Browsing Posts tagged unemployment

Employment Report – Nonfarm Payrolls – Easy Trends (thru March 2014)

Employment report figures are perhaps the most closely tracked economic numbers of all.  I’m continuing a feature called “Easy Trends” – a place where I’ll analyze the recent trend for the nonfarm payrolls from the monthly employment report and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest Employment Report trend analysis for more info.

Quick ‘n Easy

Nonfarm payrolls, a component of the employment report called “Employment Situation Summary,” is meant to measure the number of jobs in the economy except for those in the farming industry.  The large ups and downs in farming make it harder to see the true underlying trend, so jobs in that sector are excluded.  What people usually focus on is the change in nonfarm payrolls from the previous month.  We typically want to see something above 150,000 during average economic times.  (Easy Intro to Nonfarm Payrolls)

Nonfarm payrolls from the employment report is meant to measure the number of jobs in the economy except for those in the farming industry.  The large ups and downs in farming make it harder to see the true underlying trend, so jobs in that sector are excluded.  What people usually focus on is the change in nonfarm payrolls from the employment report for the previous month.  We typically want to see something above 150,000 during average economic times.  You can read more in my Easy Intro to Nonfarm Payrolls.

I have decided to analyze the two different methods the Bureau of Labor Statistics uses in estimating the number of new nonfarm payroll jobs added per month in its employment report.  The one that most articles quote is from the “Payroll Survey” (a survey of businesses).  The second one is from the “Household Survey” (survey of households, duh!).  Because the “Household Survey” includes a whole bunch of workers who aren’t included in the “Payroll Survey” the BLS has to adjust the data a bit to help them match up.  In the end, they should track each other fairly well.  Nevertheless, I felt it would be helpful to look at the trends from both of them.  In fact, my personal preference is to look at the average of the two to get a better estimate of the true trend of job creation.

Below is a graph showing the trends in both the “Payroll Survey” and the “Household Survey” after adjustments were made to the latter to represent a similar population.  As you can see, they track each other fairly well after adjustments (see the unadjusted data in a line that’s way above the others):

Employment Report - Nonfarm Payrolls Payroll and Household thru March 2014

Source: Bureau of Labor Statistics

Employment Report Trends and Projections

Below, I will discuss whether the nonfarm payrolls number from the employment report is currently in a trend, when the last confirmed trend was and what that says about projecting the next data point to be released.  I typically start my analysis from three years ago. continue reading…

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Initial Weekly Unemployment Claims (4-Week Moving Average) thru Week Ending March 29, 2014 – Easy Trends

In this article, I’ll do an “Easy Trends” analysis of the initial weekly unemployment claims data.  ”Easy Trends” is a place where I’ll analyze the recent trend for an indicator and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest unemployment claims trend analysis for more info.

Quick ‘n Easy

By tracking the number of people who are filing for unemployment benefits for the first time each week, we get a quick insight into the latest status of the economy’s health.  Fewer claims equals more jobs, which equals more income, which usually equals more consumer spending (70% of the economy!) that supports company profits, which in turn can lead to more hiring.

First, a nice summary about Initial Weekly Unemployment Claims and why they matter, from Econoday: (note: “jobless claims” are the same as unemployment claims)

Jobless claims are an easy way to gauge the strength of the job market.  The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy.  Nearly every job comes with an income that gives a household spending power.  Spending greases the wheels of the economy and keeps it growing, so a stronger job market generates a healthier economy.

Here’s a chart showing the last ten years of the four-week moving average for weekly jobless claims from the Federal Reserve Bank of St. Louis:

Unemployment Claims - Initial Weekly Unemployment Claims 4-Week Moving Average Week Ending March 29 2014 - FRED

Source: StLouisFed.org

Another very useful chart comes from the must-read blog of Doug Short.  In this chart, we see the 4-week moving average of weekly initial unemployment claims as a percent of the total size of the nation’s workforce.  In this way, we can adjust for the fact that the population has grown over the decades.  The latest level is about 0.21 percent, very close to where we were before entering the Great Recession in 2007, and it’s also slightly lower than where a “best fit” line of all the data since the late 1960′s would suggest we should be.  Here’s the chart the last time Doug posted it on his blog, which may not be as up-to-date as the current level I mentioned previously:

Unemployment Claims as Percent of Labor Force - Doug Short - March 2014

Courtesy: AdvisorPerspectives.com/Dshort/

Unemployment Claims Trends and Projections

Below, I will discuss whether unemployment claims data is currently in a trend, when the last confirmed trend was and what that says about projecting the next data point to be released.  I typically begin my analysis from three years ago. continue reading…

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GDP (Real Gross Domestic Product) – Easy Trends (Final Estimate Q4 2013)

GDP (or Real Gross Domestic Product) is the accepted measure of overall economic activity, so we should care which way it’s trending.  I’m continuing a feature called “Easy Trends” – a place where I’ll analyze the recent trend for real GDP and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest GDP trends analysis for more info.

