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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 November 2, 2012, BLS announcement, "Employment Situation: October, 2012."  This lesson will also look at regional data and industry trends.

• 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

According to the Bureau of Labor Statistics, the U.S. economy added  171, 000 jobs in October, 2012. Despite the total non-farm employment increase in October and upward revisions to the August and September employment estimates, the U.S. unemployment rate edged up to 7.9 percent, after falling 0.3 percentage points to 7.8 percent in September.

Take a look at the basic labor market data for August through October, 2012, in Figure 1. Why did the number of jobs increase and the unemployment rate also increased?  If more people were working in October, shouldn't the unemployment rate have gone down?

Remember, the “unemployment rate” is determined by a simple formula.  It is the percentage of the labor force that is unemployed.  The “employment rate” is the simply the opposite, the percentage of the labor force that is employed, according to the Bureau of Labor Statistics’ definition of “employed.”

Note: The November 2, 2012, BLS announcement added a comment about the impact of Hurricane Sandy. "Hurricane Sandy had no discernable effect on the employment and unemployment data for October. Household survey data collection was completed before the storm, and establishment survey data collection rates were within normal ranges nationally and for the affected areas. For information on how unusually severe weather can affect the employment and hours estimates, see the Frequently Asked Questions section of this release."

Note: Unless otherwise cited, all quoted sections in this lesson are from the BLS November 2, 2013 "Employment Situation - October 2013" press release.

Students: Make sure you can do the math of determining the unemployment rate.  The number of unemployed persons divided by the number of people in the labor force.

The Employment Situation – October 2012
U.S. Bureau of Labor Statistics
Released: November 2, 2012

"Total nonfarm payroll employment increased by 171,000 in October, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, health care, and retail trade"

The U.S. unemployment rate has gradually decreased from a recent high of 10.0 percent in October 2009 to the current 7.9 percent.

Figure 2, below, shows the monthly U.S. unemployment rates from 1990 to the present.  Note the highest recent rate in October, 2009.

Total U.S. employment has increased from a low of 137,968,000 in December, 2009, to the current level of 143,384,000.  In that period of time, the U.S. economy has created almost 5 1/2 million jobs.

The number of U.S. unemployed persons has decreased from a recent high of 15,421,000 in October 2009 to the current level of 12,258,000. In this period, almost 3.31 million fewer workers are unemployed.

How do these numbers add up to the unemployment rates during this time?  A key factor in the determination of the unemployment rate is the size of the labor force.  See Figure 1, above, for the key labor market data

Recovery from the 2008-2009 recession seem to be erratic, both in employment growth and real GDP growth. Most of the recent recessions, although not as deep and long,  have been followed by much faster recoveries.  Again, look at Figure 2.  Note the “cycles” of increases, highs, decreases, and low rates.  These are generally consistent with the business cycles identified by the National Bureau of Economic Research (NBER). Link to NBER business cycle information: www.nber.org/cycles/general_statement.html

Students: Take a good look at the business cycle model.  Do you see the "cycle.?

Students can you interpret the business cycle model to identify:

• Periods of the recession since 1990.
• The recessionary phase of the business cycles.
• Relationship of the business cycle to employment trends. (See Figure 2.)
• How does the 2008 to 2009 recession compare to the other recent recessions?

The October, 2012, employment data showed some improvement from recent months  The consensus estimate is that the economy must create about 125,000 to 150,000 jobs each month just to keep up with population and natural labor force growth.  Take another look at the recent employment data (Figures 1 and 2).

Students: Have really we grown out of the recession?

Household Survey Data - Unemployment

The number of unemployed persons in October, 2012, was 12.258 million people, up 170,000 from September, but down almost 500,000 from October, 2011. The unemployment rate in , October increased 0.1 percent, with 369,000 fewer people "not in the labor force."

The BLS now collects more data on part-time employees who would like to work full-time, marginally attached workers, and discouraged workers.  These workers may represent “hidden unemployment.”   To be technically counted as unemployed, you have to be actively looking for work.  If you have given-up, you are no longer “unemployed.”

Some more good news!  In October, 2012, the number of people working part-time for due to "slack work or business conditions" decreased by 304,000. The number of discouraged worker increased slightly in October, but was down about 150,000 since October 2011.

Students:  Should those who can’t find jobs suited to their skills, those who are involuntarily working part-time, or those who have given-up trying to find a job be counted as unemployed?

U.S. Unemployment is Not Distributed Equally

Among the major demographic groups, the unemployment rates in October, 2012, and changes from September to October were:

Group                             October 2012        One month change

 All adults 7.9% + 0.1 Adult men 7.3% 0 Adult women 7.2% + 0.2 Teenagers 23.7% 0 Whites 7.0% 0 Blacks 14.3% + 0.9 Hispanics 10.0% + 0.1% Asians 4.9% - 0.1%

Note: See Tables A-1, A-2, and A-3 of the BLS report for details of the employment data. www.bls.gov/news.release/archives/empsit_11022012.htm

Students: Why are there such differences between the demographic groups?   Almost 24 percent of teenagers (age 16-19) are unemployed and looking for jobs.  What impact might this have on the society and the teenagers?  Why are there such differences between ethic and racial groups?

