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Is Full Time Employment a Trend or Noise? Let’s Compare Today to the Great Recession

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10 comments on Is Full Time Employment a Trend or Noise? Let’s Compare Today to the Great Recession

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Payroll and employment data from the BLS, chart by Mish

Payrolls vs Employment Since March 2022

  • Nonfarm Payrolls: +2,452,000
  • Employment Level: +150,000
  • Full Time Employment: -490,000

Employment fell by 328,000 in October.

Full time employment is down 490,000 since March and down by 572,000 since May!

Some say employment is noise. Let’s tune into the discussion.

Household Survey vs Establishment Survey 

In Search of Noise

Trend or Noise?

Watch the Turns

Mish: “As for misleading – I suggest the household survey and full time employment may be the one to watch at turns, not the establishment survey.“

Great Recession Flashback 

Payroll and employment data from the BLS, chart by Mish

Great Recession Synopsis 

  • Two months prior to start of recession, jobs were 138,284,000. 
  • Five months into recession, jobs were 138,035,00. 
  • Two months prior to start of recession, full time employment was 121,875,000.
  • Five months into recession, full time employment was 120,708,000.

In a span of 7 months, jobs fell by 249,000.

In the same span, full time employment fell by 1,167,000.

Current Setup

Since March of 2022, payrolls are up about 2.5 million but full time employment is down by 490,000.

All of the employment rise (and then some) since March is part-time employment. But that’s a mere 150,000 in seven months since March. 

Looking Ahead

Due to tech, financial, and housing losses, I expect the next jobs report will be even weaker, possibly (if not likely) job losses.

Perhaps that’s the market focus. Who knows? I don’t and no one else does either. 

Noise Watch vs Reality Watch

  • Looking for trend changes ahead of recessions? Watch full time employment, not jobs.
  • A 7-month employment trend in a clearly weakening economy is unlikely to be noise.
  • Putting meanings on day-to-day market events is noise, much if not most of the time. 

I discussed the lead chart earlier today in Lost in the Strong Jobs Meme, Full Time Employment is Down 572,000 Since May

This is a follow up on what is and isn’t likely to be noise.

This post originated at MishTalk.Com

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Mike Shedlock

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vanderlyn
vanderlyn
1 year ago
the plague, the wuhan flu, covid 19, changed a great deal of peoples preferences for “work”. but demographics is the driver. PEW “As of the third quarter of 2021, 50.3% of U.S. adults 55 and older said they were out of the labor force due to retirement, according to a Pew Research Center analysis of the most recent official labor force data.In the third quarter of 2019, before the onset of the pandemic, 48.1% of those adults were retired. In regard to specific age groups, in the third quarter of 2021 66.9% of 65- to 74-year-olds were retired, compared with 64.0% in the same quarter of 2019.

The leading edge of the Baby Boomer generation reached age 62 (the age at which workers can claim Social Security) in 2008. Between 2008 and 2019, the retired population ages 55 and older grew by about 1 million retirees per year. In the past two years, the ranks of retirees 55 and older have grown by 3.5 million.”

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MPO45
MPO45
1 year ago
“Looking for trend changes ahead of recessions? Watch full time employment, not jobs.”
I think this is a critical assumption error. Was watching a business exec on CNBC that runs manufacturing businesses explain that people before covid were often working two manufacturing jobs, one during the week and another on weekend, when covid hit many people went to go do things like DoorDash, Uber, etc. After covid ended, many opted not to return to multiple “full time” manufacturing jobs but keep doing “gig” jobs because the pay was better.
My only critique of analysis here is that it is rooted and compares things to how they were done decades ago. Decades ago, the “gig” economy didn’t exist, the high-paying remote work tech economy didn’t exist (this enables people to move states or countries and take economic benefits with them), the productivity tools didn’t exist either, those are available globally.
What does the future hold? Will the economy transform into more “gig” type jobs? How will people, like me, working from a foreign country and spending my high pay in another country impact the US economy? What does that do to local country inflation vs US inflation? How does that impact supply chain? How does that impact tax revenue for the US and the foreign country? Money flow? Currency impact?
The world moves on and analysis should adjust with it, perhaps this is why the past few calls from “transitory inflation” to “recession coming” have been so way off. Doubling down on bad assumptions isn’t going to fix the analysis.
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Mish
Mish
1 year ago
Reply to  MPO45
That supports my view.
Getting part time gig jobs or fast food jobs is easy.
People are taking more of them to make ends meet. Yes, it’s that simple.
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vanderlyn
vanderlyn
1 year ago
Reply to  Mish
talk to the young generation. many have the energy, pardon the pun. the natural human energy, to have 2 jobs, and loving life. inflation is an issue, but the misery of not having a job is probably a 10x to some inflation in their food, clothing, weed and vacation costs………….
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vanderlyn
vanderlyn
1 year ago
Reply to  Mish
i have not heard of one person i know, taking a second job, due to inflation to make ends meet. not a one. i live in a very working class hood in brooklyn of immigrants from the poorest parts of the world. haiti and africa……….i know many college educated 20 and 30 somethings in my life and not a one of them. i’m twice 30, and all my pals are fat dumb and happy. the old office cube farm white collar middlebrow types who commuted to work are so much happier with “remote” work. what’s the downside? pulling a jeff toobin on zoom call? even he was offered his job back. talk about a tight labor market. ha ha ha. mish, you got this wrong. the rates, the “recession”, the jobs…….your calls on r/e is spot on. keep up the great blog.
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Jon
Jon
1 year ago
Reply to  MPO45
Payrolls haven’t kept up with profits. In fact they have detached from them since the 07-08 recession. Charts from the “Market Ear” show this. This may likely lead to a long recession or a “double dip” one.
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PapaDave
PapaDave
1 year ago
Reply to  Jon
First: increasing payroll can never preceed or hope to keep up with profits. Without first increasing profit it is very difficult to increase payroll.
Second: pay differs between individuals based on supply and demand. Highly skilled people are demanding and getting wages far in excess of inflation. The lower skilled have to bring the averages down.
Third: MPO brings up very good points. Our existing measures of employment do not take into account the nature of todays world of work. With each passing day we have more individual gig workers, entrepreneurs and self employed, and remote workers from a hundred other countries. A lot of these workers do not fit into existing measures, making those measures less useful with each new release.
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vanderlyn
vanderlyn
1 year ago
Reply to  PapaDave
100% correct. and the plague and boomer retiring by the gazillions……….there won’t be enough surgeons, home health aides, chefs, waiters, carpenters, engineers, entertainers, pilots……….to service their idleness but great need.
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Lisa_Hooker
Lisa_Hooker
1 year ago
Reply to  vanderlyn
No one seems to be concerned about the potential shortage of political pundits and television economic analysts.
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joshnyc
joshnyc
1 year ago
Reply to  MPO45
MPO, you really got to the core issue. Employment has changed in many ways that we may not yet fully understand. (i.e. is part-time or gig work the new FT work?) Unsurprisingly, trying to compare current statistics with historical is creating a lot of debate and some confusion.
My guess is that unemployment pain in the real world will eventually be much higher than headline Unemployment rates suggest.
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