Economic Notes: Employment, Income and Outlook
3/06/2009
The Bureau of Labor Statistics (BLS) was widely expected to report continued weakening in the U.S. labor market. It exceeded expectations.
In addition to reporting an employment drop of 651,000 jobs between January and February (m/m), BLS revised its previous estimates to reflect the loss of another 153,000 jobs in the prior two months. Since the recession began in December 2007, employment in the U.S. is down by 4.4 million jobs (-3.2%).
There’s no better news in the details, so there is no point in reciting them. Only a few sectors avoided the carnage and then only marginally.
With employment diving and the labor force growing, the unemployment rate rose to 8.1% (vs. 4.8% a year ago). The total number of unemployed reached 12.5 million – up 68% from February 2008. By one measure – i.e., including discouraged jobseekers and those involuntarily working part-time – almost 15% of the nation’s workforce is underutilized.
Amid the clouds, the Bureau of Economic Analysis provided a glimmer of light: disposable personal income (i.e., after-tax income) was up in January (+1.5%) for the first time since September 2008. Concurrently, personal consumption expenditures (i.e., consumer spending) rose by 0.4% m/m. These gains were evident in the first reported m/m rise in retail sales since early last summer.
As important as consumer spending is, it is premature to call the bottom of the recession. The Federal Reserve’s Beige Book, which summarizes regional conditions based on interviews with key business and economic experts, reported that “conditions deteriorated further” through late February. And its contacts “rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.” Beige Book Links:
National Summary:
http://www.federalreserve.gov/fomc/beigebook/2009/20090304/default.htm
Boston (New England):
http://www.federalreserve.gov/fomc/beigebook/2009/20090304/1.htm
New York (New York and Northern New Jersey):
http://www.federalreserve.gov/fomc/beigebook/2009/20090304/2.htm
Philadelphia (Southern New Jersey):
http://www.federalreserve.gov/fomc/beigebook/2009/20090304/3.htm
San Francisco (California):
http://www.federalreserve.gov/fomc/beigebook/2009/20090304/12.htm
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