- September employment decreased 600 jobs and the unemployment rate held steady at 9.6%
- Revisions to August are encouraging as the private sector gained 2,000 jobs
- 2011Q3 looks nearly identical to 2011Q2 (flat)
I apologize for the delayed response to this month’s employment releases; we just returned from the FTA Revenue Estimating Conference which slightly more than 1/3 of the states attended, discussed revenue and listened to a number of great presentations including ones devoted to tax competition and the mobility of high income earners. Now onto the latest employment figures.
On Tuesday the Oregon Employment Department released its preliminary estimate for September employment along with revisions to August’s estimate. While most media reports and press releases focused on the preliminary September numbers, it was actually the revisions to August that caught my attention. First, in September seasonally adjusted Total Nonfarm employment declined 600 jobs (-700 private sector, +100 public sector) with the declines fairly broad-based across industries. Losses in Wholesale (-1,600) and Administrative and Waste Services (-900) were somewhat offset by gains in Construction (+800) and Leisure and Hospitality (+1,100). The public sector gain is a combination of Federal gains (+200), State losses (-100) and flat Local. Since February 2011, Total Nonfarm has been essentially flat with no real gains or losses as it has operated within a window of about 3,000 jobs. The same cannot be said for industry level data as the Private Sector has increased 7,000 during this time while the Public Sector has declined over 9,000.
As mentioned, the most encouraging item from the September report was actually the revisions to the August data – particularly the Private Sector revisions. In total the revisions amount to an additional 400 jobs in August (the estimate went from a gain of +800 for the month to a gain of +1,200), however the Private Sector was revised upward by 1,600 and the month now shows a gain of 2,000 Private jobs. That does means that the Public Sector was revised downward (by 1,200) which continues to lose jobs at roughly twice the rate as the previous recession. The gains in the Private Sector are encouraging in the sense that while they may be below what is needed to regain full employment any time soon they are still decent job gains and do diminish the prospects for recession in the near term. The opposite could be said for the Public Sector losses, however we did know that the losses were coming due to the timing of public sector budgeting the end of the increased federal monies.
The first graph illustrates the Where Is My Recovery? graph, however it takes a look over the time period since employment began growing in Oregon instead of simply the latest 12 month snapshot. Note that these employment figures are based on the Office of Economic Analysis’ seasonal adjustment and not the official seasonally adjusted numbers due to industry level detail for the Housing Related items.
The next graph is our bubble graph that illustrates industry employment change during the third quarter. Most industries are essentially flat quarter-over-quarter (on or near the horizontal value of zero), while nearly all industries are positive on a year-over-year basis (to the right of the vertical axis).
So where does that leave us moving forward?Our position is that we really need to start seeing those private sector job losses to really know that we are in recession (or about to fall into one). The last graph is a slide we put in front of the Governor’s Council of Economic Advisors last week during our first quarterly meeting. So far they are about evenly split between the dark blue line (current forecast of slow growth) and the light blue line (economic stagnation), with one advisor calling for the purple return to recession line.