1/8/2012: Some sub-trends in the irish Live Register for July 2012

So, now that you've been fed the 'great news' story by the Irish 'analysts', and having, hopefully read my first post on the subject of Live Register numbers (link here), you might wonder - what sub-trends dominate the time series relating to irish unemployment in July.

Trend 1: long-term unemployment is now at all time high. Here's an honest down the line analysis from the CSO: "The number of long term claimants on the Live Register in July 2012 was 200,086. The number of male long term claimants increased by 4,160 (+3.0%) in the year to July 2012, while the comparable increase for females was 5,864 (+11.1%) giving an overall annual increase of 10,024 (+5.3%) in the number of long term claimants." Let me add to this: July 2012 figure of long-term unemployed is up 837 m/m.

"In July 56.5% (260,237) of all claimants on the Live Register were short term claimants. The comparable figure for July 2011 was 59.6% (280,222). The annual fall of 19,985 (-7.1%) in the number of short term claimants consisted of a decrease of 14,140 (-8.8%) in the number of male short term claimants and a decrease of 5,845 (-4.9%) in female short term claimants."

Now, when you think about it, the long term unemployed numbers include (or are net of) those who lose their benefits due to duration and changes in family circumstances. They are also net of those who leave the LR deciding to emigrate. These effects are much less pronounced for the shorter-term unemployed. And yet, the long term unemployment continues to rise. Not, that is something you won't hear in the Irish media either. Never mind, the 'experts' Irish broadcast editors pick for their panels are smart & do original research, aren't they?

Youth unemployment next: Per CSO "In the year to July 2012 the number of persons aged 25 and over on the Live Register decreased by 1,340 (-0.4%), and the number of persons aged under 25 decreased by 8,621 (-9.7%). Annual decreases in persons aged under 25 have occurred in all months since July 2010. The percentage of persons aged under 25 on the Live Register now stands at 17.5% for July 2012, down from 19.0% in July 2011 and 20.3 % in July 2010." These are NOT seasonally-adjusted figures, so y/y comparatives is all that matters and the news is decent here - at a headline level. Alas, we have no idea whether the young unemployed are getting new jobs or simply emigrate, though given the reduction in LR benefits for the younger workers, most likely they have a stronger incentive to emigrate. They also have a much better ability to do so, due to visa restrictions differences by age and lack of debt chain holding them back in Ireland.

One related sub-theme is that of the quality of employment out there. No direct gauge for it in the LR, but a glimpse via the numbers of casual and part-time signees on LR. per CSO: "There were 88,041 casual and part-time workers on the Live Register in July, which represents 19.1% of the total Live Register. This compares with 18.3% one year earlier when there were 85,865 casual and part-time workers on the Live Register. In the year to July 2012 the number of casual and part-time workers

increased by 2,176 (+2.5%)..." So while it is much better to have a casual or part-time job than not to have one, the trend remains the same - that of deteriorating, not improving quality of opportunities.

Nationals v Non-Nationals breakdown shows a slight decline in the proportion of LR recipients who are non-nationals. The fact that this decline has been very shallow and the fact that the numbers of national on the LR is declining at a similar percentage rate as that of non-nationals suggests that emigration is most likely fairly evenly spread between the two categories.

So much more 'speculative' analysis, if you want, but all pointing to either little change or deterioration in the underlying conditions relating to the labor market in Ireland.

1/8/2012: Live Register - Hidden Unemployment Rising

There's a boisterous chatter in the Irish media (unwilling to have any reality voices on the air anymore due to reasons unknown) about the latest headline numbers coming out of the Live Register for Ireland (July 2012 data released today).

Some of it is part-true. Some of it is part-spin. None of it is fully true. So in the next couple of posts I will be uncovering what the figures really do tell us. Stay tuned.

