The Jobs Report: Solid Growth, But Does Little to Solve Our Economic Malaise

Today the Bureau of Labor Statistics issued the March jobs report.  It shows continued solid growth:  An increase of 215,000 new jobs.  The unemployment rate stayed at 5.0% as more people worked and more people reentered the labor force.  The labor force participation rate is now at 63%.  

The graph shows the percent of the adult population with jobs according to the household survey.  It shows the economic malaise the country has suffered these last seven years. Robert Bartlett tittled his history of the Reagan period The Seven Fat Years.  These have been the seven lean years.

The employment ratio plunged during the recession and continued to fall after its official end (June, 2009.) Jobs data, revised after the NBER called the trough, show that jobs continued to fall into the first few months of 2010.  Jobs growth failed to keep pace with population growth on into 2011.  We really did not see job growth fast enough to outpace population until 2013.

Wichita's Chief Industry

On a less cheerful note, aircraft employment fell by 900.

Why is Trump Triumphing In His Demographics Sweet Spot? Look at the Data

Two Federal Reserve Bank of St. Louis Economists, Michael McCracken and Joseph McGillicuddy, provide this graph.  It shows the change in employment since the recession trough in June, 2009:

Bottom line: There are even fewer jobs for those without a college degree now than at the bottom of the recession.  Guess who is bearing the brunt of the weakest economic recovery in a century? 

With income inequality on everyone's mind these days, might a key cause be the administration's economic policies that are eviscerating the working class combined with the cultural elites' war on the family?  Or is that heresy?

This Morning's Employment Report

The Bureau of Labor Statistics reported today that unemployment fell to 4.9 percent and wages rose. "In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $25.39. Over the year, average hourly earnings have risen by 2.5 percent."  Jobs rose 151,000 according to the payroll survey and 496,000 according to the household survey. The unemployment drop was dispute a jump in the labor force of 433,000, admittedly amplified by new higher population estimates.   

What does the Jobs Report Mean: James Sherk of the Heritage Foundation

A Dismal Employment Report, But Hope for Wichita

Unemployment Rate Up, Job Growth Nil

The Bureau of Labor Statistics issued its monthly labor report this morning.  The unemployment rate was 9.18%.  It is up for three straight months now.  The establishment survey showed only 18,000 new jobs, a number so small, it is noise.  No sensible statistician would reject the hypothesis that June's job growth was zero. May's strong job growth was even revised downward. 

The Long Slow Slide

Reviewing the data for the last year is even more depressing.  Although the establishment survey shows a growth of over a million jobs since June, 2010, the household survey shows only about a quarter million more working now than then.  That is a big discrepancy and bodes ill for the next big establishment data revision.  More depressing still is the trend in the ratios of jobs to the population.  This statistic is immune from oddities in Washington's population estimates.  The proportion of the population working appeared to have bottomed out in January, 2010 at 58.23, but now hit a new low in June, 2011 at 58.18%.  

The unemployment rate peaked at 10.15% in October 2009.  The bulk of the improvement since then came from a fall in the number looking for work (i.e., a fall in the labor participation rate.)  The economic distortions caused by the credit boom of the middle of the last decade continue to drag on growth.   Housing starts have averaged a little over a half million for more than two and a half years.  Unemployment in construction is at 15.6% despite a slowly shrinking labor force.  Conventional economic stimulus is poorly equipped to cure such distortions.

But Is Aerospace Up!

Amid all this gloom, there is good news for Wichita.  Manufacturing employment is up nationally.  Moreover manufacturing jobs are up about a percent and a half over a year ago.  

Digging under the published numbers in the BLS report, it appears aerospace employment is up by a thousand jobs in June.  This comes after a great Paris air show for commercial aviation.  Over $90 billion in orders were placed for new planes.  This is good news for Spirit.  Even general aviation is showing glimmers of life.

Employment Was Up in March

The Bureau of Labor Statistics (BLS) reported jobs on U.S. payrolls were up 214,000 in March and the unemployment rate fell to 8.8 percent. Particularly encouraging was a 17,000 increase in manufacturing jobs.

And What About the Aircraft Industry?

