may 2015 jobs report observations (grant toch)
TRANSCRIPT
May 2015 Jobs Report Observations
As has become customary, my jobs report comments stay away from the headline data and talk only to those data points that I find interesting. Comments involve three broad topics: (i) the number of jobs; (ii) the quality of the jobs; and (iii) wages.
1. Number of Jobs
The May 2015 headline number was better than expected and the revisions to April 2015 were higher. That said, as you can see below, April 2015 PRIVATE payroll revisions were -8k:
April Original Aprl - Revised Difference Mining and Lodging (15) (15) 0
Construction 45 35 (10)
Manufacturing 1 1 0
Wholesale Trade (5) (2) 2
Retail 12 13 1
Transportation and Warehouse 15 11 (4)
Information - Technology 3 8 5
Financial Services 9 8 (1)
Professional and Business Services, Ex-Temp 46 50 4
Temporary 16 16 0
Education and Health Services 61 64 3
Leisure and Hospitality 17 10 (7)
Other 7 7 (1)
Total 213 206 (8)
April 2015 Private Sector Job Revisions
As you can see below, job growth was fueled by a surge in education and health services jobs followed by leisure and hospitality, professional services excluding temporary services and retail. Mining and logging saw the largest decline while manufacturing job growth is slowing:
May June July August September October November December January February March April May TotalMining and Lodging 2 5 9 2 6 2 1 1 (7) (14) (12) (15) (18) (38)
% of total -1.2%
Construction 9 8 30 17 18 16 30 44 41 31 (9) 35 17 287% of total 9.0%
Manufacturing 15 21 24 3 20 24 45 19 17 3 0 1 7 199% of total 6.2%
Wholesale Trade 6 13 3 5 3 8 8 14 12 10 10 (2) 4 95% of total 3.0%
Retail 12 35 21 (4) 40 33 61 (0) 35 23 25 13 31 326% of total 10.2%
Transportation and Warehouse 17 13 21 11 7 13 26 38 (13) 9 8 11 13 175% of total 5.5%
Information - Technology (6) 11 10 14 3 (6) 7 6 6 7 0 8 (3) 57% of total 1.8%
Financial Services 8 19 15 12 14 4 28 7 19 9 7 8 13 163% of total 5.1%
Professional and Business Services, Ex-Temp 43 55 34 28 43 32 65 51 28 53 22 50 43 547% of total . 17.2%
Temporary 15 15 16 21 23 19 31 21 (8) (4) 13 16 20 197% of total 6.2%
Education and Health Services 58 48 37 50 35 44 51 54 42 61 35 64 74 653% of total 20.5%
Leisure and Hospitality 45 21 10 26 47 60 42 56 24 61 (6) 10 57 453% of total 14.2%
Other 4 (5) 3 11 0 5 19 8 5 11 2 7 3 73% of total 2.3%
Total 227 260 233 197 259 254 414 319 202 261 95 206 262 3,187
Average 245
Private Job Detail (May 2014-May 2015), Revised
We make a few comments about a few of the highlighted sectors below:
a. Education and Health: ambulatory health care services and hospital employees are leading the surgeb. Leisure and Hospitality: performing arts, spectator sports, amusement parks, gambling, accommodation,
and restaurants are seeing the growthc. Mining and Logging: No one is surprised these jobs are declining but the decline has almost nothing to
do with oil and gas extraction and is being felt only in support activities for mining. Focusing on the oil and gas extraction job sub-sector, we can see job loss has been minimal here:
100
120
140
160
180
200
220
240
260
280
2/1/
1972
10/1
/197
3
6/1/
1975
2/1/
1977
10/1
/197
8
6/1/
1980
2/1/
1982
10/1
/198
3
6/1/
1985
2/1/
1987
10/1
/198
8
6/1/
1990
2/1/
1992
10/1
/199
3
6/1/
1995
2/1/
1997
10/1
/199
8
6/1/
2000
2/1/
2002
10/1
/200
3
6/1/
2005
2/1/
2007
10/1
/200
8
6/1/
2010
2/1/
2012
10/1
/201
3
Oil and Gas Extraction Jobs, Level Data
Oil and Gas Extraction Jobs, Level Data
This contrasts with the decline in the rig count:
100
600
1,100
1,600
2,100
2,600
1/1/
1991
1/1/
1992
1/1/
1993
1/1/
1994
1/1/
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1/1/
1996
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2009
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2010
1/1/
2011
1/1/
2012
1/1/
2013
1/1/
2014
1/1/
2015
Baker Hughes Rig Count
Baker Hughes Rig Count
As a result, oil and gas extraction jobs per rig is now approaching all time highs:
50
100
150
200
250
300
350
1/1/
1991
1/1/
1992
1/1/
1993
1/1/
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1/1/
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2003
1/1/
2004
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2005
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2007
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2008
1/1/
2009
1/1/
2010
1/1/
2011
1/1/
2012
1/1/
2013
1/1/
2014
1/1/
2015
Oil and Gas Employee/Rig
Oil and Gas Employee/Rig
d. Manufacturing: Manufacturing job creation is slowing:
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
1/1/
1940
5/1/
1942
9/1/
1944
1/1/
1947
5/1/
1949
9/1/
1951
1/1/
1954
5/1/