Take a look at the unemployment rates for people with different levels of education in October, 2012.  Do you see a pattern?

 Less than a high school diploma 12.2% unemployed High school graduate 8.4% unemployed Some college, no diploma 6.9% unemployed College graduates 3.8% unemployed

For more information about unemployment rates and income for groups by educational attainment, go to this BLS website: Education Pays .

Establishment Survey Data – Employment

The March 9 BLS report added a comment about the industry groups that grew in October, 2012, “Total nonfarm payroll employment increased by 171,000 in October. Employment growth has averaged 157,000 per month thus far in 2012, about the same as the average monthly gain of 153,000 in 2011. In October, employment rose in professional and business services, health care, and retail trade."

Take a look at the job picture in various industries in Figure 4.  (www.bls.gov/news.release/archives/empsit_11022012.htm , Table 2)  How do you characterize the October, 2012, employment data by industry group?

• What industries are growing?
• What industries are not growing or shrinking?
• Are there patterns?

Students:  Do these patterns makes sense to them.  What – if any – are the patterns?

Regional and State Employment and Unemployment – October 2012

The BLS also collects and releases data on employment and unemployment in the several geographic regions of the nation, the states, and metropolitan areas. The most recent news release on state and regional unemployment data was on October 19, 2012 for September, 2012.

“Regional and state unemployment rates were generally lower in September. Forty-one states and the District of Columbia recorded unemployment rate decreases, six states posted rate increases, and three states had no change, the U.S. Bureau of Labor Statistics reported today. Forty-four states and the District of Columbia registered unemployment rate decreases from a year earlier, while six states experienced increases.”

"In September 2012, nonfarm payroll employment increased in 35 states and the District of Columbia and decreased in 15 states. The largest over-the-month increase in employment occurred in Texas (+21,000), followed by Pennsylvania (+17,800) and the District of Columbia (+14,200). The largest over-the-month decrease in employment occurred in Michigan (-13,000), followed by Ohio (-12,800) and Oregon (-7,900)."

"The District of Columbia experienced the largest over-the-month percentage increase in employment (+2.0 percent), followed by Maine (+0.9 percent) and South Carolina (+0.7 percent). Oregon and Wyoming experienced the largest over-the-month percentage declines in employment(-0.5 percent each), followed by West Virginia (-0.4 percent)."

Students: Take a look at the data for your region or state.   How is your area's employment and unemployment situation similar of different from other regions?

Metropolitan Areas Employment and Unemployment

The most recent BLS announcement of the employment and unemployment data for the nation's metropolitan areas was released October 30, 2012.

"Unemployment rates were lower in September than a year earlier in 345 of the 372 metropolitan areas, higher in 22 areas, and unchanged in 5 areas, the U.S. Bureau of Labor Statistics reported today. Two areas recorded jobless rates of at least 15.0 percent, while 41 areas registered rates of less than 5.0 percent. Two hundred sixty-seven metropolitan areas reported over-the-year increases in nonfarm payroll employment, 94 reported decreases, and 11 had no change."

"In September, 267 metropolitan areas reported over-the-year increases in nonfarm payroll employment, 94 reported decreases, and 11 had no change. The largest over-the-year employment increase occurred in New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. (+138,300), followed by Houston-Sugar Land-Baytown, Texas (+96,600), and Los Angeles-Long Beach-Santa Ana, Calif. (+90,400). The largest over-the- year percentage gain in employment was reported in Lafayette, La. (+8.7 percent), followed by Columbus, Ind. (+8.6 percent), and Elkhart- Goshen, Ind. (+8.0 percent)."

Students: If your school is in a metropolitan area, compare your area to other metropolitan areas in your region.

Students: Do you see any unemployment or employment growth patterns around the country?  Can you explain why some cities are very high or very low?

CONCLUSION

The U.S. economy added 171,000 jobs in October, 2012, but the unemployment rate actually increased by 0.1 percent - primarily a result of rounding the reported number to the nearest tenth.  Most industry groups gained jobs, but over 12 million people in the U.S. remained unemployed.

What does this mean to you?  Good news or bad?

So far in 2012, the U.S. economy had added almost 1.5 million jobs, but the unemployment rate has dropped by less than 1/2 of a percentage point.  The number of unemployed has dropped by only 500,000 since the beginning of 2012.

Interpreting employment and unemployment data in a meaningful way is difficult because of the number of variables in the equation.  Remember, the population and labor force continue to grow, and people move in and out of the labor force.  There are still over 12 million discouraged workers in the United States.

Keep an eye on the employment data report for November and December to see how the economy fairs by the end of this year.

EXTENSION ACTIVITY

The last sections of the Employment and Unemployment lesson provide highlights of the state, region, and metropolitan area employment and unemployment data.

This data may not be quite as current as the national data that is released the first Friday of each month.  It takes a little longer to organize the localized data.

Read the two BLS announcements: www.bls.gov/news.release/metro.nr0.htm

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

To see the current unemployment rates and recent unemployment rate histories for each state, go to:  URL: www.bls.gov/lau/    Do you see and patterns among the states?