Wednesday, February 23, 2011

December 2010 Employment Report

As I thought, employment jumped in December – just don’t get too excited because it’s hardly likely to last (‘000):


That’s the highest ever monthly increase in jobs since DOS started issuing the monthly employment numbers – 460k jobs were created during the month, compared to the previous high of 411k in October (‘000):


Note how employment volatility has risen – something to keep an eye on in the future. A labour market that becomes increasingly skewed towards temp and part time jobs is likely to show greater employment variability. That’s not necessarily bad – in fact I’d expect it to happen as the economy becomes more service oriented – and the legal groundwork has already been prepared (here and here).

However, the increase in December employment also coincided with an increase in the unemployment rate (percent of labour force):


The reason for this anomaly is an even faster growth in the underlying labour force (log monthly changes):


…which handily swallowed up the record jobs number.

Given the temporary nature of many December jobs I’m betting this won’t last, and we’ll see unemployment creeping up as job openings during the year-end sales get slashed to more normal levels.

Technical Notes:

December 2010 Employment Report from the Department of Statistics (warning: pdf link)

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