Recent Updates

  • US: Adv QSS (Q2), Consumer Sentiment (Aug-Pre)
  • US: Composite Indexes (Jul)
  • Canada: CPI (Jul), Intl Transactions in Securities (Jun)
  • * Philippines alternative BSP estimates of core inflation changed its reference year from 2006 to 2012.* * Mongolia PPI rebased from 2010=100 to 2015=100.* Malaysia: Central Government Debt (Q2)
  • UK: Travel and Tourism (Q4 2017)
  • Turkey: Consumer Confidence Index (Aug), IIP & Intl Reserves,
  • more updates...

Economy in Brief

Business Employment Dynamics Adds More Context to Hurricane Maria’s Destruction
by Charles Steindel  July 27, 2018

On Wednesday July 25 BLS released its Q4 report on Business Employment Dynamics: gross job gains and losses. As always, this rather neglected (perhaps because it is released with such a lag) report adds nuance to the regular job data. BLS estimates that last fall nearly 7.8 million hires were made by private-sector employers—but nearly 6.8 million jobs were lost! This enormous “churn” in the job market is always present—even at the depths of the last recession, in the first quarter of 2009, about 4.6 million jobs were filled.

BLS provides these numbers by state. Looking at the flows of hires in a state lends considerable insight into the value of policies intended to “create jobs.” The job creation figures cited for these programs are typically matched to net job gains (the usual monthly series), and so can look large. However, it’s quite arguable that the right comparison would be to the gross hiring figures (after all, the “new” jobs may be filled by people working at other firms, or by people who would otherwise have filled openings at other firms). In that regard, it’s interesting to see that about 2/3 of the states saw at least 50,000 hires in the 2007:Q4 (in other words, in one single quarter). In that light, the supposed “50,000” jobs that are said to be created, over a period of some years, with Amazon’s second headquarters, look less impressive (of course, many of the regular quarterly hires around the nation are likely relatively low pay temporary jobs).

Another insight gained by this report comes from an examination of the figures for Puerto Rico—unlike most releases, Puerto Rico shows up in this one. There were nearly 46,000 private sector hires in Puerto Rico in the fourth quarter. This was well above the island’s typical pace, and surely reflects positions filled for relief and reconstruction following Hurricane Maria. However, the hurricane hit in mid-September, and hiring was low in the third quarter. Taken together, the aggregate number of hires over the last two quarters of 2017 was not unusually high. The staggering number, though, is on the other side: more that 76,000 private sector jobs were eliminated (11.7 percent), which was about twice the pace of recent quarters. As a percentage of private sector employment, the U.S. Virgin Islands (also tabulated in this report) saw even more devastating job losses—nearly one-quarter of the private sector total were let go in the fourth quarter. These numbers are another reminder of how devastating Maria, and the earlier storm, Irma, that hit the Virgin Islands, were to those economies.

large image