states, 14.3 percent in January. The states with the next highest rates were Nevada, 13.0 percent; Rhode Island, 12.7 percent; South Carolina, 12.6 percent; and California, 12.5 percent.”

“North Dakota continued to register the lowest jobless rate, 4.2 percent in January, followed by Nebraska and South Dakota, 4.6 and 4.8 percent, respectively.”

“In total, 25 states posted jobless rates significantly lower than the U.S. figure of 9.7 percent, 11 states and the District of Columbia had measurably higher rates, and 14 states had rates that were not appreciably different from that of the nation." Link to BLS Regional and State Unemployment Release for January 2010 , see Table 3.

“Six states reported statistically significant over-the-month unemployment rate increases in January. New Mexico experienced the largest of these (+0.3 percentage point), followed by California, Florida, Idaho, and Utah (+0.2 point each) and Maryland (+0.1 point). The remaining 44 states and the District of Columbia registered jobless rates that were not appreciably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes.”

"West Virginia and Nevada recorded the largest jobless rate increases from January 2009 (+3.5 and +3.4 percentage points, respectively). Six other states reported rate increases of 3.0 percentage points or more: Florida, Illinois, and Wyoming (+3.2 points each), Rhode Island (+3.1 points), and Alabama and Michigan (+3.0 points each). The District of Columbia also registered a large over-the-year unemployment rate increase (+3.6 percentage points). Thirty-five additional states had smaller, but also statistically significant, rate increases. The remaining seven states reported jobless rates that were not appreciably different from those of a year earlier.”

  • Is your state doing better or worse than the average? 
  • What factors may strongly influence your state’s unemployment rate?

Nonfarm Payroll Employment (Seasonally Adjusted)

"Between December 2009 and January 2010, 11 states experienced statistically significant changes in employment, 9 of which were increases. The largest statistically significant job gains occurred in California (+32,500), Illinois (+26,000), and New York (+25,500). Statistically significant decreases in employment occurred in Missouri (-12,800) and Kentucky (-11,800)." 

"Over the year, 48 states experienced statistically significant changes in employment, all of which were decreases. The largest statistically significant job losses occurred in California (-701,700), Florida (-303,200), Texas (-287,800), Ohio (-222,000), and Illinois (-219,700). The smallest statistically significant decreases in employment occurred in Vermont (-4,500), South Dakota (-8,100), and New Hampshire (-8,700)."

Regional and State Employment and Unemployment Tables 

Table 1. Civilian labor force and unemployment by census region and division, seasonally adjusted

Table 2. Civilian labor force and unemployment by census region and division, not seasonally adjusted

Table 3. Civilian labor force and unemployment by state and selected area, seasonally adjusted

Table 4. Civilian labor force and unemployment by state and selected area, not seasonally adjusted

Table 5. Employees on nonfarm payrolls by state and selected industry sector, seasonally adjusted

Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted

HTML version of the BLS Employment news release

Regional and State Employment and Unemployment Technical Note


The BLS added a section to the report, answering some "Frequently Asked Questions about Employment and Unemployment Estimates."

Why are there two monthly measures of employment?

"The household survey and establishment survey both produce sample-based estimates of employment and both have strengths and limitations. The establishment survey employment series has a smaller margin of error on the measurement of month-to-month change than the household survey because of its much larger sample size. An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 400,000. However, the household survey has a more expansive scope than the establishment survey because it includes the self-employed, unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey. The household survey also provides estimates of employment for demographic groups."

Are undocumented immigrants counted in the surveys?

"It is likely that both surveys include at least some undocumented immigrants. However, neither the establishment nor the household survey is designed to identify the legal status of workers. Therefore, it is not possible to determine how many are counted in either survey. The establishment survey does not collect data on the legal status of workers. The household survey does include questions which identify the foreign and native born, but it does not include questions about the legal status of the foreign born."

Why does the establishment survey have revisions?

"The establishment survey revises published estimates to improve its data series by incorporating additional information that was not available at the time of the initial publication of the estimates. The establishment survey revises its initial monthly estimates twice, in the immediately succeeding 2 months, to incorporate additional sample receipts from respondents in the survey and recalculated seasonal adjustment factors. Please visit this site for more information on the monthly CES Employment Revisions ."

"On an annual basis, the establishment survey incorporates a benchmark revision that re-anchors estimates to nearly complete employment counts available from unemployment insurance tax records. The benchmark helps to control for sampling and modeling errors in the estimates. Visit this site for more information on the annual Benchmark Revisions ."

