Friday, August 07, 2009

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.

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