The BLS did not publish data for the aerospace industry, but it did report that jobs in transportation equipment were up 6,100. If we exclude motor vehicles and part, the rest of the sector (mostly aerospace) was up 2,900 jobs. That is good news for Wichita.

America's unemployment rate dropped from 9.8% to 9.4%.

The Bureau of Labor Statistics released its employment report for December. America's seasonally adjusted unemployment rate dropped from 9.8% to 9.4% in December. Is this proof that the household survey is inherently unreliable or that this is a reversal of trend?

Neither!

The unemployment rate has been following a slow downward trend since the fall of 2009. Now looking at the seasonally unadjusted data, we also see it has been falling for five straight months relative to the same month last year (SPLY in postalese.) This trend has been masked by the seasonal adjustment process (see the previous post.)

No doubt analysts will be disappointed by the small increase in jobs (103,000) reported by the establishment survey. Do not give it too much weight. These data will be revised, perhaps drastically in February, leading also to substantial revisions to the GDP series. This will cause the whole history of the recovery to be rewritten.

The good news is that the establishment data may become a more useful real time cyclical indicator. The BLS announced, "Effective with the release of January 2011 data on February 4, 2011, the establishment survey will begin estimating net business birth/death adjustment factors on a quarterly basis, replacing the current practice of estimating the factors annually. This will allow the establishment survey to incorporate information from the Quarterly Census of Employment and Wages into the birth/death adjustment factors as soon as it becomes available and thereby improve the factors. Additional information on this change is available at www.bls.gov/ces/ces_quarterly_birthdeath.pdf."

And that is very good news. Tracking the next cycle with the jobs data will be more accurate.

On a sour note, the BLS will update the household estimates with new population data in February. Historically the gnomes resident in the Postal Square Building have not been time series friendly in their population updates.

Maybe America's Employment Malaise Is Not as Bad As It Seems

Tomorrow we get to see the December employment data.  It may well show that things are not as gloomy as we have been seeing.    Certainly America's 9.8% unemployment in November was depressing and in that vein, I wrote "A quick survey of the numbers demonstrates that the national economy is mired in a malaise worse than in any previous postwar U.S. recession."

Wall Street has grasped at any number of straws in the wind to convince itself that things are looking up.  Unemployment claims are down, manufacturing purchasing mangers are saying things are up.  Can the stock market's upbeat tea reading be right?  Yes, it can.  

Whatever tomorrow's data show, the employment scene may not be as bad as it now looks.  I am mostly looking at the household survey data.  The last two recessions demonstrate that the establishment data is an unreliable real time guide to cyclical trends.   The survey is badly biased during downturns and perhaps recoveries.  It misestimates the cyclical impact of births and deaths of firms on employment.  

Why might the data paint an overly gloomy picture?  I have come to believe that the seasonal adjustment overcompensates during cyclical swings.  Consider these data:  while the seasonally adjusted unemployment rate is 9.8%, the unadjusted rate for November is 9.3%.  Not surprising.  Retailers hire going into the Christmas season. On a seasonal adjusted basis, retail employment was down from October (establishment data); yet that same survey shows retail employment was up over November, 2009.  Curious.  Moreover, the national seasonally unadjusted unemployment rate (household survey) is down from a year ago for four straight months.

The seasonal adjustment process averages data over thirty years.  It is a blunt instrument for dealing with the massive impact household deleveraging is having on retail sales, the structure of the retail sector, and thus seasonal retail employment.  Indirectly, this affects the estimate of the seasonally adjusted national unemployment rate as well.

Before you break out the champagne,  note my favorite long term cyclical indicator, the employment rate peaked in April.

While I am backtracking on what I said about the national employment picture a little, I stand by my two conclusions on our long term prognosis and Wichita's prospects:

"The fundamental dislocations that led to the recession of 2007 to 2009 have not been addressed." and

"We have three significant strengths on which [to buck the national] trend...: exports, energy and entrepreneurship."