1956
9/1/
1958
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1961
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1963
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1965
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1968
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1970
9/1/
1972
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1975
5/1/
1977
9/1/
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1/1/
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1984
9/1/
1986
1/1/
1989
5/1/
1991
9/1/
1993
1/1/
1996
5/1/
1998
9/1/
2000
1/1/
2003
5/1/
2005
9/1/
2007
1/1/
2010
5/1/
2012
9/1/
2014
Manufacturing Jobs, Y/Y
Manufacturing Jobs, Y/Y
The labor participation rate is trying to stabilize:
58.0%
60.0%
62.0%
64.0%
66.0%
68.0%
2/1/
1948
5/1/
1950
8/1/
1952
11/1
/195
4
2/1/
1957
5/1/
1959
8/1/
1961
11/1
/196
3
2/1/
1966
5/1/
1968
8/1/
1970
11/1
/197
2
2/1/
1975
5/1/
1977
8/1/
1979
11/1
/198
1
2/1/
1984
5/1/
1986
8/1/
1988
11/1
/199
0
2/1/
1993
5/1/
1995
8/1/
1997
11/1
/199
9
2/1/
2002
5/1/
2004
8/1/
2006
11/1
/200
8
2/1/
2011
5/1/
2013
Civilian Labor Force/Civilian Non-Institutional Population
Civilian Labor Force/Civilian Non-Institutional Population
But labor force gains are dramatically slower than job gains, which is surprising:
98
100
102
104
106
108
110
6/1/
2009
9/1/
2009
12/1
/200
9
3/1/
2010
6/1/
2010
9/1/
2010
12/1
/201
0
3/1/
2011
6/1/
2011
9/1/
2011
12/1
/201
1
3/1/
2012
6/1/
2012
9/1/
2012
12/1
/201
2
3/1/
2013
6/1/
2013
9/1/
2013
12/1
/201
3
3/1/
2014
6/1/
2014
9/1/
2014
12/1
/201
4
3/1/
2015
Civilian Labor Force versus Total People Employed (Household Survey) versus Non-Farm Payrolls
(Establishment Survey) - June 2009 to Present Where June 2009 = 100
Civilian Labor Force Total People Employed (Household Survey)
Non-Farm Payrolls (Establishment Survey)
Perhaps no one wants a job:
29.0%
30.0%
31.0%
32.0%
33.0%
34.0%
35.0%
36.0%1/
1/19
94
10/1
/199
4
7/1/
1995
4/1/
1996
1/1/
1997
10/1
/199
7
7/1/
1998
4/1/
1999
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2000
10/1
/200
0
7/1/
2001
4/1/
2002
1/1/
2003
10/1
/200
3
7/1/
2004
4/1/
2005
1/1/
2006
10/1
/200
6
7/1/
2007
4/1/
2008
1/1/
2009
10/1
/200
9
7/1/
2010
4/1/
2011
1/1/
2012
10/1
/201
2
7/1/
2013
4/1/
2014
1/1/
2015
Not In Labor Force AND Do NOT Want a Job/Civilian Non-Institutional Population
Not In Labor Force AND Do NOT Want a Job
2. Quality of Jobs
At a high level, job growth is not translating into GDP growth, at least not at levels we are accustomed to seeing:
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
3/1/
1948
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1950
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1952
12/1
/195
3
11/1
/195
5
10/1
/195
7
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1961
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1969
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1971
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1/1/
1975
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/197
6
11/1
/197
8
10/1
/198
0
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1982
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1984
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1986
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1990
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1998
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/199
9
11/1
/200
1
10/1
/200
3
9/1/
2005
8/1/
2007
7/1/
2009
6/1/
2011
5/1/
2013
GDP/Non-Farm Payroll Employee, Y/Y
GDP/Non-Farm Payroll Employee, Y/Y
Full-time jobs did increase but remain, from a level perspective, below pre-recession levels:
108000
110000
112000
114000
116000
118000
120000
122000
124000
1/1/
1999
8/1/
1999
3/1/
2000
10/1
/200
0
5/1/
2001
12/1
/200
1
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/200
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2005
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2006
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2006
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2007
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/200
7
5/1/
2008
12/1
/200
8
7/1/
2009
2/1/
2010
9/1/
2010
4/1/
2011
11/1
/201
1
6/1/
2012
1/1/
2013
8/1/
2013
3/1/
2014
10/1
/201
4
5/1/
2015
Full time Non-Farm Payrolls (1999-Present)
Full time Non-Farm Payrolls (1999-Present)
Relative to the size of the labor force, full time jobs remain well below pre-recession levels:
80%
81%
81%
82%
82%
83%
83%
84%
1/1/
2000
9/1/
2000
5/1/
2001
1/1/
2002
9/1/
2002
5/1/
2003
1/1/
2004
9/1/
2004
5/1/
2005
1/1/
2006
9/1/
2006
5/1/
2007
1/1/
2008
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2008
