In looking at monthly spending series, I wasn't happy with what was available so I decided to try monthly employment. I wanted to better understand what happens to US employment over the holidays. The first thing I did was chart the numbers, and that chart is found below. It is hard to see end of year employment patterns on a graph like that, but it does underscore the dramatic and continuous growth of employment over a long period of time.
It is easy to see the many times when one month's employment fell, but the thing that screams at you from the graph is how persistently employment in the US has increased since the days before World War II. We've gone from about 30 million jobs to almost 160 million. That's quite a streak.
If you look at just the last 21 years -- employment went from 129 million at the end of 1998 to about 154 million at the end of 2019. That's a rise of about 25 million jobs in those years.
But that is not what I wanted to write about today. Hidden in all those data points is what usually happens in December of each year. The table below the chart shows you some information about monthly changes.
I will summarize it here.
Among the information collected from the Bureau of Economic Analysis:
Employment rose each month, on average by about 390,000 jobs from 1998 to 2018. Multiply that number by 12, and you get how much employment increased over the course of a whole average year from 1998 to 2018.
With respect to the end of each year, the average change in each month over those 21 years was:
November 294,000 per month
December -214,000
January -2,860,000
February 729,000
March 705,000
If you take those five months as a block, US employment averaged a decline of about 1.4 million jobs over those five months each year. But all the job loss was found in December and January of each year.
The wonderful holiday season with all that spending found employment drastically declining in December and January of each year. Even if you add in the strong snap backs in the following February and March (and the increase in November), you still get a strong decline for those five months on average each year.
Isn't that crazy! Each year jobs rise by an average of 390,000 each month despite the fact that in those five winter months employment declines by 1.4 million jobs. Those other seven months carry quite the employment load.
Looking at individual months supports the general view. In 2017-18, for example, employment change in the five winter months was -832,000 while the change from November to November was 1,265,000. Similarly in 2018-19, the numbers were -989,000 and +1,481,000.
When thinking of why this occurs, many things come to mind. We call these months holidays for a good reason. People often take time off from employment during these months. It might also be true that it takes employment in production in the months before December to create all the goods that will get sold in December and January. So production and employment cycles may be geared to working harder in the months before the holiday.
Finally, I purposely used data that was not seasonally adjusted. Much of what we read about has already been smoothed by seasonal adjustment factors. I wanted to see the real swings in the data.
What else could explain these crazy swings in employment in the USA? I am no expert on monthly employment changes, and even with the above reasoning, it blows me away to see these wild changes.
| FRED Graph Observations | ||||
| Federal Reserve Economic Data | ||||
| Link: https://fred.stlouisfed.org | ||||
| Help: https://fred.stlouisfed.org/help-faq | ||||
| Economic Research Division | ||||
| Federal Reserve Bank of St. Louis | ||||
| PAYNSA | All Employees, Total Nonfarm, Thousands of Persons, Monthly, Not Seasonally Adjusted | |||
| Frequency: Monthly | ||||
| observation_date | PAYNSA | |||
| Employment | CHG | |||
| 1998-11-01 | 128290 | 403 | ||
