Veteran Employment Situation Report for October 2012

November 2, 2012

Veteran Employment Situation Report for October 2012
Issue 12-11
November 2, 2012

Welcome to the VetJobs Veteran Employment Situation Report covering October 2012. This report will be in three parts. The first will summarize the Bureau of Labor Statistics report on the labor market, the second covers where the jobs were created, meaning where the best chance of finding employment may be, and the third covers the employment situation in the veteran market.

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CES versus CPS

A number of people have asked about the difference between the CES and the CPS unemployment reports. There has been a lot of confusion in the press regarding veteran unemployment rates because there are two unemployment reports generated by the Bureau of Labor Statistics (BLS) and many reports do not specify which unemployment rate they are using.

One is the Current Employment Statistics (CES), also referred to as the Current Employer Survey, which is a survey of mostly large companies and government agencies reports on hires and layoffs to determine how many jobs were added or lost each month. The CES does not have a good representation of small businesses which is where most new jobs are created.

The second report is the Current Population Survey (CPS), frequently called the household survey. The CPS is a joint effort between the BLS and the Census Bureau. The CPS picks up hiring by companies of all sizes, new companies, farm workers and the self-employed who are not included in the CES. The CPS has been shown to be more reliable and does a better job of picking up the shift in hiring because it includes small business hiring which is where most new jobs are created.

For the most part, I use CPS data instead of CES data.

EMPLOYMENT SUMMARY

Jeffry Bartash of MarketWatch (www.marketwatch.com) reports the U.S. economy gained a better-than-expected 171,000 jobs in October and more people were hired in the prior two months than previously believed, but the unemployment rate ticked up to 7.9% from 7.8%. Economists surveyed by MarketWatch expected a 120,000 increase in jobs, with an unemployment rate of 7.9%. Employment gains for September and August were revised up by a combined 84,000. The number of new jobs created in September was revised to 148,000 from a prior estimate of 114,000, while August’s figure was revised to 192,000 from 142,000.

John Galvin, Acting Commissioner of the Bureau of Labor Statistics (BLS) reports job gains occurred in professional and business services, health care, and retail trade over the month. Thus far in 2012, employment growth has averaged 157,000 per month, about the same as the average monthly gain in 2011 which was 153,000 new jobs per month. However, as many economists point out, the economy needs 250,000 new jobs to stand still and over 250,000 new jobs to have any economic growth.

The labor force increased by 578,000, and the labor force participation rate edged up to 63.8 % in October. Total employment, as measured by the household survey, increased by 410,000, while the employment-population ratio was little changed at 58.8%.

The bottom line from the above data is the economy is recovering at a very anemic rate, the worst recovery after any recession since 1900. Employers are still reluctant to start major hiring. Most are waiting for the outcome of the presidential election.

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WHERE THE NEW JOBS WERE CREATED

For those people looking for work, the following paragraphs will give them an idea of where new jobs were created. BLS reports professional and business services employment increased by 51,000 new jobs. Within the professional and technical services component, employment in computer systems design continued to trend up (+7,000). Within the administrative and support services component, employment in services to buildings and dwellings rose by 13,000. Employment in temporary help services changed little over the month and has shown little net change over the past 3 months.

Health care employment rose by 31,000 in October, with job gains in ambulatory health care services (+25,000) and in hospitals (+6,000). Over the past 12 months, health care has added 296,000 jobs.

Employment in retail trade was up by 36,000 in October, with increases occurring in motor vehicle and parts dealers (+7,000) and in furniture and home furnishings stores (+4,000). Over the past 3 months, retail employment has increased by 82,000.

In construction, employment in specialty trade contractors rose by 17,000 in October. Elsewhere in the goods-producing sector, mining employment declined by 9,000, and manufacturing employment was little changed. On net, manufacturing employment has shown little change since April.

Average hourly earnings for all employees on private nonfarm payrolls edged down by 1 cent in October to $23.58. Over the past 12 months, average hourly earnings have risen by 1.6%. From September 2011 to September 2012, the Consumer Price Index for All Urban Consumers (CPI-U) increased by 2.0%.

Turning to measures from the survey of households, BLS reports the unemployment rate was essentially unchanged at 7.9% in October, following a decline in the prior month. There were 12.3 million unemployed persons in October, little different from the prior month.

The number of involuntary part-time workers declined by 269,000 to 8.3 million in October; this follows an increase of 582,000 in September. On net, involuntary part-time employment has changed little over the past 3 months.

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VETERAN UNEMPLOYMENT REPORT

General Summary

The BLS Current Population Survey (CPS), also referred to as the Household Survey, reports there were 21,072,000 veterans alive in October, down from 21,102,000 in September, a loss of 30,000 veterans in October. There were 10,948,000 veterans in the workforce in October, up from 10,044,000 in September. This is an increase of 904,000 veterans in the workforce and continues the reversing of the steady decline of veterans in the US workforce. Some of the increase could be accounted for from returning members of the National Guard & Reserve (NG&R) and older veterans who need to go back to work to make ends meet as they run out of personal savings during this recession.

The CPS overall veteran unemployment rate for all veterans in October was 6.3%, a .4% improvement from the September rate of 6.7%. There were 689,000 unemployed veterans in October, down 46,000 from the 735,000 unemployed veterans in September.

The fact that veterans as a class have an overall unemployment rate that is lower than the national unemployment rate continues to indicate that veterans are having better success finding employment than non-veterans.

Younger Veterans

An area where there historically has been a veteran unemployment issue is in the 18 to 29 year old group. The unemployment rate for the 18 to 24 year old veterans in October was 24.8% (55,000), up from the September rate of 14.5% (33,000 unemployed), a total increase of 17,000. The unemployment rate for the 25 to 29 year old veterans in October was 10.7% (61,000), down from the 11.1% (64,000) unemployment rate in September.

VetJobs estimates that a substantial number of the unemployed 18 to 29 year old veterans are in the NG&R which would explain their high unemployment rate.

For comparison, the CPS overall unemployment rate for all 18 to 24 year olds (veterans and nonveterans) in October is 14.8% (2,846,000), up .4% from the September rate of 14.4% (2,725,000). The fact that the 18 to 24 year old veteran unemployment rate is 10.4% in October is higher than the non-veteran is disturbing news. VetJobs had predicted the young veteran unemployment rate would go up as more NG&R units returned. These numbers again reflect that the veterans as a group are having better success finding jobs, which is not to say some are not having problems.

Employers continue to shy away from hiring as a new employee an active member of the NG&R due to the constant call-ups. Employers cannot run their companies when their human capital is taken away for 12 months or more.

Historically, after every downsizing of the active duty troops (post WWII, Korea, Vietnam and during the Clinton years) the use of the NG&R went up. It appears that the same trend is again occurring as NG&R brigades start picking up the tasks of the downsized active Army brigades. Additionally, AFRICOM appears to be staffed heavily by NG&R troops.

Gulf War II Veterans

BLS CPS reports that the employment status of Gulf War II veterans increased to 10% (209,000), up from September’s 9.7% (202,000). The August Gulf War II numbers were 10.9% (227,000), so while the Gulf War II veteran’s numbers went up, the numbers are still lower than in the past. Of the total number of unemployed veterans in October, the Gulf War II veteran’s represents 30.3% of the 689,000 total veterans unemployed.

Women Veterans

The CPS unemployment rate for all women veterans in October is 9.5% (105,000), down from the September rate of 13.2% (145,000), an improvement of 40,000 women who found jobs. The CPS unemployment for all women in October is 7.4% (5,329,000).

The unemployment rate for Gulf War II women is 15.5% (44,000), down from the September rate of 17.7% (115,000). While this is an improvement, it is still higher than the August rate of 9.6% (57,000).

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Thank you for reading the September VetJobs Veteran Employment Situation Report. If you have any questions, please contact Ted Daywalt at info@vetjobs.com or call 877-838-5627 (877-Vet-Jobs).

Thank you for reading the Veteran Employment Situation Report. Should you know of others who may want this information, they can sign up for the report by sending an email request to contact@vetjobs.com.

Ted Daywalt
President

VetJobs
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Marietta, GA 30007-1445
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