Does the establishment survey sample include small firms?

"Yes; about 40 percent of the establishment survey sample is comprised of business establishments with fewer than 20 employees. The establishment survey sample is designed to maximize the reliability of the total nonfarm employment estimate; firms from all size classes and industries are appropriately sampled to achieve that goal."

Does the establishment survey account for employment from new businesses?

"Yes; monthly establishment survey estimates include an adjustment to account for the net employment change generated by business births and deaths. The adjustment comes from an econometric model that forecasts the monthly net jobs impact of business births and deaths based on the actual past values of the net impact that can be observed with a lag from the Quarterly Census of Employment and Wages."

"The establishment survey uses modeling rather than sampling for this purpose because the survey is not immediately able to bring new businesses into the sample. There is an unavoidable lag between the birth of a new firm and its appearance on the sampling frame and availability for selection. BLS adds new businesses to the survey twice a year."

Is the count of unemployed persons limited to just those people receiving unemployment insurance benefits?

"No; the estimate of unemployment is based on a monthly sample survey of households. All persons who are without jobs and are actively seeking and available to work are included among the unemployed. (People on temporary layoff are included even if they do not actively seek work.) There is no requirement or question relating to unemployment insurance benefits in the monthly survey."

Does the official unemployment rate exclude people who have stopped looking for work?

"Yes; however, there are separate estimates of persons outside the labor force who want a job, including those who have stopped looking because they believe no jobs are available (discouraged workers). In addition, alternative measures of labor underutilization (discouraged workers and other groups not officially counted as unemployed) are published each month in The Employment Situation news release."

CONCLUSION

Again, the March 5, 2010, BLS employment report did not reveal much change in the economy - good or bad..

“Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent..." "Employment fell in construction and information, while temporary help services added jobs."  "In February, the number of unemployed persons, at 14.9 million, was essentially unchanged, and the unemployment rate remained at 9.7 percent."

Does no more bad news mean good news is coming?

Traditionally, employment and unemployment are seen as a lagging indicators.  The real GDP estimate for the fourth quarter of 3009 showed growth at a 5.9 percent annual rate.  This was a significant reversal from the GDP losses in much of 2009.

The nagging question is whether or not this will be a "jobless recovery" driven more by technology and productivity improvements.  If it is, and we have growth without replacing the lost jobs, there may be structural changes in employment. What began as "cyclical" unemployment in this downturn may actually be "structural" and more long term.

ASSESSMENT ACTIVITY

Next, answer the essay questions below on the interactive notepad.

 

  1. What do you think accounts for differences in the unemployment rates between states and regions?
     
  2. What does the trend in the unemployment rate tell you about the health of the economy?

EXTENSION ACTIVITY

The BLS regularly releases employment and unemployment data on metropolitan areas, states and regions. This data is not quite as current as the national data that is released monthly – given the extra time required to interpret more localized data. 

On March 10, 2010, the BLS released the newest data on “Regional and State Employment and Unemployment for January 2010 .” 

“Thirty states and the District of Columbia recorded over-the-month unemployment rate increases, 9 states registered rate decreases, and 11 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia. The national unemployment rate fell from 10.0 percent in December to 9.7 percent in January, but was up from 7.7 percent a year earlier."

"In January, nonfarm payroll employment increased in 31 states and the District of Columbia, decreased in 18 states, and remained unchanged in 1 state."

On February 2, 2010, the BLS released data on “Metropolitan Area Employment and Unemployment .”

"Unemployment rates were higher in December than a year earlier in 371 of the 372 metropolitan areas and lower in 1 area, the U.S. Bureau of Labor Statistics reported today. Nineteen areas recorded jobless rates of at least 15.0 percent, while 10 areas registered rates below 5.0 percent. The national unemployment rate in December was 9.7 percent, not seasonally adjusted, up from 7.1 percent a year earlier. Among the 369 metropolitan areas for which nonfarm payroll employment were available, 356 areas reported over-the-year decreases in employment, 12 reported increases, and 1 remained unchanged.

Take a guess.  What metropolitan area had an increase in employment in the last year? 

You can find it in the report on metropolitan areas.

Read the two BLS announcements. 

  1. How does your state compare to the national average and surrounding states?
  2. Are there regional patterns of unemployment in your area that are higher and lower than the national average?
  3. Which five states had the highest unemployment rates last reported month?  Lowest?
  4. Did the unemployment rate decrease in any states last reported month?
  5. Why do you think your region or state differs from other regions or states, or the national employment and unemployment trends?