by Calculated Risk on 12/04/2010 04:34:00 PM

The collapse in the labor force participation rate has been one of the key stories of the great recession. The participation rate is the percentage of the working age population in the labor force.

The labor force participation rate has fallen from 66.2% in May 2008 to just 64.5% in November 2010.

A few weeks ago I looked at Labor Force Participation Rate: What will happen?. I looked at the aging of the population and concluded that the participation rate will probably increase to around 66% over the next 5 years before declining again - and that will keep upward pressure on the unemployment rate.

However one of the key trends has been the decline in the participation rate of men - and that is continuing.

Click on graph for larger image.

This graph shows the changes in the participation rates for men and women since 1960 (in the 25 to 54 age group - the prime working years).

The participation rate for men in this key demographic fell to a record low 88.8% in November.

An important question is: how much of the recent decline in this key participation rate is cyclical because of the recession, and how much is part of the long term trend. We won't know for sure until the labor market starts to recover.

by Calculated Risk on 12/04/2010 11:50:00 AM

A repeat of a key graph ...

Click on graph for larger image.

This graph shows the job losses from the start of the employment recession, in percentage terms.

The dotted line shows payroll employment excluding temporary Census workers.

This is by far the worst post WWII employment recession.

This second graph shows the same information aligned at maximum job losses.

Not only is this the deepest post WWII recession in terms of payroll job losses, but the recovery is very sluggish. I'll have more on employment later today ...

Employment posts yesterday:
• November Employment Report: 39,000 Jobs, 9.8% Unemployment Rate
• Employment Summary and Part Time Workers, Unemployed over 26 Weeks
• Seasonal Retail Hiring: Retailers remain cautious
• Graphics Gallery for Employment

by Calculated Risk on 12/04/2010 08:33:00 AM

Note: this is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Dec 3, 2010.

Changes and comments from surferdude808:

It was a very quiet week for the Unofficial Problem Bank List. There were two additions and one removal because of duplication.

The two additions were First Community Bank, Glasgow, MT ($219 million) and Monadnock Community Bank, Peterborough, NH ($110 million), which is the first institution from New Hampshire to appear on the Unofficial Problem Bank List. The duplicated entry was SouthBank, a Federal Savings Bank, Cornith, MS, which has relocated to Huntsville, AL.

The other change is the termination of a Prompt Corrective Action order by the OTS issued against Aurora Bank FSB, Wilmington, DE ($4.4 billion). After these changes, the Unofficial Problem Bank List includes 920 institutions with assets of $410.3 billion.

by Calculated Risk on 12/03/2010 08:18:00 PM

From National Federation of Independent Business (NFIB) chief economist William Dunkelberg: Small Business Job Creation Positive in November

“In November, small business owners reported net new job creation. It wasn’t much, an average per firm increase of .01 workers, up from 0.0 in October. Seasonally adjusted, 14 percent of owners reported increasing employment at their firms by an average of 3.4 workers, the highest reading since December 2007 (the peak of the last expansion according to the National Bureau of Economic Research). On the down side, 16 percent reported reducing employment, an average of 3.2 workers. Bottom line, job creation was positive in November.
...
[P]lans to create jobs gained three points, rising to a net 4 percent of all owners, the best reading in almost two years (this after a four point improvement in job creation plans in October, a solid trend that promises a pickup in the pace of job creation).

Not much, but a step in the right direction.

Earlier employment posts:
• November Employment Report: 39,000 Jobs, 9.8% Unemployment Rate
• Employment Summary and Part Time Workers, Unemployed over 26 Weeks
• Seasonal Retail Hiring: Retailers remain cautious
• Graphics Gallery for Employment

by Calculated Risk on 12/03/2010 03:53:00 PM

Earlier employment posts:
• November Employment Report: 39,000 Jobs, 9.8% Unemployment Rate
• Employment Summary and Part Time Workers, Unemployed over 26 Weeks
• Seasonal Retail Hiring: Retailers remain cautious
• Graphics Gallery for Employment

The November ISM Non-manufacturing index was at 55.0%, up from 54.3% in October - and slightly above expectations of 54.7%. The employment index showed expansion in November at 52.7%, up from 50.9% in October. Note: Above 50 indicates expansion, below 50 contraction.

Click on graph for larger image in new window.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

From the Institute for Supply Management: October 2010 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in November for the 11th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI (Non-Manufacturing Index) registered 55 percent in November, 0.7 percentage point higher than the 54.3 percent registered in October, and indicating continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index decreased 1.4 percentage points to 57 percent, reflecting growth for the 12th consecutive month but at a slower rate than in October. The New Orders Index increased 1 percentage point to 57.7 percent, and the Employment Index increased 1.8 percentage points to 52.7 percent, indicating growth in employment for the third consecutive month and the fifth time in the last seven months. The Prices Index decreased 5.1 percentage points to 63.2 percent, indicating that prices increased slower in November. According to the NMI, 10 non-manufacturing industries reported growth in November. Respondents' comments mostly reflect cautious optimism. There is a degree of uncertainty that still remains for some industries and companies."
emphasis added

A little bit of positive economic news as opposed to the weak employment report.
.

by Calculated Risk on 12/03/2010 01:01:00 PM

According to the BLS employment report - and combining October and November - retailers hired seasonal workers at above the pace of last year, but well below the pre-crisis levels.

Click on graph for larger image.

Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year (not seasonally adjusted).

This really shows the collapse in retail hiring in 2008 and modest rebound in 2009.

Retailers hired 433 thousand workers (NSA) net in October and November. This is above the 367 hired last year in October and November, but well below the pre-crisis average of close to 550 thousand for the same two months.

Note: this is NSA (Not Seasonally Adjusted), retailers employed 28 thousand fewer workers in November than October seasonally adjusted.

This suggests retailers are still cautious about the holiday season.

Earlier employment posts:
• November Employment Report: 39,000 Jobs, 9.8% Unemployment Rate
• Employment Summary and Part Time Workers, Unemployed over 26 Weeks
• Graphics Gallery for Employment