Let's start from the headline numbers:

• Standardized (Live Register-implied) unemployment rate remains intact at 14.8% in July, same as in June. The SUR is now between 14.7% and 14.8% every month since January 2012 and 14.8% is the highest point reached since the beginning of the crisis (hit first in February 2012). So headline story is: Irish Unemployment Remains at Record High for the Crisis.
• Last time we had 14.7-14.8% unemployment as measured by the Live Register was back in March-April 1994. Oh, that's right, 1994! Good news, folks, I guess is that it is still off 17.0 absolute record achieved back in December 1986-January 1987, though with a major caveat (see below).
• Want more 'good news'? Ok: crisis period average SUR is 13.5% and STDEV is 1.33, which means that the current rate of unemployment is more than 1/2 STDEV above the crisis period average.

Chart to illustrate the good news:

Bet you your local friendly radio presenter and their guests didn't mention the above, in fear of undermining your confidence in the economic turnaround.

But, hey, let's keep looking into the data:

• Overall numbers on Live Register (seasonally-adjusted) are currently at 437,300 (July) down 9,900 on July 2011 (-2.214%). This is good. M/m decline in July 2012 is 2,300 which contrasts with m/m rise in June of 2,500. Which is sort-of good: m/m decline is a good thing, m/m decline that doesn't fully offset previous m/m rise is not so good.
• Y/y June 2012 LR posted a decline of 6,200 (-1.39%) and this is now bettered by July decline of 9,900 (-2.21%). Which is good.
• 3mo average LR through July is 0.13% higher than 3mo average through April 2012. Not so good. Year on year, 3mo average LR is 1.77% lower in July. Which is good.

So the above is a mixed bag story. Yet, the story is hardly complete. You see, there are some 76,533 workers out there who are 'engaged' in State-sponsored Live Register Activation Programmes. The CSO has the following to say about them: "Persons on activation programmes are not counted as part of the monthly Live Register." Ugh? That's right - they get paid LR supplements. They don't work for actual pay. They are not unemployed and are not in receipt of state unemployment benefits. Let's add them to the LR, shall we?

Taking into account the numbers engaged in the LR Activation Programmes:

• There were 513,833 individuals in Ireland on LR as of June-July 2012 (note, Activation Programmes participation is reported with one month lag, just to make life hell for anyone trying to compile real figures).
• The above number represents an increase m/m on June's 501,516 (some 12,300 up). Year on year, the number of those in receipt of LR benefits is now up (not down) 1,680 (+0.33%) and that is worse than June y/y figure (up 1,429, or +0.29%).
• Recall that official Standardized Unemployment Rate is 14.8% on 437,300 LR recipients. This implies that counting those in Activation Programmes the real 'unemployment' rate is around 17% (17.4% more precisely, but there's a grey area of estimation errors around there).
• So the main headline, really, should be - total (official + hidden) unemployment in Ireland is up m/m and up y/y. Not down. Up!

Now, do me a favour (cause I can't find time to do this myself) - check with your local friendly radio / TV station and press - see if any of the 'incisive' analysts/guests/hosts/editors/journalists give you that sort of a breakdown on the numbers? 

Now don't take me wrong - some of these programmes are good, and it is generally positive that people are drawn to them. But until they gain full paying jobs post-completion, they remain unemployed. The Government has no right to write them off as 'not unemployed' by excluding them from the LR.

6/5/2012: Live Register for April 2012 - Sub-trends Part 2

Last post of three on the Live Register. The first post looked at the core trend in the Live Register, the second dealt with sub-trends by nationality, duration and casual/part-time employment.

In this post, I am dealing with occupational distribution of Live Register.

CSO covers occupational data as follows:

"Craft and related (24.1%) remained the largest occupational group on the Live Register in April, despite the fact that the number in the group fell over the year by 8,580 (-7.6%) to 103,626. The second largest annual percentage decrease was in the Clerical and secretarial group (-5.4%). Slight increases were seen in the Sales group (+1.8%) and the Personal and protective service group (+0.6%) over the year".

Here are some additional details:

Comparing y/y changes by category:

So several interesting things jump out of the data.

As expected, Associated Professional & Technical occupational category performed better than overall Live Register, posting stronger declines. This is consistent with the idea that exporting firms are maintaining their employment levels of mid- to lower-end staffing with some specialist knowledge. Alas, this outperformance is hardly spectacular.

