Going Back Into Recession?

As I write about the regional economy and commercial real estate market of different metro areas around the country, I am struck by a little-noted trend. In most parts of the country, while the widely quoted survey of business establishments showed that employment was higher in October 2013 than it had been in October 2012, the household-based data, also from the Bureau of Labor Statistics, shows a decrease. I’ll give one example. In metro Atlanta, the establishment survey shows the number of wage and salary jobs increased by 62,200 (2.6%) from October 2012 to October 2013. But household-based data shows employment fell by 12,200 (0.5%) during the same period, and the labor force fell by 36,835 (1.3%). I’m seeing the same thing all over the country. The establishment survey is considered more accurate, but it is often late to show a sharp turn in the economy, and is subject to large revisions when those sharp turns occur. And it does not include the self-employed, a growing share of the workforce.

In most metro areas the household-based data for October showed employment is falling when compared with a year earlier, but the labor force is falling even faster, which is why unemployment is edging down. At the national level, the sharp turn to the negative for in October was camouflaged by ongoing employment and labor force growth in some places, including California, New York, Texas, Florida, Michigan, Wisconsin, Indiana, the Dakotas, Utah. Those gains balanced the job losses elsewhere. Recently released national data for December, however, shows a bigger decline. I suspect most of the country is losing jobs again, a trend likely to make its way here eventually. The U.S. economy, and in some ways the global economy, is depending on selling Americans more than their employers pay them. This false economy was unsustainable and has been kept of life support, barely, for five years.