Jobs, Hires, Separations, and this Recession

The jobs report is out, and it's lousy - but hires and separations aren't supporting that story.

The BLS Employment Situation Summary for February shows a drop of 63K jobs. The goods sector declined quite a bit (-89K) with the service sector picking up the balance. Kind of a classic sign of nascent cyclical unemployment I'd say.

But ... I'm still a little buggy about the data on hires and separations. This is not as up to date, but looking at the most recently available December figures, it looks like there are really only problems in the West. The spread in the percentages of hires and separations is essentially unchanged over the last year in the other 3 regions of the country (+0.4% in the Northeast, +0.2% in the South, and +0.2% in the Midwest which did drop by 0.1 points). Both hires and separations are down in those 3 regions, suggesting that businesses are hunkering down with the staff they have on hand.

The West is a different story. In December 2006, hires exceeded separations by 0.5% in this region. A year later it is down to -0.2%. That's a big drop that evolved steadily before accelerating in the fourth quarter.

So ... can we really call this a recession if it is only one region? It isn't a pretty situation, but this looks a lot like 1986-7, where there was a lot of weakness in the West, but not much in the rest of the country. We didn't drop into a full blown recession that time around. Past performance is no guarantee of future performance though.