Managers and administrators did relatively well until March 2012, since when their Live Register reductions have been underperforming overall Live Register - a worrying movement, but too short-lived to establish a trend. Clerical and Secretarial is posting some significant improvement relative to overall trend, but this comes on foot of average performance since November 2011 through February 2012.

Craft and related (the category including construction workers) is performing surprisingly well, suggesting that much of 'improvements' in the Live Register overall have been driven by people dropping out of LR coverage, not by jobs creation (recall, construction activity continues to tank).

An interesting feature of underperforming sub-categories is that they include manufacturing-linked Plant and Machine Operatives category (a sign that overall exports-led growth is jobless) and Sales category (showing the level of jobs destruction in domestic services, such as retail).

Changes in 2010-2012 April figures in absolute levels, shown in the first chart above show that Professional and Associate Professional & Technical categories have managed to reduce their overall Live Register counts by a combined 1,415 in two years! This is hardly consistent, overall, with a boom in profits expatriation by the MNCs and exports that we have experienced. Welcome as these numbers might appear, I wonder, how many of these LR reductions were due to emigration of skilled workers?

To summarise, I suspect that the core (practically the only) drivers of LR reductions have been drop-outs from the LR due to benefits expiration (especially for the categories with largest recorded declines), plus transition into state sponsored training schemes, plus emigration. I see basically no evidence consistent with the story that exports-led (or rather MNCs transfer pricing-led) growth has been strongly net additive when it comes to jobs in any of the occupational categories. In fact, this economy might be becoming top- and administration-heavier, rather than more skills-intensive.

6/5/2012: Live Register for April 2012 - Sub-trends Part 1

In the previous post I looked at the headline Live Register stats for April. Here, let's take a look at the sub-trends.

The number of long term claimants on the Live Register in April 2012 was 184,053, up 14,633 y/y and down 412 m/m. This is not seasonally adjusted. Per CSO: "The number of male long term claimants increased by 7,744 (+6.2%) in the year to April 2012, while the comparable increase for females was 6,889 (+15.4%) giving an overall annual increase of 14,633 (+8.6%) in the number of long term claimants.

Numbers of those in casual and part-time employment declined 274 to 88,442 in April 2012. Year on year the number is up 2,848 (+3.33%), compared to y/y change to March 2012 of +2,561 (+2.97%) - marking a slight deterioration of the trend. Overall, as chart below shows, things are running with a slightly upward trend. Again, you can opt to interpret part-time and casual employment as a good thing, or as a bad thing - glass half-full or half-empty, but generally, in my view, absent robust new jobs creation, this speaks more of a hidden unemployment, rather than of nascent entrepreneurship or a pick-up in some hiring activity.

Last 3 months average is now running at 1.89% increase on previous 3 months, and 3.33% rise y/y.

Now, for Live Register breakdown by nationality:

In April 2012, 77,015 non-Irish nationals were on the Live Register, down 1,065 from march 2012 (-1.36%) and down 508 (-0.66%) y/y. In March 2012, y/y decline was 514 (-0.65%). Since series is not adjusted for seasonal variation, it is worth looking at 3mo averages. 3mo average through April 2012 was up 1.72% on 3mo average through January 2012, but down 0.61% on same period 2011. The trend for non-nationals is therefore practically flat.

There were 352,986 nationals on the Live Register in April 2012, representing a decline of 2,988 on March (-0.84%) and a drop of 9,062 y/y (-2.50%). This compares to a y/y decline of 6,625 (-1.83%) in March 2012. 3mo through April 2012 average was down 0.41% compared to 3mo through January 2012 and declined 1.85% y/y. So the series are showing stronger downward momentum, but still a flat, albeit volatile trend. Chart above clearly shows the seasonality pattern and the flat trend.

April 2012 non-Irish nationals accounted for 17.91% of the total number of persons on the Live Register - an increase from 17.64% a year ago, but down from 17.99% in March 2012.

Stay tuned for occupational analysis of the LR in a subsequent post.

