Economic Update

05/09/2011

1st Quarter GDP: 1.8% (Advanced Estimate)

Video, Job Loss/Gain & GDP

Source: CNBC, Bureau of Economic Analysis, Bureau of Labor Statistics (BLS), Wall Street Journal

Video & Economic Summary Videos start with 15 sec commercial

Why Did the Unemployment Rate Rise?

The economy added 244,000 jobs in April Link to WSJ Articlebut the unemployment rate skipped from 8.8% to 9%. Why?

1. These are Calculated on two different surveys: - Establishment Survey (Businesses) = 244,000 Jobs - Household Survey (Individuals) = 9.0% Unemployment Rate

2. Household Survey has a smaller sample size (measures less people) and is more volatile.

11.The household survey showed a loss of 190,000 jobs + The labor force (# of people working or looking for work) stayed about the same

= Increased unemployment rate

4. The household survey also includes workers that don’t show up in the establishment survey, like:

- Farmers- The self-employed- People who work without pay in the family store

Adjusting the figures to make an apples-to-apples comparison with the establishment survey,the household survey showed a gain 50,000 jobs

Labor Market Pain Grows ( 3 min 09 sec) Matt Ferguson (May 5, 2011)

Pulse of Employment ( 4 min 22 sec)Tig Gilliam, of Adecco Group (Released just prior to the jobs number, May 6, 2011)

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  2010 2011

 Components of GDP 1st 2nd 3rd 4th  1st

Consumers   

1.33% 1.54% 1.67% 2.79% 1.91%(Personal Consumption)

*Businesses  

3.04% 2.88% 1.80% -2.61% 1.01%(Gross Private Domestic Investment)

Net Exports                   (Exports-Imports) -0.31% -3.50% -1.70% 3.27% -0.08%

Government  -0.32% 0.80% 0.79% -0.34% -1.09%Total GDP 3.70% 1.72% 2.56% 3.11% 1.75%

           

*Inventories  

2.64% 0.82% 1.61% -3.42% 0.93%component of Business

Number of people employed as a temporary employee divided by total non farm payroll employment

June 2009 Recession Officially EndedJuly 2009 Temp Penetration Trend Turns PositiveOct 2009 1st Job Growth >100,000 (Household Survey)Nov 2009 1st Job Growth (Payroll Survey)

Temp EmploymentTemporary help services lost 2,300 jobs.

Why is the Temp Penetration Rate Important?“Temporary Help Employment is a Leading Indicator for Nonfarm Employment—Staffing job trends lead nonfarm employment by three months when the economy is emerging from a recession and by six months during periods of normal economic growth.” American Staffing Association

US Employment SituationTemp Penetration Rate: 1.72 % no change +.02%

Job Loss/Gain: +244,000 Jobs Unemployment Rate: 9.0% +0.2%

I

Unemployment Rate: Bachelor’s Degree or higher

Dec Jan Feb March April4.8% 4.2% 4.3% 4..4% 4.5%

Source: Bureau of Labor Statistics, American Staffing Association

Nonfarm Payroll – Job Growth Details Jobs Added/LostPrivate Sector 268,000Government Sector -24,000Total 244,000

Job Gains Change from

Previous Month Retail Trade 57,100Professional & Business Services 51,000Leisure & Hospitali ty 46,000Manufacturing 29,000Construction 5,000Financial Activit ies 4,000Educat ion &

49,000Health Services - Education 7,300

- Healthcare 37,300

- Social Assistance 4,500

Job Loses Change from

Previous Month

Government -24,000

GDP Projections Survey of Economists (Wall Street Journal)

Job Engine Shifts Into High GearU.S. Payrolls Grow at Swiftest Rate in Five Years Despite Rise in Unemployment Rate to 9.0% (Wall Street Journal)

Unemployment Rate ProjectionsSurvey of Economists (Wall Street Journal)

Projections

Source: Wall Street Journal, CareerBuilderPlease note: WSJ Projections were released prior to the BLS report

Unemployment Rate ProjectionsSurvey of Economists (Wall Street Journal)