Welcome to the second edition of the VetJobs Veteran Employment Situation Report covering April 2012. 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.
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 and the third covers the unemployment situation in the veteran market.
BLS Unemployment Summary
Before getting into the BLS report, I have raised questions in the past about the accuracy of numbers when it comes to unemployment reports, especially during a political year. Elizabeth MacDonald just published an article called Lies, Damned Lies and Government Jobs Data which echoes the concerns of many economists.
She points out that there is lots of talk about the “fiscal cliff” the U.S. faces at year end, as stimulus and tax cuts go away, so the last thing the government needs now is market distrust in its job numbers. But, as analysts dig into the government job numbers, questions are increasingly being raised about the reliability of the data, from questionable revisions in the weekly jobless numbers to the odd changes in unemployment rates.
For 59 out of the last 60 weeks, the weekly jobless numbers have been revised, after the fact, always in the same direction: higher. That’s unheard of. MacDonald points out that those revisions higher make the present week’s unemployment number look better in comparison, more so since the markets often treat the prior week’s revision as an afterthought.
And there is statistical information missing in the unemployment rate. The government’s reported unemployment number does not adequately include people who stopped looking for work, but who want jobs. The unemployment rate is the number of people out of work but who are actively looking. The government doesn’t count in that rate the now 6.3 million who have given up and stopped looking for work, but want jobs. That number has grown from 5.7 million in January 2009.
So the improving unemployment rate is quite artificial. The unemployment rate has been going down not because more jobs have been created and filled, the rate has gone down due to workers giving up and dropping out of the labor force.
A more indicative number to follow is the labor force participation rate. If the adult labor force participation rate stayed the same today as it was when the Great Recession ended in June 2009, at 67.5%, the unemployment rate would be 10.9%.
“Some 80% of the reduction” in the unemployment rate from 10% hit in October 2009 to today’s 8.2% “has been from adults quitting the labor force,” says economist Peter Morici. Morici adds the unemployment rate “rises to 14.5% if you factor back in those who’ve stopped looking for work but would re-enter if there were jobs, as well as part-time workers who would prefer full-time positions.”
America has lost a net 740,000 jobs since 2008. The engine of U.S. job growth, small businesses (those with 1-49 employees), reported a weak 58,000 jobs created, the third straight monthly decline and the lowest since August. Small businesses that produce goods lost jobs, too. Large businesses with more than 500 employees added just 4,000 jobs.
The bottom line is the labor force participation rate should not shrink during a recovery, it should be growing. And that is not happening in the American economy.
The unemployment rate declined to 8.1% in April, down from March’s 8.2%. The decline is the result of the size of the labor force, the number of employed and the number of unemployed all lower, but in varying degrees.
Under these circumstances, a drop in the unemployment rate is not a healthy sign for the job market.
The 115,000 jobs added in April were fewer than the 154,000 jobs added in March, a number the government revised up from its first report a month ago of 120,000. It also marked a sharp decline from December through February, when the economy averaged 252,000 jobs per month.
Job creation has been frustratingly slow since the Great Recession ended. Only 43% of the jobs lost have been regained 34 months later.
Economists note that “jobless recoveries” are becoming more frequent. In part, that’s because layoffs during recessions are more likely to be permanent. Factory workers who were cut in previous downturns were usually hired back once the economy perked up. Many of those jobs are now permanently lost. Companies are also quicker to lay off employees at the first sign of slowing growth. And as they find ways to squeeze more work from their remaining staffers, they’re slower to rehire.
Although the vacancy rate has finally recovered to the level for the period after a recession, clearly the unemployment rate has not. The persistent high unemployment rate despite an acceptable number of vacancies in a post-recessionary period, are reflective of a mismatch between the requirements of the job openings and available workers’ job skills. The lack of enough qualified people to fill a rising number of job openings is being widely reported throughout the media and indeed is a phenomenon
Where the New Jobs Were Created
The number of jobs in the private Goods-producing sector grew by 14,000 in April, which was well below February’s gain of 38,000 and March’s growth of 36,000.