Economic Update: Wichita and the World

1) The world economy is eighteen months into an economic recovery. The U.S. economy lagged six months behind. Employment lagged another six months behind that and Wichita lagged yet further behind.  The most recent news is mixed.  the Commerce Department reported Housing starts were up.  Alan Rappeport writes in the Financial Times that "That was stronger than economists expected and marked the third month running that starts increased."  The Fed reported that September industrial production was down.  Rapeport tells us that "US industrial production fell for the first time in more than a year last month."

2) The U.S. unemployment rate is still at 9.5% reflecting the enormous dislocations caused during the bubble years of 2004-7. The administration's two top economists Larry Summers have retreated to academia.  CNN interviewed Peter Diamond the new Nobel Laureate who seems to see it differently.  He told CNN’s Fareed Zakaria GPS: "The central focus of the problems in the economy right now is not that the labor market is working badly but the demand for labor is way down. ... I view the US economy as extraordinarily adaptive . . . I expect the economy to adapt this time as well."

3) Wichita and Kansas are seeing signs of recovery. Wichita's August unemployment rate at 8.2% is down a percentage point from a year ago. (August is the worst month each year.) For four straight months we have seen an improvement over the year before. A new state study shows job openings up and up relative to the number out of work. The Kansas Department of Labor reported, "There are more job vacancies in Kansas this year than last year, according to the 2010 Job Vacancy Survey. The survey, completed by employers during the second quarter of 2010, found there were an estimated 32,091 job vacancies statewide. This represents a 24.5 percent increase in vacancies from 2009." World trade is vital for Kansas and the world economy is pulling up the Kansas economy.

4) As for the aviation industry, it is a three legged stool: commercial, military, and general aviation. Commercial aviation is reviving. The lessors are back. The other two legs are weak.  Most countries are cutting military spending around the world. General aviation (business jets and private planes) is still in a big slump.

5) The business aviation industry has its big show in Atlanta while we speak. In connection with that, Honeywell's new forecast shows a 10% increase over the next decade, but tough slogging over the next two years. For 2010, Honeywell Aerospace estimates deliveries of 675-700 new business jets, down 16-17 percent from 849 in 2009 mainly due to continued global economic weakness as well as overarching concerns about government debt, austerity programs, export growth, financing costs, and general availability. Rob Wilson, President, Business and General Aviation, Honeywell Aerospace said "The industry should begin another period of expansion by 2012"  Molly Mullins reports on Hawker's new business jet, the 200 and on Cessna's new version of the Citation, the Citation X.

6) Hawker-Beechcraft's two lines of business are military and business jets: not a pretty picture. Kansas has put together a package to keep it from moving to Louisiana, but the union has now rejected the firm's proposed labor contract. This cloud remains over our economic horizon.

Farnborough, Jobs, and Wichita

Wichita's unemployment rate is 8.0 percent.

The national recovery is starting to come to us. Wichita's unemployment rate was 8.0 percent June, down from 9.0 percent in June, 2009. Dan Voorhis reported in this morning's Eagle.   "'Given that it's for June, that's a positive sign for Wichita,'" quoting Mammon Among Friends' own Malcolm Harris, Professor of Finance at Friends University.

Note the data is not seasonally adjusted. The national unemployment rate, which is, fell to 9.5 percent (from 9.7 percent.) The national rate fell as fewer folks were in the June labor force. That was in part because of the seasonal adjustment and in part because those census workers who took the work for a few extra dollars but were not looking for permanent work left the labor force. He also quoted "Jeremy Hill, director of the center for Economic Development and Business Research at Wichita State University, [who] said the bulk of the new jobs has come in the medical sector and professional and business services."

As I told Dan Voorhis, "We're 12 months into a national recovery and some of that is spilling into the local economy." One big area of improvement is the aircraft industry.  New aircraft orders are up for the five months through May according to Commerce Department data.   Although well below the boom years of 2007 and 2008, there is a distinct recovery showing up.  Both Boeing and Airbus have been conservative in their production planning.  Boeing is now slowly stepping up its 737 production, a sign it is growing confident.  Increased production also protects Boeing from potential cannibalization of the 737 market by its and Airbus's new planes.   Spirit Aerospace largely avoided layoffs by using a shortened workweek during the worst of it.  By thus spreading the work around, it conserved its younger workers who are the manufacturer's future.

