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  • CPI Remains Steady

    The Consumer Price Index for All Urban Consumers remained flat for a second straight month in December. Once again a decrease in the energy index countered rises in the other indexes (the food index and the all items less food and energy index ). Over the last year, CPI rose 3.0% (seasonally adjusted). Here are some year-in-review details rom the Bureau of Labor Statistics release: The energy index increased 6.6 percent in 2011, a deceleration from the 2010 increase of 7.7 percent. The gasoline index, which rose 13.8 percent in 2010, increased 9.9 percent in 2011. In contrast, the household energy index accelerated in 2011, rising 1.8 percent after a 0.8 percent increase in 2010. The fuel oil index rose 18.0 percent and the electricity index increased 2.2 percent, although the index for natural gas declined for the third straight year, falling 3.7 percent. The index for food accelerated in 2011, rising 4.7 percent compared to a 1.5 percent increase in 2010. The index for food at home rose 6.0 percent in 2011 compared to 1.7 percent in 2010. All six major grocery store food group indexes rose in 2011, with increases ranging from 2.3 percent (fruits and vegetables) to 8.1 percent (dairy and related products). The index for food away from home rose 2.9 percent in 2011 after increasing 1.3 percent in 2010. The index for all items less food and energy also accelerated in 2011, increasing 2.2 percent after its historical low 2010 increase of 0.8 percent. This was the largest increase since 2007. Several indexes turned up in 2011. The apparel index rose 4.6 percent after a 1.1 percent decline the previous year. Similarly, the new vehicles index rose 3.2 percent in 2011 after a slight decline in 2010. The indexes for recreation and household furnishings and operations also rose in 2011 after declining in 2010. A number of other indexes rose more quickly in 2011 than in 2010. The shelter index accelerated notably, advancing 1.9 percent in 2011 after rising only 0.4 percent the previous year. The indexes for used cars and trucks, medical care, education, and personal care also rose more quickly in 2011 than in 2010. In contrast, the indexes for tobacco and airline fare posted smaller increases in 2011 than 2010. Here's a look at the CPI for All Urban Consumers over the last year: Read the full release here .

  • CPI Unchanged in November

    The Consumer Price Index for All Urban Consumers was flat in November. The index climbed for most of the year, before decreasing slightly in October. A decrease in the energy index , driven by lower gasoline costs, countered rises in the other indexes (the food index and the all items less food and energy index ). climbing 3.5% (seasonally adjusted) over the last year, the CPI decreased 0.1%. The key factor was energy costs. From the Bureau of Labor Statistics release: The energy index declined for the second month in a row and offset increases in the indexes for food and all items less food and energy. As in October, the gasoline index fell sharply and the index for household energy declined as well. The food index rose slightly in November, though the index for food at home declined as four of the six major grocery store food group indexes fell. The index for all items less food and energy increased 0.2 percent in November following increases of 0.1 percent in each of the prior two months. The indexes for shelter, medical care, apparel, and personal care all rose. These increases more than offset declines in the indexes for new vehicles and used cars and trucks. The all items index has risen 3.4 percent over the last 12 months. This is a slightly smaller increase than last month’s 3.5 percent figure, as the 12-month change in the energy index declined from 14.2 percent to 12.4 percent. The 12-month change in the food index also declined slightly, from 4.7 percent to 4.6 percent. In contrast, the 12-month change in the index for all items less food and energy continued to rise, reaching 2.2 percent in November. Here's a look at the CPI for All Urban Consumers over the last year: Read the release here .

  • August Jobs Report: Unemployment Rate Stays 9.1%, Jobs Flat

    The unemployment rate remains at 9.1%, as the US economy failed to add any jobs in August, according to the latest report from the Department of Labor . The private sectors continues to add jobs. Notably, health care, retail trade, manufacturing, and mining led the way in hiring, while the public sector continued to lose jobs. Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.4 million to 8.8 million in August. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. About 2.6 million persons were marginally attached to the labor force in August, up from 2.4 million a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 977,000 discouraged workers in August, down by 133,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.6 million persons marginally attached to the labor force in August had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. Read the full report from the BLS here .

  • June Jobs Report and an Estimate on How Many Jobs are Needed to Keep the Unemployment Rate from Getting Higher

    The news of the unemployment rate going up yet again in June was a popular--though not popular , if you catch our drift--topic over the weekend. We were late in getting to the Department of Labor 's official report, so we'll share it now. In short, unemployment rate has rose slightly to 9.2%. The US economy managed to add only 18,000 jobs during the month. Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in June at 8.6 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. In June, 2.7 million persons were marginally attached to the labor force, about the same as a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 982,000 discouraged workers in June, down by 225,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in June had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. Read the full report from the BLS here . So 18,000 jobs is clearly not enough to keep up with the population growth. How many jobs would we need to simply keep the unemployment rate where it is? Bill McBride , the blogger known as Calculated Risk , does the math and estimates it will take between 95,000 and 187,000 new jobs. Read the full post here .

  • Economy Added More Jobs in April

    The US economy continues to add jobs. "Nonfarm payroll employment rose by 244,000 in April," according to the latest report from the Department of Labor . Despite the increase in jobs, the unemployment rate rose slightly, and is now at 9.0% (up from 8.8% at the end of March). Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons unemployed for less than 5 weeks increased by 242,000 in April. The number of long-term unemployed (those jobless for 27 weeks and over) declined by 283,000 to 5.8 million; their share of unemployment declined to 43.4 percent. The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed over the month, at 8.6 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. In April, 2.5 million persons were marginally attached to the labor force, about the same as a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Read the full report from the BLS here .

