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The Labor Market Situation in December

― January 13, 2014

― Dr. Jennifer Hunt

Chief Economist U.S. Department of Labor

Office of the Chief Economist

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Payroll survey: unexpectedly weak

1-month change, in thousands

• December 87

• November 226

• October 217

12-month change, in thousands

• December 2012 to 2013: 2,211

• Average: 184

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But the longer trend still shows steady growth

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However, still 4.2 million jobs below full employment

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Employment growth by super-sector this month

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Employment growth by super-sector over the year

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Weak data confluence of idiosyncratic factors?

Poor weather:

– Construction down 12,000

Volatility:

– Motion pictures down 14,000

Slow ramp-up to tax season:

– Accounting and bookkeeping down 25,000

Measurement error?

– CPS also showed bad employment data

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Construction employment edged down in December, but is up 122,000 over the year

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Losses in information sector driven by motion picture and sound recording industry

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Unemployment dropped sharply

December 2013 6.7 %

November 2013: 7.0 %

October 2013: 7.2 %

December 2012: 7.9 %

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But fall in LFP explains ⅔ drop in unemployment

December 2013: 62.8 %

November 2013: 63.0 %

October 2013: 62.8 %

December 2012: 63.6 %

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Long-term unemployment rate remains highest since 1983

December 2013: 2.5 %

November 2013: 2.6 %

October 2013: 2.6 %

December 2012: 3.1 %

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Long-term unemployed are less likely to find a job

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Census Poverty Analysis from SIPP

Source: U.S. Census Bureau, Survey of Income and Program Participation, 2004 and 2008 Panel

www.census.gov/sipp/source.html

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Poverty lessons

Very common to fall briefly into poverty

–31.6% at least 2 months 2009-2011

Less common to be always poor (chronic)

–3.0-3.5%

But chronic poor contribute much to total months poverty

Poverty rates rose in recession, especially non-chronic

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Thank you!