On Friday morning the Labor Department announced its initial results of the Household and Employer surveys. Friday’s figures, of course, followed Thursday’s weekly release of the initial and continuing unemployment figures.
What kind of picture can we draw of the labor market?
Regarding overall employment, the employer survey came in at a seasonally adjusted month over month growth of 114K, a decrease of 28K from the growth seen in the prior month. Although the growth rate in employment was positive, the larger concern among analysts is that of deceleration, or, in other words, slowing growth rates. This concern is shown graphically in the top two charts of the employment dashboard above or the top two charts of the chart below, containing only the past 12 years.
Has the year over year growth rate in employment peaked? In looking at the entire history and at the most recent history, it looks like it is close. Perhaps Barack Obama is just really lucky. Of course, if the employment market has peaked, the recent recovery could be labeled as the second shortest recovery on record, something that would indicate continued growth is on the horizon.
Switching now to the claims figures, initial claims came in at 367K, an increase of 4K over the upwardly revised 363K of the prior week. Because claims figures are high frequency, looking over a longer term horizon gives one a better view of the trend. The trend looks like it has bottomed out, at least according to the historical yearly basis. When looking at the recent monthly figures, the concern of initial claims being close to bottoming out is confirmed, with claims up 2.4K over the prior month figure, and only 3.350K below where they started the year.
With initial claims giving generally lackluster indication of continued growth, what do the continuing claims indicate? Overall, the same concern appears when looking at historical behavior, although recent figures are more on the upside (meaning lower continuing claims), with the monthly averaged figure for September coming in at 3.285 million, a decrease of 38.75K from the August figure.
Overall, what is there to gather from the recent labor market figures? Well, it looks pretty lackluster, with overall employment growth coming in under analyst expectations. Because monotonous, flat growth rates generally don’t stay very long – accelerating or decelerating growth rates are almost always the case in business, the economy, and life – the real question becomes: is acceleration or deceleration on the horizon. When looking at the labor market, with the exception of the unemployment rate, deceleration is the most likely outcome.