5/1/
2009
1/1/
2010
9/1/
2010
5/1/
2011
1/1/
2012
9/1/
2012
5/1/
2013
1/1/
2014
9/1/
2014
5/1/
2015
Full Time Employees/Total Labor Force (2000-Present)
Full Time Employees/Total Labor Force (2000-Present)
Part-time jobs did decline BUT ONLY BECAUSE OF DECINES IN THOSE WORKING PART-TIME FOR NON-ECONOMIC REASONS (blue line). THOSE WORKING PART-TIME BECAUSE OF SLACK ECONOMIC CONDITIONS (red line) AND BECAUSE THE PERSON COULD NOT FIND FULL TIME WORK (green line) ACTUALLY INCREASED:
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
140.0
6/1/
2009
9/1/
2009
12/1
/200
9
3/1/
2010
6/1/
2010
9/1/
2010
12/1
/201
0
3/1/
2011
6/1/
2011
9/1/
2011
12/1
/201
1
3/1/
2012
6/1/
2012
9/1/
2012
12/1
/201
2
3/1/
2013
6/1/
2013
9/1/
2013
12/1
/201
3
3/1/
2014
6/1/
2014
9/1/
2014
12/1
/201
4
3/1/
2015
Part Time Workers By Reason (June 2009 = 100 For Each Category)
Non-Economic Reasons Slack Business Conditions Can Only Find Part Time Work
If those working part time because they cannot find full time were back at pre-recession levels, the full time work force would be almost 1.2m workers greater than current levels.
3. Wages
Average hourly wage growth has broken out of its multi-year range:
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Average Hourly Wages Nominal, Y/Y
Ave ra ge Ho u rl y W ag es, Y /Y
But 80% of the workforce is not sharing in this trend:
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
1965
-01-
01
1967
-01-
01
1969
-01-
01
1971
-01-
01
1973
-01-
01
1975
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01
1977
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01
1979
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01
1981
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01
1983
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01
1985
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01
1987
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1989
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1991
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01
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01
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01
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01
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-01-
01
2007
-01-
01
2009
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01
2011
-01-
01
2013
-01-
01
2015
-01-
01
Average Hourly Earnings of Production and Nonsupervisory Employees, Private Sector,
Y/Y
Average Hourly Earnings of Production and Nonsupervisory Employees, Private Sector,Y/Y
Looking below, we see that two of the three fastest growing jobs sectors (green highlights in left column) have wages growing faster than the y/y average wage growth rate. That said, two of these three sectors have overall average hourly wages below the average hourly wage (on an unweighted basis):
Type % of Overall Growth Average Wage Growth, y/y Average Hourly Wage Growth, 3 Month Annual % of Labor Force Average Hourly Wage
Leisure and Hospitality 14.2% 3.6% 3.6% 10.2% $14.32Financial Services 5.1% 3.0% 3.0% 4.1% $31.52Construction 9.0% 2.7% 2.7% 4.3% $27.34Professional and Business Services, Ex-Temp 17.2% 2.6% 2.6% 14.8% $29.98Retail 10.2% 2.5% 2.5% 10.5% $17.41Wholesale Trade 3.0% 2.4% 2.4% 4.0% $28.73Information - Technology 1.8% 2.2% 2.2% 1.9% $34.63Other 2.3% 2.2% 2.2% 3.8% $22.36Education and Health Services 20.5% 2.1% 2.1% 14.8% $25.19Manufacturing 6.2% 1.8% 1.8% 8.3% $25.16Mining and Lodging -1.2% 0.6% 0.6% 0.5% $31.02Temporary 6.2% 2.0%Transportation and Warehouse 5.5% 3.2%
Average 7.7% 2.4% 2.9% $26.15
Private Sector Job Growth, May 2014 - May 2015
Overall, this is the chart that must be reconciled. Either spending must accelerate or revisions to the jobs data might just be meaningfully negative:
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Personal Consumption Expenditures, Nominal Deflated by Non-Farm Payrolls
Personal Consumption Expenditures, Nominal Deflated by Non-Farm Payrolls Average
For those interested, below are the charts of the average hourly wages by job sector. Six sectors are growing above average and five sectors are growing below average. Wholesale trade saw the marked acceleration:
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%3/
1/20
07
7/1/
2007
11/1
/200
7
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2008
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8
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0
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/201
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2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Manufacturing - Average Hourly Wage Growth, Y/Y