5/5/2012: Live Register in April - trending flat at 'glass half-full'

It's been a while since I updated the Live Register figures, and given that some fresh data was released this week, I think it's time to revisit the trends.

First off, the LR-implied unemployment (or standardized unemployment rate) remained at 14.3% in April 2012, unchanged from March 2012 ad below 14.6% reading for the actual unemployment rate for Q4 2011 (based on QNHS).

So far, crisis-period average LR-implied unemployment rate is 13.8% - still below that for April 2012, although with STDEV of 1.3 we are getting closer and closer to the statistically average rate. Crisis-period average monthly movement in the LR-implied unemployment is 0.14 percentage points, so with zero movement in April 2012, things are better than average. April 2012 marks 6th consecutive month during which the implied unemployment did not rise, of which exactly 3 months have seen zero change in unemployment and 3 months say declines of 0.1 percentage point. So as can be seen pretty clearly, January-April 2012 trend is not exactly encouraging, but on the 'glass half-full' side, it is also not exactly severely disappointing either.

In terms of absolute numbers, seasonally adjusted LR rose by 100 entrants in April 2012 to the seasonally-adjusted 436,000, so year on year LR dropped 6,400 in April 2012 (-1.45%) against a y/y decline of 8,000 (-1.80%) in March 2012. 3-mo average for the period through April 2012 is 1.35% below same period in 2011. This marks a moderate, but positive trend for the series and is a good news.

Alas, as the above figure illustrates, the good news on LR are clearly offset / accounted for by aggressive reclassification of assistance recipients into training programmes. Before you start biting off my head, let me clarify - training and re-training is good, but until the person exits the programme and gains a job, in my opinion, it is dishonest to claim that this person is not unemployed. So, per chart above, if we add March 2012 (latest) data for state training programmes participation numbers, we get 517,440 persons on the live register and in state run training programmes in April (against 517,340 in March). That is a rise of 12,694 y/y (+2.51%).

Chart below shows the LR struggle to break out of the flat trend since Q4 2010 that continues to-date.

The following post will look into some sub-trends in the LR composition.

Live Register for March 2012 - additional trends

In the previous post on live Register headline figures, I suggested that March 2012 data paints a mixed picture of some changes that might be consistent with early improvements in the trends (although it is too early to tell) and the continuation of the overall high level of unemployment and Live Register supports demands.

In this post, let's take a look at couple sub-trends.

First, consider LR by age - all seasonally adjusted figures:

• At the end of Q1 2012 there were 360,400 individuals 25 years and older on the Live Register, down from 361,900 (-1,500 or -0.4%) mom and up marginally on 360,200 at the end of Q1 2011. This represents an improvement on February 2012 when yoy there were 3,300 more LR signees age 25+. Q1 2012 average is now 1.07% below Q4 2011 average, however, Q1 2012 average is 0.74% ahead of Q1 2011 average.
•  At the end of Q1 2012 there were 74,400 individuals age less than 25 on LR, representing a decline of 1,500 (-2.0%) on February 2012 and a drop of 8,400 on March 2011 (-10.1%). This too represents an acceleration in annual decline rate in march, compared to February when yoy decline was 8.4%. Quarter on quarter, average LR participation by under-25 year olds has fallen 4.6% and year on year it is down 9%. Much of this is, most  likely, accounted for by the younger workers' participation in various State training programmes and emigration.

Next trend to consider is for Casual and Part-time workers LR participation:

• In March 2012, there were 87,716 part-time and casual workers on LR, up 502 (+0.6%) mom and 2,561 (+3%) yoy. This is down from the February 2012 annual growth rate of 3.7%. Quarter on quarter, March 2012 numbers are up 2.1% and year on year average Q1 2012 LR participation by this group is up 3.7%.

Live Register breakdown by nationality:

• Number of non-Irish nationals on the Live Register fell 675 mom in March 2012 (-0.9%) and it is now down 514 (-0.7%) yoy. However, monthly results conceal the reality of return of the upward (albeit relatively weak) trend in LR participation by non-nationals since September 2011 local trough.
• Number of Irish nationals on the Live Register is down 4,693 in March 2012 (to 355,974) relative to February and it is down 6,625 year on year (-1.8%)

As the result of the above changes, relative share of non-Irish nationals on the LR has risen for the third moth in a row, reaching 18% in march 2012. This is the highest reading since April 2009.