Which brings us to Farnborough:

The Farnborough International Airshow is this week: 19-25 July 2010. The biennial show was last held at the peak of the boom in aircraft orders.  The 2008 show (pictured on the right) set a record of US$88.7 billion worth of orders announced during the show.  Note planes are priced in dollars not Euros.

Boeing's Dreamliner made a splash. The 787 flew into Farnborough Monday and returned home yesterday.  Gulliver, the Economist's Business Travel commentator blogged, "The Dreamliner is much more than just another incremental upgrade to Boeing’s fleet: its revolutionary lightweight carbon-composite wings and fuselage mean much-improved fuel efficiency (20% better than comparable planes made from aluminium, according to Boeing). This could well persuade airlines to open some direct routes around the globe that they previously deemed uneconomic."

Today's Eagle carries an AP report by Jane Wardell and Emma VanDore that orders have totaled $25 billion.

There is life among the aircraft lessors. Halleluja!

I knew the aircraft industry was in trouble when I learned AIG was Boeing's and Airbus's biggest customer.   AIG required a federal bailout, CIT entered bankruptcy and GE Financial was in trouble (the piggy bank that Jack Walsh built was broken.)  Lessors' share of aircraft orders dropped from 40 percent to 2 percent.

The Financial Times' Pilita Clark reported that "Steven Udvar-Hazy made a notable re-entry into the field.  He is one of the biggest names in aircraft financing who founded and ran ILFC, AIG’s aircraft leasing arm, until his departure earlier this year. He announced a $4bn order for 51 Airbus A320 family aircraft for his new leasing company, Air Lease Corporation."

"That news was swiftly followed by Boeing’s announcement that GE Capital Aviation Services, the aircraft leasing arm of General Electric, was ordering 40 of its best-selling 737 jets valued at around $3bn, according to the manufacturer’s published prices."

The A320s and the 737s are the workhorses of much of commercial aviation and seem to be commodity most easily leased.  Udvar-Hazy largely created the air leasing business with International Lease Finance Corporation (ILFC), now owned by AIG.  When AIG lost its AAA bond rating, ILFC got shut out of the commercial paper market and was hard pressed to buy new planes.  Udvar-Hazy's solution?  He left ILFC and started a new company and now he has ordered 40 Boeing 737-800s.  That should be good news for Spirit Aerospace here in Wichita which makes fuselages for 737s.

Is the market developing according to Boeing's view of the world or Airbus's?

The first step to understanding an industry and a company's business model is asking who the customers are. On the commercial side, Airbus and Boeing (and Bombardier and Embraer) sell to commercial airlines and air freight companies. The customers' business models will drive the demand for their planes. As the busiest airports get more and more congested, the airlines will either have to fly bigger planes with more seats into those hubs or fly longer point-to-point routes to relieve pressure on the hubs. Airbus in the A380 bet on the former, while Boeing in the 787 bet on the latter.

Pilita Clark reported from Farnborough Monday that "Emirates, the Dubai-based airline, on Monday announced a $9bn order for 30 Boeing 777 passenger jets, making it the biggest deal so far at the show."

This follows the the Berlin airshow where she reported on June 8th that "the Dubai-based airline, placed one of the largest civil aircraft orders in history on Tuesday when it said it would buy 32 A380 superjumbo passenger jets from Airbus in a deal worth $11.5bn."  That Airbus claimed was the biggest commercial aircraft order by dollar value ever.

At the time the FT's Clark further reported, "Emirates already had 58 A380s on order, with Tuesday’s announcement taking that number to 90, firmly cementing its position as the largest operator of the superjumbo.


"The deal is a big boost for Airbus, which now has 234 orders from 17 buyers. The programme is far from making a profit, however, after it was affected by numerous delays and cost overruns.
In addition to its A380 orders, Emirates has 70 Airbus 350s, 18 Boeing 777-300s and seven Boeing air freighters on order, totalling 143 wide-body aircraft worth more than $48bn.

"The world’s largest passenger jet, which typically has 525 seats, costs $346.5m at list prices, although large customers receive sizeable discounts."

