Council of Economic Advisers Blog
- Posted byon November 5, 2010 at 9:44 AM EDT
Today’s employment report shows that private sector payrolls increased by 159,000 in October, continuing ten consecutive months of private sector job growth. While job growth was substantially higher than in past months and higher than analysts expected, the pace was not enough to reduce the overall unemployment rate, which remained at 9.6%.
In addition to the increase in October, the estimates of private sector job growth for August and September were revised up by a total of 93,000. Since last December, private sector employment has risen by 1.1 million. Over the last quarter, including today’s revisions, private sector employers added an average of 122,000 jobs per month.
Overall payroll employment rose by 151,000 last month. Among the sectors with the largest payroll employment growth were education and health services (+53,000), temporary help services (+34,900), and retail trade (+27,900). Anticipated layoffs of 5,000 temporary Census jobs and a drop of 7,000 state and local government jobs subtracted from the total.
- Posted byon October 29, 2010 at 9:30 AM EDT
Today’s report shows that real GDP, the total amount of goods and services produced in the country, grew at a 2.0 percent annual rate in the third quarter of this year, the fifth straight quarter of positive growth. While the economy continues to recover from the deepest recession since World War II, faster growth is needed to bring down the unemployment rate more quickly.
Some key components of GDP continued to expand in the third quarter. Consumer expenditures on goods and services rose at an annual rate of 2.6 percent, up slightly from the second quarter. Fixed investment (nonresidential structures, equipment and software, and housing investments) grew at an annual rate of 0.8 percent. Business investment in equipment and software increased by 12 percent, the fourth consecutive quarter of solid growth, indicating continued expansion of investments by private firms. Inventory investment contributed 1.4 percentage points to GDP growth, slightly less than the average in the last four quarters. Residential investment, however, declined.
Given the depth and severity of the recession, considerable work remains before our economy is fully recovered. Therefore, it is essential that we take the additional targeted actions that the President has recommended to further stimulate growth and job creation, such as extending tax cuts for the middle class, investing in our infrastructure, providing tax incentives to encourage businesses to invest here at home, and promoting exports abroad.
Austan Goolsbee is the Chairman of the President’s Council of Economic Advisers
- Posted byon October 8, 2010 at 9:33 AM EDT
Today’s employment report shows that private sector payrolls increased by 64,000 in September, continuing nine consecutive months of private sector job growth. This growth provides more evidence that the economy continues to recover, but we must do more to put the economy on a path of robust economic growth. At the same time, the rate of job growth is not as large as needed to bring the unemployment rate down quickly, as the unemployment rate remained at 9.6%.
In addition to the increase in September, the estimates of private sector job growth for July and August were revised up by a total of 36,000. Since last December, private sector employment has risen by 863,000. Over the last quarter of this year, including today’s results, private sector employers added an average of 91,000 jobs per month.
Despite the rise in private sector employment, overall payroll employment fell by 95,000 last month. In addition to the anticipated layoffs of 77,000 temporary Census jobs, state and local government also experienced a drop in employment of 83,000.
- Posted byon September 3, 2010 at 9:44 AM EDT
Today’s employment report was better than expected. Private sector payrolls increased by 67,000 in August -- the eighth consecutive month of private sector job growth. This growth is consistent with other recent data reports indicating that the economy is continuing to recover, albeit at a somewhat slower pace than in the early spring. The rate of job growth, however, is not as large as needed to bring the unemployment rate down quickly. Indeed, the unemployment rate rose one-tenth of a percentage point to 9.6%, as more than half a million people joined the labor force. The President continues to work with his economic team and with Congress to identify measures that could help speed the recovery and put the economy on a path of steadily declining unemployment.
In addition to the rise in August, the estimates of private sector job growth for June and July were revised up by a total of 66,000. Since last December, private sector employment has risen by 763,000. Despite the rise in private sector employment, overall payroll employment fell by 54,000, as 114,000 temporary Census jobs were eliminated.
Private sector payrolls expanded in a number of sectors, including education and health services, construction, and temporary help services. Manufacturing employment fell 27,000 in August; much of this drop likely reflects the fact that manufacturing employment in July was elevated because General Motors chose to forgo its usual two-week shutdown. The manufacturing ISM Report on Business released on Wednesday indicated stronger employment growth in manufacturing in August than in July. State and local government payrolls declined by 10,000 in August, consistent with continuing budget difficulties in many states and localities.
In the household survey, the number of people employed rose by 290,000. But, because the labor force rose by 550,000, the unemployment rate ticked up to 9.6% (from 9.5% in July). The employment -to-population ratio also rose one-tenth of a percentage point (to 58.5%), indicating that in the household survey employment growth more than kept up with population growth. In addition, the number of workers who have been unemployed 27 weeks or longer declined sharply, from 6.57 million to 6.25 million.
Against the backdrop of some unsettling economic data in the past few weeks, today’s numbers are reassuring that growth and recovery are continuing. At the same time, the fact that the growth of private sector payrolls is below the level needed to keep up with normal growth of the labor force is obviously unacceptable. There are a number of step we could take to help increase private sector job growth and put the economy on a path of steadily declining unemployment. We will be working with Congress on these measures in the coming weeks.
There will likely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and encourage robust job gains.
Christina Romer is the Chair of the Council of Economic Advisers
- Posted byon August 6, 2010 at 9:45 AM EDT
Private sector employment grew 71,000 in July, the seventh consecutive monthly increase, including continued growth in manufacturing. But, the pace of growth was not enough to reduce the overall unemployment rate, which remained 9.5 percent. There was, however, important variation in employment growth across industries: employment in manufacturing as well as education and health services increased, while that in financial services and construction decreased. Employment in state and local government, including public school teachers, decreased 48,000, underscoring the importance of the additional state fiscal relief working its way through Congress.
Overall payroll employment decreased 131,000. However, much of this decline was anticipated because of the winding down of temporary Census employment. The sharp decline in state and local government employment also contributed to the overall decline. Private sector employment increased 71,000, above the revised levels of private sector job growth in May (51,000) and June (31,000). Private sector employment has grown by 630,000 since its low point in December 2009. Average weekly hours in the private sector rose another one-tenth of an hour; hours are now five-tenths of an hour higher than they were in October 2009.
A bright spot in the private sector jobs numbers for July was the growth of manufacturing employment. Manufacturing employment grew 36,000, the seventh consecutive monthly rise. Manufacturing employment is now up 183,000 since its low point. Both financial services and construction shed jobs. Temporary help employment also fell, the first such fall since November 2009.
- Posted byon July 30, 2010 at 9:33 AM EDT
Today’s report shows that real GDP, the total amount of goods and services produced in the country, grew at a 2.4% annual rate in the second quarter of this year, the fourth straight quarter of positive growth. Growth in the first quarter was revised up to 3.7%, meaning that growth has averaged over 3% for the first half of 2010. This solid rate of growth indicates that the process of steady recovery from the recession continues. Nevertheless, faster growth is needed to bring about substantial reductions in unemployment. Much work clearly remains to be done before the U.S. economy is fully recovered. The comprehensive data revisions released with the report provide further evidence of just how severe the recession has been: the fall in GDP between 2007:Q4 and 2009:Q2 was 4.1%, making this the deepest recession since 1947
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