5/4/2012: Live Register for March 2012 - headline figures

Live Register figures released yesterday provide the evidence for continued flat trend in unemployment with mild volatility to the downside. There are some mixed news coming out of data, worth highlighting - both positives and negatives.

On the neutral side: Live Register implied unemployment rate slipped to 14.3% in March from 14.4% in January and February. This marks a decline from the peak of 14.6% in November 2011. There has been little volatility in the series along the trend since the beginning of the crisis (in part due to subsequent revisions of LR to closer align with QNHS) and this means that 0.1 percentage point move mom is statistically significant. However, given future revision of the data, there is little economic significance to the change. Overall level of unemployment remains elevated. Adding to the Liver Register those who are excluded because they participate in State-sponsored training programmes (see more on this below) would have seen implied unemployment rate closer to 16.6%, instead of 14.3%.

Total number of Live Register signees, seasonally adjusted, stood at 434,800 in March 2012 against 437,800 in February 2012 and 443,100 in March 2011. As I noted before, seasonal adjustment is starting to look slightly off to me - perhaps due to changes in methodology and partially, most likely, due to change in the longer-term trend - the establishment of the relatively flat trend within a narrow band at around 430K-450K since H2 2010 that replaced robust upward trend late 2007 through H1 2009. Nonetheless, if we are to have some goods, here it is:

• Year on year March 2012 decline in LR is now at 8,300 or -1.87% and this is an improvement on February year on year decline of 3,700 or -0.84%
• Month on month March Live Register numbers declined 3,000 - the fastest pace of declines since 3,700 drop in December 2011.
• Q1 2012 average LR is 1.08% below that for Q1 2011.

The CSO also published numbers for February 2012 participation in the Government-run training programmes. Participants in these are not included in Live Register, despite the fact they clearly are in receipt of state benefits. Here, the story is not great - in terms of what I would call 'hidden' unemployment, or perhaps the things are wonderful, given at least some of those in training are getting marketable skills and might be able to transition into jobs. Let's be neutral. 

In February 2012 there were 71,393 individuals engaged in Live Register Activation Programmes of various types. This represents an increase on 62,346 in same programmes in February 2011. The CSO supplied data for similar participants from February 2008. Using rather crude means of taking average increases in 2008-2010 and reversing the data from 2008 back into 2006, chart above plots the 'estimated' (inverted commas are to highlight the fact that for 2006-2007 this data is just purely illustrative, although from 2008 it is reflective of CSO actual figures) Live Register inclusive of those in Activation Programmes.

Here's the unpleasant bit:

• While seasonally adjusted Live Register fell 8,300 in a year through March 2012, the Live Register with Activation Programme Participants rose over the same period of time by 747. In other words, more people went off the Live Register into Activation Programmes (+9,047) than went off the Live Register (-8,300) in the twelve months to March 2012.
• The above dynamic, however, is an improvement on February 2012 when Live Register declined 3,700 year on year, while Live Register with Activation Programme Participants rose 5,347.
• Same is evident in rates of change. Q1 2012 Live Register fell 1.08% yoy, while Live Register with Activation Programme Participants rose 0.85% yoy.
• Overall, Live Register with Activation Programmes Participants stood at 506,193 in March 2012 against Live Register of 434,800.

On a positive note, monthly decline in the Live Register in march was 6th largest since the beginning of the crisis:

So, as I usually say, some things to cheer about, but let's keep it real - unemployment problem is not going away. One has to keep in mind that LR benefits do run out and people drop off the LR. In addition, rampant emigration is clearly playing a factor here. Unfortunately, CSO does not provide reliable and timely data on jobs creation and destruction to make any determination as to whether the small changes in the Live Register are signifying improved labour markets trends or not.

Next post - some details on nationalities on the LR, part-time employment and other sub-trends.