What do the Numbers Tell Us

This bullish stock market is exciting as heck. Since late November 2012 the DOW continues to rise … going from 12,500 to over 15,000 … and hovering at 15,500 as I write this blog. According to the official numbers, the Great Recession was officially over in the summer of 2009. However, it doesn’t seem so robust for the average American. When one looks at the statistical facts that are public information, you understand why we still feel things aren’t as robust as they seem from the stock market numbers. This month the U. S. Department of Labor reported employers added 195,000 jobs to their payrolls … which beat the estimate of 165,000. Payrolls for April and May were revised higher, to reflect an additional 70,000 jobs. While these numbers look good, the employment situation in America continues to have several perturbations. Let’s look at some key statistical areas and see if we can gain some insights from this public information. (NOTE: All statistics come from the U. S. Department of Labor Statistics)

1. Unemployment  in the general overview, the unemployment rate remained unchanged at 7.6% even with exceeding the estimated job increases in June (165,000). Granted that is below the peak rate of 10% in 2009, but the unemployment rate has now remained over 7% for 55 consecutive months.
2. Manufacturing – in the U S continues to take its hits. While manufacturing use to be the foundation for the U S economy, that is no longer the case. Over the past ten years, more than 2.6 million manufacturing jobs have been eliminated in the U S, with most going overseas. And the June statistics show that manufacturing lost 6,000 jobs, which represent the fourth consecutive month for reduction this year. It may surprise many to learn that the number of employees in manufacturing is near its lowest point since 1946. Will it continue to go down?
3. Part Time Workers – the number of people employed part time due to the economy and not being able to find full time employment increased by another 322,000 in June to 8.2 million … the most ever in this segment in history. Many of these are individuals who have had their hours cut back and were unable to find a full time job. They are also the reason for the large reduction in the unemployment rate the past several months.  And these are generally not good paying jobs.
4. Percentage of Working Age Americans with a Job – is under 59%, its lowest since 1983. (Think about that statistic) This ratio most likely will not improve for many years. The adult population grows at about 200,000 people per month, which is about the same as the jobs being created each month to date in 2013. (Remember – last month’s numbers show increase jobs of 195,000 on an estimated 165,000)
5. Quality of Jobs versus Quantity Jobs – there seems to be a realization of more analysts and economists (and we assume our government leaders) that there is a quality issue with the jobs being created. Leisure and hospitality employment increased by 75,000 jobs in June, 60,000 in May. Retail jobs added 37,000 jobs in June. These are not normally quality well paying jobs … the vast majority are basically minimum wage and part time jobs.

What insights do you glean from these public statistics?

Are you happy with your outlook the next six months … two years?

Will things be better or worse by January 2014?

As a business leader what actions will you take based on these statistics?

What other statistics can you think of that might improve or offset these?

© Phil Hoffman 2013. All rights reserved