Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. Perspective
Perspective
April 12, 2013 02:00 AM

Deciphering US labor data

Paul Sturgeon
Cincinnati-based KLA Industries Inc.
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    There has been a great deal of discussion over the past few years around the labor market, the unemployment rate, and so on. Most of it is at best uninformative, and at worst, just plain wrong. We are often left with a lot of data and very little information. In the next few paragraphs I will explain where all this data comes from, what it means, and in the end, tell you where to find the information you need to cut through the noise.

    The unemployment rate you probably think of first is the one published by the U.S. Department of Labor's Bureau of Labor Statistics (BLS). It is based on a monthly survey of households around the country. About 2,200 Census Bureau employees collect this data each month. Based on this survey, people are classified as unemployed if all of the following are true: they do not have a job, they have actively looked for work in the prior four weeks, and they are currently available for work. It also includes people waiting to be recalled from a temporary layoff.

    So we have interesting fact No. 1 — whether a person receives unemployment compensation has no bearing on whether a person is classified as unemployed.

    If you were employed for pay at all during the survey week, even if it was for one hour, you are considered employed. Also, if you did at least 15 hours of unpaid work in a family-operated enterprise you are considered employed, which I think qualifies as interesting fact No. 2.

    Over 41 percent of the U.S. population is considered neither "employed" nor "unemployed." If the person surveyed does not fall into either of those categories, they are included in a category called "not in the labor force." This would include retirees and students, but also anyone not seeking work outside the home for any reason. So the actual rate you hear announced, 7.7 percent as of the first of 2013, is calculated by dividing the

    number of people "unemployed" by the sum of those "employed" and "unemployed." Right now about 12 million people are "unemployed" out of about 155 million considered in the workforce.

    The BLS also puts out the weekly report of those filing new claims for unemployment benefits, which is considered a good leading indicator of the unemployment rate. This is also a good time to point out that all the data we talk about here, both governmental and private, are estimates and subject to later revision. Interesting fact No. 3 is that the initial weekly unemployment claims have been revised upward in 59 of the past 60 months. While curious, the revisions are typically not significant, and it is better to look at the four-week moving average of initial claims, which smoothes out a number of factors.

    Another closely watched employment measure is provided by ADP Institute, a private company that is also the largest outsourced payroll service provider in the U.S. ADP gets its data from clients, and the numbers are based on actual non-farm, private-sector payroll data. While some consider this a more accurate measure than BLS figures, the ADP numbers are also subject to revision, and historically some of the revisions have been significant.

    One other thing to keep in mind is that how markets react to the various data — which they always do — is based almost entirely on how the data compares to what analysts were predicting. So a weekly report of initial jobless claims of 350,000 could be good if analysts were expecting it to be 370,000, or bad if the number was anticipated to be 330,000.

    As Plastics News recently reported, U.S. plastics industry employment did not decline in 2011 for the first time in a dozen years, and actually eked out a 1 percent gain. So what can we conclude about the direction of employment in the U.S. and the plastics industry?

    While I believe all the published employment data should be viewed with a bit of skepticism, there are a couple things I would recommend that you look at closely. The first is the Institute for Supply Management's "Report on Business" for manufacturing. The ISM has been publishing this on a monthly basis for a long time, and it draws from 18 industries in the manufacturing sector. After a strong first half of 2012, this index has softened recently. We need numbers consistently above 50 in the first part of 2013 to indicate that the manufacturing economy can sustain its modest momentum.

    The second thing to focus on is the Conference Board Leading Economic Index.

    The Conference Board is a global, independent business membership that is a non-advocacy, nonprofit research association. Like ISM, the Conference Board has been compiling data for a long time, and it has 10 components, including unemployment claims, manufacturers' new orders, building permits and stock prices. While the index had been increasing in the latter part of 2012, the December numbers were weak, down 0.2 percent.

    On a final note, when looking at the labor market, all data must be considered in light of the baby boomers. The megatrend of over 10,000 baby boomers turning 65 years old each day has been happening for two years now, and will continue for another 16 years. Given the vagaries of calculating unemployment, and this steady drain of skills from the workforce, you can make some sense of the seeming paradox that is relatively high unemployment along with a severe talent shortage.

    Paul Sturgeon is a certified personnel consultant and the business manager at Cincinnati-based KLA Industries Inc., an executive search firm specializing in the plastics industry

    RECOMMENDED FOR YOU
    Perspective: Energy policies needed after Biden's oil comments
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    ExxonMobil weighing options for more chemical recycling capacity
    2
    Wilbert Plastic Services adjusts to changes with new owner, leadership
    3
    PepsiCo on a ‘multiyear journey' toward bioplastics
    4
    After years of challenges, can secondary sortation take off?
    5
    Biden sets US goal to replace 90% of plastics with biomaterials
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified