Saturday, October 8, 2016

My Jobs Report September 2016

Here is the headline jobs growth figure for September which was 156,000 new jobs.  In an attempt to create a one figure each month they have to seasonally adjust it.  Here is what that looks like.  If this chart is meaningful to you then job stop reading here and go on to something else.

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Jobs peak in November and drastically drop of in January.  Then they start climbing back to the next November peak with an intra-cycle peak in June followed by an intra-cycle trough in July.  Then resume climbing back up to a new peak in November.

My jobs report records year to date, rather, cycle to date accumulated jobs and compares them to previous years.  I take the accumulated new jobs each month and divide by the number of months in the cycle.  This gives a figure that is easily comparable to other figures in previous years.  And since the population is estimated to be growing at a rate of 201,000 people each month, the monthly average of job growth is easily compared to the population growth.

For the sake of simplicity, I start at June, the intra-cycle peak.  Each horizontal line is a month.  Each data point is a year of that month.  In this chart, the top two lines are October and November because they are the highest monthly average of growth.  The June peak is the next line down.  July is the bottom line because that is the intra-cycle trough.  (Yes, in July of 2016 the number of new jobs created in this current cycle year is an average of 8,000 new jobs per month.  It was 55,000 last year).

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Note that September peaked in 2014 at an average monthly growth - cycle to date -  in 2014 of 127,000 more jobs.  This September which was a headline number of 156,000 more jobs shows 82,000 more jobs in my report.  That is down 35% from the 127,000 two years ago.  To me, that is really big.  Note also the steepness of the down slopes.

Now it is up to a robust October and November to pull the year back up to get to new highs.  I don’t think it is going to happen.  I think it will be hard to get 2 million new jobs this current cycle.

Previous annual job growth and the monthly average for the cycle:

Nov 2015   2,791,000      233,000
Nov 2014   2,788,000      232,000
Nov 2013   2,505,000      209,000
Nov 2012   2,145,000      179,000
Nov 2011   1,946,000      162,000
Nov 2010      712,000        59,000

My conclusion.  2016 is a bad year for job growth.

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