  • James Hamilton: Inside the Numbers on Latest Unemployment Report

    According to the Bureau of Labor Statistics unemployment report for December , released on Friday, the US unemployment rate has dropped to 9.4%. Good news, right? Not so much, says James Hamilton , writing at Econbrowser : Unfortunately, the household numbers look much less rosy when you look at them a little more closely. For one thing, the impressive December gain comes right after an estimated loss according to the household survey of 175,000 jobs in November and a whopping loss of 294,000 in October. How can the household survey be signaling a falling unemployment rate over the last 3 months if its measure of the number of people working has actually gone down? Hamilton goes on to provide an answer to that question, and his approach is very instructive: Let me use an average over the last two months to smooth out some of the wild volatility in the household employment numbers and highlight what's changed in terms of people's employment status. In November and December, the civilian noninstitutional population over age 16 increased by 180,000 per month. The figure below illustrates what would have happened if these new people had entered into the respective employment categories at the same rate as the existing population. For example, if 58% of those 180,000 new potential workers found jobs, the number of employed individuals would have increased by 105,000 each month. If in December the number of employed had increased by 105,000, the number of unemployed increased by 11,000, and the number not in the labor force by 64,000, then measures such as the unemployment rate and the labor force participation rate would have been unchanged. Average additions (in thousands of people per month) that would have kept the unemployment rate, employment rate, and labor force participation rate unchanged between October and December. But we know that in reality, the unemployment rate was not unchanged, but fell from 9.7% in October to 9.4% in December. The figure below shows that this is attributable mathematically to the fact that almost 200,000 fewer workers were counted as being unemployed in December compared with October. Actual average monthly changes in November and December in the number of people in different employment categories, with the actual change minus the change predicted in the previous figure indicated in parentheses. Read Interpreting the employment numbers here .

  • Mark Thoma: Don't Use Producer Price Index to Forecast Inflation

    The Bureau of Labor Statistics released Producer Price Index data yesterday, and the year over year numbers show a rise in the price of finished goods that we have not seen since September of 2008. The monthly increase during the month of March was 0.7%. The PPI for intermediate goods showed a similar pattern. Here's a look at the finished goods data. First, the monthly percent change, seasonally adjusted: And the 12-month percent changes (this is not seasonally adjusted): So does this data mean it is time to consider inflation again? Mark Thoma says no. In his latest Money Watch column, Thoma argues that the "pass through from producer prices to consumer prices is less than 100 percent in any case, and in some cases it is close to zero," and he gives an interesting lesson in why we should look at "core inflation": First, core inflation is used to forecast future inflation. For example, this recent paper uses a “bivariate integrated moving average … model … that fits the data on inflation very well,” and finds that the long-run trend rate of inflation “is best gauged by focusing solely on prices excluding food and energy prices.” That is, this paper finds that predictions of future inflation based upon core measures are more accurate than predictions based upon total inflation. Second, we also use the core inflation rate to measure the current underlying trend in the inflation rate. Because the inflation rate we observe contains both permanent and transitory components, the precise long-run inflation rate that consumers face going forward is not observed directly, it must be estimated. When food and energy are removed to obtain a core measure, the idea is to strip away the short-run movements thereby giving a better picture of the core or long-run inflation rate faced by households. (I should note, however that this is not the only or even the best way to extract the trend, and the Fed also looks at other measures of the trend inflation rate that have better statistical properties, e.g. “trimmed mean” measures. Also, the first use of core inflation described above is for forecasting future inflation rates, the second attempts to find today’s trend inflation rate. There is a way to combine the first and second uses into a single conceptual framework, but it seemed more intuitive to keep them separate.) Let me emphasize one thing. If the question is “what is today’s inflation rate,” the total inflation rate is the best measure. It’s intended to measure the cost of living and there’s no reason at all to strip anything out. It’s only when we ask different questions such as what the inflation rate will be in the future — essential knowledge for policymakers due to lags between the implementation of policy and its effects — that different measures are used. Third, and this is the function that is ignored most often in discussions of core inflation, but to me it is the most important of the three, it is the inflation target that best stabilizes the economy (i.e. best reduces the variation in output and employment). Read Thoma's column here . For the BLS data on producer prices, click here .

  • A Good Friday Jobs Report

    There are still roughly 15.0 million unemployed Americans. The jobless rate remains at 9.7%. The number of discouraged workers--Americans who have stopped looking for work because they believe there are no jobs--is still climbing and has now reached 1.0 million. And the number of marginally attached workers--still looking for work but not counted among the unemployed because they did not search for a job in the past month--is now up to 2.3 million. And yet, for people looking for good news, any good news, on the jobs front, March was a good month. Take a look at the far right of the below charts: Today's report from the Labor Department showed that the US Economy gained 167,000 jobs last month. Not a lot, but a positive turn nonetheless. Read the jobs report from the Bureau of Labor Statistics here .

  • March Unemployment Figures--and the Bureau of Labor Statistics Methodology

    The Bureau of Labor Statistics released unemployment figures for March this morning. Nonfarm payroll employment dropped 663,000 jobs last month, and unemployment rose to 8.5%--the highest since November 1983 (when the rate was also 8.5%). Manufacturing was hardest hit, according to the Bureau of Labor Statistics, losing 161,000 jobs in March. Health Care was the only sector with an increase in jobs, adding a modest 8,000 jobs in the month. As bad as these numbers look, the Washington Post points out that the labor market is actually significantly weaker than the official report shows . Groups excluded from the official count include people who are working part time but would rather be working full time, people who want to work but haven't looked for a job in the past month, and people who have become discouraged and given up looking. If those groups are included, the unemployment rate is 16.2 percent, up slightly from February. The Post's Ed O'Keefe provides a good primer of exactly how the BLS goes about compiling and releasing the unemployment figures here: Read the BLS release here .