While the luxury airlines can offer has been much commented on in the press, Airbus is stressing that the A380 is a money maker for airlines:  "The big news for operators is that the A380 is earning hard dollars at the same time. Introducing this next-generation jetliner is saving customers millions in operating costs annually while creating thousands of extra seats on long-haul routes. With the lowest cost per seat and the lowest emissions per passenger of any large aircraft, the A380 provides a competitive edge."


Molly McMillan reports in Air Capitol Insider, Hawker Beechcraft has found some business and Bombardier brags "it has captured 50 percent of net orders in the 100- to 149-seat marekt segment over the past two years. The program is on schedule for entry into service in 2013."

In a video report, Richard Milne reports from the Farnborough Airshow on the rise of emerging market manufacturers and the challenge posed to Airbus and Boeing from the Bombardier C-Series.  (3m 5sec) 

Separately,Molly McMillan reported in the Eagle, that "Hawker Beechcraft is looking at states that might be suitable for developing facilities to build parts for the company and has narrowed the field to two — Mississippi and Louisiana" according to its CEO, Bill Boistur. Molly McMillin reports that he said, "'The market for our products has decreased dramatically over the last 18 months...Our view is that this is not a momentary decrease, and we believe strongly it's necessary to adjust the cost structure of the company to be able to be profitable in a small market.'"

Payrolls Are Up, Employment is Up, and the Labor Force Surges Causing a 9.9% Unemployment Rate

BLS released its April jobs report. Unemployment hit 9.9% because the labor force jumped by 805,000 including almost 200,000 re-entrants. Payroll jobs were up 260,000. Private jobs up 231,000 including 44,000 manufacturing jobs.

Although the unemployment rate rose, the household survey showed employment growing faster than population for the fourth straight month.

As for Wichita's unemployment situation, aviation is the core of its economic base. There was no evidence of a rise in aviation jobs in the report motor vehicle manufacturing jobs rose by 4,100 jobs while other transportation equipment employment fell by 4,000.

Correction:  The last sentence should read: "There was no evidence of a rise in aviation jobs in the report: motor vehicle manufacturing jobs rose by 4,100 jobs while other transportation equipment employment fell by 400."

You Doubted that We Are in a Recovery? Jobs Up by 162,000 Confirming the Household Uptrend

Confirmation for the Recovery

Mammon Among Friends has been dating the cyclical trough at June, 20010. Skeptics can now finally find confirmation that there is indeed a recovery in the jobs data announced this morning.

The Bureau of Labor Statistics announced, "Nonfarm payroll employment increased by 162,000 in March, and the unemployment rate held at 9.7 percent. Temporary help services and health care continued to add jobs over the month. Employment in federal government also rose, reflecting the hiring of temporary workers for Census 2010. Employment continued to decline in financial activities and in information."

The Household Survey of Employment

I have been following the household data very closely.  While noisy and trend distorted by the Census Bureau's insensitivity to the need for useful time series, the household data do not suffer from the cyclical biases of the payrolls data.

The unemployment rate remained at 9.7 percent in March, below its cyclical high of 10.1 percent in October.  For three months, households have reported large increases in employment after a huge drop in December (During Christmas, retailers did not hire as many workers as the seasonal adjustment process projected.)  Labor force growth has been strong.

Employment increased faster than population again in March.  Common sense dictates that the employment ratio, which hit bottom in December,  should be a long lagging indicator.  Bottoming out six months after the cyclical peak would be consistent with that characterization.

The unemployment rate is now five months past its cyclical high and the employment ratio is three months past its cyclical low.  This reflects the global recovery.

The Economic Recovery

We are emerging from a financial and economic crisis of historic dimensions.  Unemployment reached levels not seen since 1982.  America suffered the largest falls in industrial output and housing starts since the “Roosevelt Recession” of 1937-8.  

However deep the recession, the recovery is well underway.  A long list of indicators hit bottom last year and are rising: auto sales (February), durable goods orders (March), real retail sales (April), housing starts (April), and industrial production (June.)  The fall in global industrial production ended in March as did world trade’s in May.