-The Construction sector was down 2,000 jobs in April after eliminating 3,000 in March. However, two sub-sectors — Heavy and civil engineering as well as Residential specialty trade contractors — added jobs last month.
-Manufacturers continued to add jobs, but at a slower rate. In April, they added only 16,000 jobs after adding 41,000 in March and 30,000 in February.
-Mining and logging was flat in April as well as March. However, its Oil and gas extraction sub-sector added 800 jobs in April.
The private Service-providing sector added only 116,000 new jobs in April, which was a little worse than the 128,000 it added in March but well below the 218,000 gain in February.
-The Retail trade sector reversed direction and added 29,300 in April after eliminating 20,900 in March and cutting 15,200 in February. Building material and garden supply stores added a notable number of new jobs last month.
-Wholesale trade found space for 7,400 new jobs in April after adding only 2,900 in March and bringing 7,000 more in February.
-Jobs in the Transportation and warehousing sector came to a screeching halt as it eliminated 16,600 jobs in April after adding only 1,800 in March and bringing in 14,300 new jobs in February. The Transit and ground passenger transportation sub-sector must have lost its way since it declined by 11,000 jobs last month.
-The Financial activities sector seemed to lose interest in adding jobs with only 1,000 new jobs last month after adding 14,000 in March and 7,000 new ones in February.
-The Professional and business services sector added 62,000 jobs in April, which is encouraging after adding only 37,000 in March but still less than the 89,000 it added in February. Computer systems design and related services added 7,400 jobs in April and Management and technical consulting services, which is smaller, added 6,400.
-The Education and health services sector added a total of 23,000 jobs in April with the highly seasonal Educational services sub-sector contributing 4,300 of those new jobs. This means that the Health care and social assistance portion was up about 18,400 jobs, with several major sub-sectors adding jobs including Home health care services that added 6,300. However, Nursing care facilities as well as Child day care services eliminated a number of jobs.
-The celebration continued in the Leisure and hospitality sector but it was a subdued party with only 12,000 new jobs last month compared to the gain of 52,000 in March and 45,000 in February. However, the sector’s loss last month can be traced back to its Arts, entertainment, and recreation sub-sector as the Accommodation and food services sub-sector added a rousing 26,700 jobs in April.
The total number of Government jobs declined last month by 15,000. In April, the Federal government was down 4,000, State government added 1,000, and Local government eliminated 12,000 jobs, again with most of those cuts in education.
VETERAN UNEMPLOYMENT REPORT
The BLS CPS reports there were 21,256,000 veterans alive in April, down from 21,286,000 in March, a loss of 30,000 veterans in April. There were 11,114,000 veterans in the workforce in April, down from the 11,161,000 in the workforce in March. This is a decline of 47,000 veterans in the workforce.
The CPS overall veteran unemployment rate for April is 7.1%, down from the March rate of 7.5%. There were 785,000 unemployed veterans in April, down from the 834,000 unemployed veterans in February.
The fact that the veteran overall unemployment rate is lower than the national unemployment rate indicates that veterans as a class are still having better success finding employment than non-veterans.
However, the unemployment rate for the 18 to 24 year old veterans rose in April to 18.6% (39,000 unemployed ) from 17.8% in March (40,000 unemployed). The gross number of unemployed 18 to 24 year olds went down, but the percentage of unemployed went up.
The overall unemployment rate for all 18 to 24 year olds (veterans and nonveterans) was 14.6% with a total of 2,746,000 unemployed.
VetJobs anticipates the unemployment rate for the young veterans will increase more as DOD starts the furlough of 140,000 active duty troops and many of the National Guard and Reserve brigades start returning from their mustering stations in Kuwait.
If you have any questions, please contact Ted Daywalt at tdaywalt@vetjobs.com or call 877-838-5627 (877-Vet-Jobs).
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