| 1998-12-01 | 128459 | 169 | ||
| 1999-01-01 | 125708 | -2751 | ||
| 1999-02-01 | 126696 | 988 | ||
| 1999-03-01 | 127409 | 713 | -478 | 2027 |
| 1999-11-01 | 131510 | 461 | ||
| 1999-12-01 | 131646 | 136 | ||
| 2000-01-01 | 129005 | -2641 | ||
| 2000-02-01 | 129667 | 662 | ||
| 2000-03-01 | 130764 | 1097 | -285 | 2209 |
| 2000-11-01 | 133614 | 365 | ||
| 2000-12-01 | 133555 | -59 | ||
| 2001-01-01 | 130681 | -2874 | ||
| 2001-02-01 | 131348 | 667 | ||
| 2001-03-01 | 131942 | 594 | ||
| 2001-11-01 | 132155 | -189 | ||
| 2001-12-01 | 131773 | -382 | ||
| 2002-01-01 | 128890 | -2883 | ||
| 2002-02-01 | 129362 | 472 | ||
| 2002-03-01 | 129969 | 607 | ||
| 2002-11-01 | 131667 | 121 | ||
| 2002-12-01 | 131259 | -408 | ||
| 2003-01-01 | 128577 | -2682 | ||
| 2003-02-01 | 128994 | 417 | ||
| 2003-03-01 | 129490 | 496 | -2056 | -1068 |
| 2003-11-01 | 131565 | 164 | ||
| 2003-12-01 | 131385 | -180 | ||
| 2004-01-01 | 128726 | -2659 | ||
| 2004-02-01 | 129337 | 611 | -2064 | -153 |
| 2004-03-01 | 130378 | |||
| 2004-11-01 | 133649 | 251 | ||
| 2004-12-01 | 133418 | -231 | ||
| 2005-01-01 | 130713 | -2705 | ||
| 2005-02-01 | 131536 | 823 | ||
| 2005-03-01 | 132376 | 840 | -1022 | 882 |
| 2005-11-01 | 136174 | 557 | ||
| 2005-12-01 | 135973 | -201 | ||
| 2006-01-01 | 133320 | -2653 | ||
| 2006-02-01 | 134245 | 925 | ||
| 2006-03-01 | 135226 | 981 | -391 | 1637 |
| 2006-11-01 | 138234 | 385 | ||
| 2006-12-01 | 138124 | -110 | ||
| 2007-01-01 | 135334 | -2790 | ||
| 2007-02-01 | 136026 | 692 | ||
| 2007-03-01 | 136923 | 897 | -926 | 783 |
| 2007-11-01 | 139510 | 312 | ||
| 2007-12-01 | 139297 | -213 | ||
| 2008-01-01 | 136268 | -3029 | ||
| 2008-02-01 | 136787 | 519 | ||
| 2008-03-01 | 137378 | 591 | -1820 | -352 |
| 2008-11-01 | 136761 | -681 | ||
| 2008-12-01 | 135732 | -1029 | ||
| 2009-01-01 | 132042 | -3690 | ||
| 2009-02-01 | 131808 | -234 | ||
| 2009-03-01 | 131675 | -133 | -5767 | -6239 |
| 2009-11-01 | 131236 | 48 | ||
| 2009-12-01 | 130690 | -546 | ||
| 2010-01-01 | 127820 | -2870 | ||
| 2010-02-01 | 128255 | 435 | ||
| 2010-03-01 | 129089 | 834 | -2099 | -2770 |
| 2010-11-01 | 131947 | 306 | ||
| 2010-12-01 | 131641 | -306 | ||
| 2011-01-01 | 128778 | -2863 | ||
| 2011-02-01 | 129592 | 814 | ||
| 2011-03-01 | 130499 | 907 | -1142 | 287 |
| 2011-11-01 | 133893 | 335 | ||
| 2011-12-01 | 133718 | -175 | ||
| 2012-01-01 | 131113 | -2605 | ||
| 2012-02-01 | 132067 | 954 | ||
| 2012-03-01 | 132971 | 904 | -587 | 1256 |
| 2012-11-01 | 136039 | 390 | ||
| 2012-12-01 | 135964 | -75 | ||
| 2013-01-01 | 133081 | -2883 | ||
| 2013-02-01 | 134120 | 1039 | ||
| 2013-03-01 | 134918 | 798 | -731 | 1064 |
| 2013-11-01 | 138543 | 524 | ||
| 2013-12-01 | 138292 | -251 | ||
| 2014-01-01 | 135488 | -2804 | ||
| 2014-02-01 | 136229 | 741 | ||
| 2014-03-01 | 137187 | 958 | -832 | 1264 |
| 2014-11-01 | 141331 | 465 | ||
| 2014-12-01 | 141326 | -5 | ||
| 2015-01-01 | 138511 | -2815 | ||
| 2015-02-01 | 139343 | 832 | ||
| 2015-03-01 | 140099 | 756 | -767 | 1774 |
| 2015-11-01 | 144066 | 421 | ||
| 2015-12-01 | 144063 | -3 | ||
| 2016-01-01 | 141088 | -2975 | ||
| 2016-02-01 | 141919 | 831 | ||
| 2016-03-01 | 142814 | 895 | -831 | 1531 |
| 2016-11-01 | 146482 | 433 | ||
| 2016-12-01 | 146270 | -212 | ||
| 2017-01-01 | 143393 | -2877 | ||
| 2017-02-01 | 144423 | 1030 | ||
| 2017-03-01 | 145078 | 655 | -971 | 1169 |
| 2017-11-01 | 148774 | 574 | ||
| 2017-12-01 | 148526 | -248 | ||
| 2018-01-01 | 145428 | -3098 | ||
| 2018-02-01 | 146665 | 1237 | ||
| 2018-03-01 | 147368 | 703 | -832 | 1265 |
| 2018-11-01 | 151375 | 522 | ||
| 2018-12-01 | 151203 | -172 | ||
| 2019-01-01 | 148295 | -2908 | ||
| 2019-02-01 | 149148 | 853 | ||
| 2019-03-01 | 149864 | 716 | -989 | 1481 |
| 2019-11-01 | 153624 | 622 | ||
| November | 294 | |||
| December | -214 | |||
| January | -2860 | |||
| February | 729 | |||
| March | 705 | -1073 | 390 | |
| Total Nov to Mar | -1413.6 | |||
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