U.S. and Canadian Labor Statistics

October 5, 2012

The 7.8% U.S. unemployment rate in September matched the rate that President Obama inherited in January 2009, and that was the last time before now that the rate was below 8%.  7.8% represents a 2.2 percentage point decline from the peak of 10.0% in October 2009 and a drop of 1.2 percentage points from September 2011.  Growth in non-farm payroll jobs of 114K in the latest month was near economist expectations but some 85K less than market whisper numbers of around +200K.  However, the level of non-farm employment, 133.5K was in fact above the assumed whisper level because job growth in July was revised upward by 57K, and that in August got revised 45K higher.  Adding the July-August revision of 102K to the 114K advance in September results in a net increase from the reported August level announced a month ago of 216K.  Over the past twelve months, private-sector jobs increased 1.806 million or 150K per month.  Unfortunately, public-sector workers shrank 51K, and budget austerity points to a continuing drag on the labor market from the government.

The labor market performance during the Obama years exposes a vulnerability in his bid for a second term.  To put a positive spin on the record, he might try comparing such to the Bush43 record.  George W. Bush inherited a 4.2% unemployment from Bill Clinton and handed off a 7.8% rate to Obama.  The rate hasn’t on net deteriorated any further.  The level of jobs now is 133.5 million, 63K less than when Obama took office.  That’s an annualized 0.04% rate of decline versus net job growth in the eight-year Bush presidency of 0.1%.  Obama might also point out that U.S. unemployment is currently 3.6 percentage points lower than unemployment in the euro area.  Some other aspects of the Obama economic record are quite decent.  CPI inflation has averaged 2.3% per annum, similar to Bush’s 2.4%, and core consumer prices have climbed just 1.7% per year.  The 10-year Treasury yield reflects price stability and has fallen by 77 basis points on balance to 1.74% now.  Most impressively, the Dow Jones Industrials Index is 65.2% higher now than when Obama became president.  Obama inherited a DOW that was 24.9% lower than eight years before when Bush was inaugurated. 

Canadian jobs increased by 52.1K last month and 34.3K in August.  That’s akin to a monthly increase in the U.S. labor market of 328.3K.  Employment in September was 1.0% higher than in September 2011, with a 1.4% increase in private employees mitigated by a 0.7% increase in public sector workers and a 0.3% drop in self-employed people.  Canada’s unemployment went up, nevertheless, to by 0.1 of a percentage point to 7.4% because of a 72.6K upsurge in the labor force during September. 

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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