Manufacturing - Average Hourly Wage Growth, Y/Y
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
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2009
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9
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2010
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/201
0
3/1/
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2011
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/201
1
3/1/
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/201
2
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2013
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2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Construction - Average Hourly Wage Growth, Y/Y
Construction - Average Hourly Wage Growth, Y/Y
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%3/
1/20
07
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
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9
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2010
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2010
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/201
0
3/1/
2011
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2011
11/1
/201
1
3/1/
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/201
2
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2013
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2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Mining and Lodging - Average Hourly Wage Growth
Mining and Lodging - Average Hourly Wage Growth
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
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/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
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2012
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/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Wholesale Trade - Average Hourly Wages, Y/Y
Wholesale Trade - Average Hourly Wages, Y/Y
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
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/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
7/1/
2012
11/1
/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Retail - Average Hourly Wages, Y/Y
Retail - Average Hourly Wages, Y/Y
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
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/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
7/1/
2012
11/1
/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Utilities - Average Hourly Wages, Y/Y
Utilities - Average Hourly Wages, Y/Y
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
11/1
/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
7/1/
2012
11/1
/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Information - Average Hourly Wages, Y/Y
Information - Average Hourly Wages, Y/Y
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
11/1
/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
7/1/
2012
11/1
/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Education and Health Services - Average Hourly Wages, Y/Y
Education and Health Services - Average Hourly Wages, Y/Y
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%3/
1/20
07
8/1/
2007
1/1/
2008
6/1/
2008
11/1
/200
8
4/1/
2009
9/1/
2009
2/1/
2010
7/1/
2010
12/1
/201
0
5/1/
2011
10/1
/201
1
3/1/
2012
8/1/
2012
1/1/
2013
6/1/
2013
11/1
/201
3
4/1/
2014
9/1/
2014
2/1/
2015
Leisure and Hospitality - Average Hourly Wages, Y/Y
Leisure and Hospitality - Average Hourly Wages, Y/Y
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
3/1/
2007
8/1/
2007
1/1/
2008
6/1/
2008
11/1
/200
8
4/1/
2009
9/1/
2009
2/1/
2010
7/1/
2010
12/1
/201
0
5/1/
2011
10/1
/201
1
3/1/
2012
8/1/
2012
1/1/
2013
6/1/
2013
11/1
/201
3
4/1/
2014
9/1/
2014
2/1/
2015
Financial Activities - Average Hourly Wages, Y/Y
Financial Activities - Average Hourly Wages, Y/Y
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%3/
1/20
07
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
11/1
/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
7/1/
2012
11/1
/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Professional and Business Services -Average Hourly Wages, Y/Y
Professional and Business Services - Average Hourly Wages, Y/Y
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
3/1/
2007
7/1/
2007
11/1
/200
7
3/1/
2008
7/1/
2008
11/1
/200
8
3/1/
2009
7/1/
2009
11/1
/200
9
3/1/
2010
7/1/
2010
11/1
/201
0
3/1/
2011
7/1/
2011
11/1
/201
1
3/1/
2012
7/1/
2012
11/1
/201
2
3/1/
2013
7/1/
2013
11/1
/201
3
3/1/
2014
7/1/
2014
11/1
/201
4
3/1/
2015
Other Services - Average Hourly Wages - Y/Y
Other Services - Average Hourly Wages - Y/Y