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Friday, January 6, 2012

Employment: Positive, But No Blow Out

The Good: Unemployment rates (both headline and those including underemployed) continued to decline.

The Bad: unemployment rates continued to decline in large part due to individuals dropping from the labor force.

The Good: there is a definitive sign that hours worked per person (an important aspect of GDP growth) has bottomed and is once again growing.

The Pretty Good: private sector growth has been consistent (but perhaps too low), but headline figures have been dragged down by a decline in government workers (due to austerity). My opinion is that government workers tend to add less to economic activity, so headline employment may underestimate GDP growth.

Source: BLS