Before taking a look at the monthly jobs data, let's take a look at Initial Unemployment Insurance Claims from The US Department of Labor.







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For a look at how well states are handling the massive rise in claims, please see Unemployment Claims Crash Multiple State Websites.



Jobs Decline 12th Consecutive Month



This morning, the Bureau of Labor Statistics (BLS) released the December Employment Report.



In December 2007 I predicted a jobs disaster every month this year. That prediction is now 12 for 12. Here is a synopsis of the BLS report.



Nonfarm payroll employment declined sharply in December, and the unemployment rate rose from 6.8 to 7.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008. In

December, job losses were large and widespread across most major industry sectors.











Nonfarm Payroll employment has shrunk to mid-2006 levels.



Establishment Data







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Highlights





524,00 jobs were lost in total



101,000 construction jobs were lost

149,000 manufacturing jobs were lost

273,000 service providing jobs were lost

91,000 retail trade jobs were lost

67,000 professional and business services jobs were lost

45,000 education and health services jobs were added



22,000 leisure and hospitality jobs were lost



7,000 government jobs were added



Birth/Death Model In Outer Space

BLS Black Box

The net birth/death model component figures are unique to each month and exhibit a seasonal pattern that can result in negative adjustments in some months. These models do not attempt to correct for any other potential error sources in the CES estimates such as sampling error or design limitations.

Note that the net birth/death figures are not seasonally adjusted, and are applied to not seasonally adjusted monthly employment links to determine the final estimate.

The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend.

Household Data

In December, the number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) continued to increase, reaching 8.0 million. The number of such workers rose by 3.4 million over the past 12 months. This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs.



Persons Not in the Labor Force



About 1.9 million persons (not seasonally adjusted) were marginally attached to the labor force in December, 564,000 more than 12 months earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 642,000 discouraged workers in December, up by 279,000 from a year earlier.



Discouraged workers are persons not currently looking for work specifically because they believe no jobs are available for them. The other 1.3 million persons marginally attached to the labor force in December had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Table A-5 Part Time Status

Table A-12

Depression Statistics

There is no official definition of depression. Here is mine: When the U-6 unemployment rate rises above 12.5 in conjunction with a stock market that is down close to 50%, the CPI is negative, and nominal wages are stagnant, it's an economic depression. We are in one.

Small Businesses Have Largest Decline In Seven Years





Bear in mind that government cannot really "create" any jobs per se. It can raise taxes and shift private sector jobs creation to government jobs creation (typically a malinvestment), and it can bring production and consumption forward for those jobs that are genuinely needed (filling potholes), but once the potholes are filled, one has to ask the question, "What will we do for an encore?"

Addendum:

the CPI is negative, and nominal wages are stagnant