Wichita

Aircraft orders were up sharply in February according the the Census Bureau for the second straight month.  The BLS payroll data indicated aerospace employment was level for March (it does not break out the detail in its monthly reports.)

Jobs

The Bureau of Labor Statistics released its Monthly Employment Report for February. Reading the tea leaves, we find confirmation that the economic recovery is underway. I stick by the judgment that June, 2009 was the trough.

There was little agreement among economists anticipating the reports. Snow had dampened construction activity and retail sales particularly in the east. The "Consensus" estimates were a drop of 50,000 jobs and a rise in the unemployment rate from 9.7 percent to 9.8 percent. The unemployment rate actually stayed at 9.7 percent and jobs dropped by 36,000.  According to American households, employment increased by more than popul;ation for the second straight month and it looks like the employment population ratio hit bottom in December.

If you strip out auto sales from the BLS's estimate of transportation equipment employment, we find jobs fell by a thousand. This gives us some evidence that aircraft industry jobs are not growing.

The Unemployment Rate Goes to 9.7% and Payrolls Drop "Only" 216,000

The Bureau of Labor Statistics reported on the August employment situation this morning.

The Nation

The national unemployment rate rose to 9.7 percent in August from 9.4 percent in July and 9.5 percent in June.  The size of the labor force still reflects the upsurge we saw at the beginning of the summer.  The month to month variation in th employment rate mostly reflects the sampling variation in the proportion of respondents who say they have jobs.

Non-farm payrolls fell by 216,000 in August.

April Is the Cruelest Month

The Bureau of Labor Statistics survey of households shows a drop of 1,351,000 employed since April, while the payroll survey shows a fall of 1,258,000 jobs.  The good news is that new unemployment claims peaked in April.  Historically this has been a reliable indicator of a recession's end.

Wichita

Although BLS did not report job losses for the aerospace industry, transportation equipment other than autos and auto parts fell by another twelve hundred for a total loss of 17,100 since April.

Wichita's Unemployment Rate Jumps from 8.5% to 9.9%

The Kansas Department of Labor reported today that Wichita's economy lost 4,671 jobs in July and the unemployment rate hit 9.9 percent.

Seasonality plays a big part of it. In the Eagle, Dan Voorhis rightly points out that "The Wichita unemployment rate typically peaks in the summer months because some workers are laid off temporarily and claim unemployment. That may be exaggerated this year by employee furloughs." The summer labor force also reflects school leavers and youngsters looking for summer work. Some of this month's high unemployment rate reflects this.

Wichita's labor force participation rates have run about seven tenths of a percent higher than average in July, although the seasonal increase is greater when employment is scarcer. Comparing July this year with July two years ago, the labor force has grown about 21,300. A little over a third of that is population growth and a bit less than half is the increase in the labor force participation rate. So more people are looking for work either to supplement the lost income of families hit by the recession or to take advantage of the increases in the minimum wage. The federal minimum wage rose in the second of three steps in July. A seasonal reduction in the work force in August may keep us below 10%, but it is a touch and go proposition at this point.

The Kansas unemployment rate rose from 7% to 7.7 percent while Kansas payrolls shed 48,500 jobs. Labor Economist Tyler Tenbrink comments, "The amount of over-the-year job losses dropped from 54,800 jobs in June to 48,500 jobs in July. Although this is still a significant loss, it indicates that the rate of job loss did slow from last month. It remains to be seen if July will begin a new trend of slowing job loss or if we will return to the more rapid pace of job loss we were experiencing in the months prior to July."

Good News (Or Less Bad Bad News) From Labor Markets

The Bureau of Labor Statistics issued its employment report this morning. The unemployment rate fell from 9.5 percent to 9.4 percent. While the fall is not significant–month the month sampling variation can move it that much–it is a far cry from the large increases we have grown accustomed.

Jobs fell by 237,000 according to the payroll survey. This was less than half the monthly decline earlier this year and over 200,000 less than the average monthly job loss over the last twelve months.