Quick ‘n Easy

Real GDP is simply the broadest and most widely accepted measure of economic activity.  Even though there are specific details of it that many dispute, you can typically be assured that if this number is increasing consistently, things are going well in the economy.

You can read my Easy Intro to GDP for more information on what the Gross Domestic Product represents.  Suffice it to say, it’s a broad measure of economic activity.  If this number is growing, it is generally a good sign.  We probably want to see levels up in the 3 to 3.5 percent annual growth range for signs of an economy that’s growing at a healthy pace.  When the unemployment rate is too high, however, you need to have even more growth than that to put a dent in the unemployment figure.

Here’s a historical chart of real GDP annualized growth rate for each quarter from Doug Short, including lines that show the historical average growth rate and the “best fit” line:

Real GDP Q4 2013 Final Estimate - Doug Short

Courtesy: AdvisorPerspectives.com/Dshort/

GDP Trends and Projections

Below, I will discuss whether real GDP (real gross domestic product) is currently in a trend, when the last confirmed trend was and what that says about projecting the next data point to be released.  I typically start my analysis from three years ago. continue reading…

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Initial Weekly Unemployment Claims (4-Week Moving Average) thru Week Ending March 15, 2014 – Easy Trends

In this article, I’ll do an “Easy Trends” analysis of the initial weekly unemployment claims data.  ”Easy Trends” is a place where I’ll analyze the recent trend for an indicator and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest unemployment claims trend analysis for more info.

Quick ‘n Easy

By tracking the number of people who are filing for unemployment benefits for the first time each week, we get a quick insight into the latest status of the economy’s health.  Fewer claims equals more jobs, which equals more income, which usually equals more consumer spending (70% of the economy!) that supports company profits, which in turn can lead to more hiring.

First, a nice summary about Initial Weekly Unemployment Claims and why they matter, from Econoday: (note: “jobless claims” are the same as unemployment claims)

Jobless claims are an easy way to gauge the strength of the job market.  The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy.  Nearly every job comes with an income that gives a household spending power.  Spending greases the wheels of the economy and keeps it growing, so a stronger job market generates a healthier economy.

Here’s a chart showing the last ten years of the four-week moving average for weekly jobless claims from the Federal Reserve Bank of St. Louis:

Unemployment Claims - Initial Weekly Unemployment Claims 4-Week Moving Average Week Ending March 15 2014 - FRED

Source: StLouisFed.org

Another very useful chart comes from the must-read blog of Doug Short.  In this chart, we see the 4-week moving average of weekly initial unemployment claims as a percent of the total size of the nation’s workforce.  In this way, we can adjust for the fact that the population has grown over the decades.  The latest level is about 0.21 percent, very close to where we were before entering the Great Recession in 2007, and it’s also slightly lower than where a “best fit” line of all the data since the late 1960′s would suggest we should be.  Here’s the chart the last time Doug posted it on his blog, which may not be as up-to-date as the current level I mentioned previously:

Unemployment Claims as Percent of Labor Force - Doug Short - March 2014

Courtesy: AdvisorPerspectives.com/Dshort/

Unemployment Claims Trends and Projections

Below, I will discuss whether unemployment claims data is currently in a trend, when the last confirmed trend was and what that says about projecting the next data point to be released.  I typically begin my analysis from three years ago. continue reading…

Share

Employment Report – Nonfarm Payrolls – Easy Trends (thru February 2014)

Employment report figures are perhaps the most closely tracked economic numbers of all.  I’m continuing a feature called “Easy Trends” – a place where I’ll analyze the recent trend for the nonfarm payrolls from the monthly employment report and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest Employment Report trend analysis for more info.

Quick ‘n Easy

Nonfarm payrolls, a component of the employment report called “Employment Situation Summary,” is meant to measure the number of jobs in the economy except for those in the farming industry.  The large ups and downs in farming make it harder to see the true underlying trend, so jobs in that sector are excluded.  What people usually focus on is the change in nonfarm payrolls from the previous month.  We typically want to see something above 150,000 during average economic times.  (Easy Intro to Nonfarm Payrolls)

Nonfarm payrolls from the employment report is meant to measure the number of jobs in the economy except for those in the farming industry.  The large ups and downs in farming make it harder to see the true underlying trend, so jobs in that sector are excluded.  What people usually focus on is the change in nonfarm payrolls from the employment report for the previous month.  We typically want to see something above 150,000 during average economic times.  You can read more in my Easy Intro to Nonfarm Payrolls.

I have decided to analyze the two different methods the Bureau of Labor Statistics uses in estimating the number of new nonfarm payroll jobs added per month in its employment report.  The one that most articles quote is from the “Payroll Survey” (a survey of businesses).  The second one is from the “Household Survey” (survey of households, duh!).  Because the “Household Survey” includes a whole bunch of workers who aren’t included in the “Payroll Survey” the BLS has to adjust the data a bit to help them match up.  In the end, they should track each other fairly well.  Nevertheless, I felt it would be helpful to look at the trends from both of them.  In fact, my personal preference is to look at the average of the two to get a better estimate of the true trend of job creation.

Below is a graph showing the trends in both the “Payroll Survey” and the “Household Survey” after adjustments were made to the latter to represent a similar population.  As you can see, they track each other fairly well after adjustments (see the unadjusted data in a line that’s way above the others):

Employment Report - Nonfarm Payrolls Payroll and Household thru February 2014

Source: Bureau of Labor Statistics

Employment Report Trends and Projections

Below, I will discuss whether the nonfarm payrolls number from the employment report is currently in a trend, when the last confirmed trend was and what that says about projecting the next data point to be released.  I typically start my analysis from three years ago. continue reading…

Share

Initial Weekly Unemployment Claims (4-Week Moving Average) thru Week Ending March 1, 2014 – Easy Trends

In this article, I’ll do an “Easy Trends” analysis of the initial weekly unemployment claims data.  ”Easy Trends” is a place where I’ll analyze the recent trend for an indicator and discuss whether it is currently going up, down or neither.  You can read the basics of my methodology on the FAQ page.

NOTE: You may be reading an outdated analysis.  Please visit my latest unemployment claims trend analysis for more info.

Quick ‘n Easy

By tracking the number of people who are filing for unemployment benefits for the first time each week, we get a quick insight into the latest status of the economy’s health.  Fewer claims equals more jobs, which equals more income, which usually equals more consumer spending (70% of the economy!) that supports company profits, which in turn can lead to more hiring.

First, a nice summary about Initial Weekly Unemployment Claims and why they matter, from Econoday: (note: “jobless claims” are the same as unemployment claims)

Jobless claims are an easy way to gauge the strength of the job market.  The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy.  Nearly every job comes with an income that gives a household spending power.  Spending greases the wheels of the economy and keeps it growing, so a stronger job market generates a healthier economy.

Here’s a chart showing the last ten years of the four-week moving average for weekly jobless claims from the Federal Reserve Bank of St. Louis:

Unemployment Claims - Initial Weekly Unemployment Claims 4-Week Moving Average Week Ending March 1 2014 - FRED

Source: StLouisFed.org

Another very useful chart comes from the must-read blog of Doug Short.  In this chart, we see the 4-week moving average of weekly initial unemployment claims as a percent of the total size of the nation’s workforce.  In this way, we can adjust for the fact that the population has grown over the decades.  The latest level is about 0.22 percent, very close to where we were before entering the Great Recession in 2007, and it’s also slightly lower than where a “best fit” line of all the data since the late 1960′s would suggest we should be.  Here’s the chart the last time Doug posted it on his blog, which may not be as up-to-date as the current level I mentioned previously:

Unemployment Claims as Percent of Labor Force - Doug Short - March 2014

Courtesy: AdvisorPerspectives.com/Dshort/

Unemployment Claims Trends and Projections

Below, I will discuss whether unemployment claims data is currently in a trend, when the last confirmed trend was and what that says about projecting the next data point to be released.  I typically begin my analysis from three years ago. continue reading…

Share