A seeming bright note for Wichita: a first look at the payroll data indicates that jobs in the aerospace industry stopped their declines and may actually have risen. But I do not trust it. To get a rough estimate of what happened in the aerospace industry, you have to back into a number by subtracting out motor vehicles employment from transportation equipment employment. The bulk, but not all, of the rest is our own dear industry. For July when you make that estimate it shows a small increase in jobs on a seasonally adjusted basis. However, when I cross checked it against the unadjusted data, there was a 12,000+ decline. Unfortunately for us, the "good news" is simply an artifact of the seasonal adjustment process. Expect Wichita's unemployment rate in July to rise, not fall.

If You Think Wichita's Unemployment Is Bad, Look At Detroit's!

The Bureau of Labor Statistics summarized the employment situation for the country's states and metropolitan areas. As announced earlier by the Kansas Department of Labor, Wichita's unemployment rate is 8.5 percent. That is up from 8.3 percent in May and is a lot worse than a year ago when 4.2 percent of Wichita's workforce was out of work.

While the number of unemployed has more than doubled in a year, the actual number of people saying they have jobs is down less than a half percent. Some of this discrepancy may reflect the inevitable variation arising from any statistical sampling of households. It could also mean more people are looking or saying they are looking for work as secondary wage earners seek to help out when the primary bread winner is laid off. The increased labor force participation may also come from an increase in the federal minimum wage. Firms may also be reacting to the new minimum wage by hiring more experienced, more productive, higher paid workers to replace less experienced workers.

Wichita looks good in comparison to the rest of America. Fifteen states have double digit unemployment rates. The Detroit-Livonia MSA has the dubious distinction of "achieving" more than double our our unemployment rate at 17.1 percent.

The April Employment Report

It is the first Friday and whether or not you do the First Friday devotions, the Bureau of Labor Statistics issued its employment report for April.

The employment report came out better than Wall Street anticipated, but it was still pretty awful. The establishment survey still showed a huge 539,000 job loss. Employment in the household survey was up. Perhaps not statistically significant, perhaps just noise, but I'll take it.

In the establishment data, services took the same hit as goods production (down 269,000 jobs vs 270,000). Private jobs in services fell even more dramatically (down 341,000) with the difference coming from the growth in government jobs.

The aircraft industry looks to have lost 4,700 jobs in April.

In terms of the Postal Service, printing etc. was down almost eight thousand, paper down three and a half thousand, and finance was down twenty five thousand.

The Employment Report: Have We Hit Bottom?

Measured by the survey of U.S. establishments, jobs fell by approximately two thirds of a million in March (661,000) and the unemployment rate rose to 8.5 percent.

The financial services sector has lost a half million jobs since December, 2006.

And for the Wichita economy,what about the aircraft industry?

The Bureau of Labor Statistics publishes data on employment in transportation equipment other than motor vehicles which is predominantly the aircraft industry. In our sector, jobs fell by 8,400 in March with a total decline of over 75,000 since September.

And the future?

Two weeks ago I said my hunch was we were at the bottom. The employment report is grim, nevertheless, I am now convinced that we are at the recession trough. The vast worldwide inventory correction should have run its course. Many of the indicators (housing starts, factory orders, home sales) have hit bottom and have turned up, if only for a month. The stock market, the earliest of leading indicators is rallying. Unfortunately employment will lag well beyond the cyclical bottom.

Unemployent Goes to 7.6%; 2008 Payrolls Revised Down

This morning's employment report from the Bureau of Labor Statistics (BLS) shows a drop in payroll employment of almost 600,000 and the unemployment rate jumping to 7.6%.

Surprise, surprise, the BLS revised their estimates of payroll jobs in 2008 by about 350,000! The BLS's method for truing up the jobs data can not help but fail during recessions. Accuracy when the economy is in trouble does not appear to be high on its priority list. The latest revisions do not appear to have changed the timing of the recession as recorded in the data. The unemployment rate hit bottom in the spring, 2007 and payrolls peaked in November/December, 2007. When we can lay our hands on more details than are available in the press release, we can be more precise.

Closer to home, aerospace employment fell some 9,000 in January. This does not necessarily reflect the flood of layoffs announced in general aviation this past week (Cessna, Hawker-Beechcraft, and Bombardier.)