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VIDEOIn-Depth Look at Today's Jobs Data
By
Mike Mish Shedlock
Sep 03, 2010 1:10 pm
One of the most important things is recognizing that reducing government jobs is what will create real jobs.
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Excluding the Census effect, the government lost 7,000 jobs. Were the trend to continue, this would be a good thing because firing public union workers creates real jobs.
Unfortunately, politicians and Keynesian economists won't see it that way. Indeed, there's a $26 billion bill giving money to the states to keep bureaucrats employed. This is unfortunate because we need to shed government jobs.
Birth-Death Model
Hidden beneath the surface of the BLS Black Box, the Birth-Death Model added 115,000 jobs, a number likely to be revised lower in coming years. Please note that you can't directly subtract the number from the total because of the way the BLS computes its overall number.
Participation Rate Effects
The civilian labor force participation rate (64.7%) and the employment-population ratio (58.5%) were essentially unchanged from last month's report. However, these measures have declined by 0.5 percentage points and 0.3 points, respectively, since April.
The drop in the participation rate this year is the only reason the unemployment rate isn't over 10%. The drop in participation rates isn't that surprising because some of the long-term unemployed stopped looking for jobs or opted for retirement.
Nonetheless, I still don't think the top in the unemployment rate is in and expect it may rise substantially later this year as the recovery heads into a coma and states are forced to cut back workers unless Congress does substantially more to support states.
Employment and Recessions
Calculated Risk has a great chart showing the effects of Census hiring as well as the extremely weak hiring in this recovery.
The dotted lines tell the real story about how pathetic this jobs recovery has been. Bear in mind it's taken trillions of dollars in stimulus to produce this.
June, July Revisions
The change in total nonfarm payroll employment for June was revised to -175,000 from -221,000, and the change for July was revised to -54,000 from -131,000.
Those revisions look good but it's important to note where the revisions come from. The loss of government jobs in June was revised to -236,000 from -252,000 and in July to -161,000 from -202.
Major Discrepancies
The BLS jobs report for August doesn't match ADP payroll estimates. Moreover, neither the BLS jobs report nor the ADP jobs report is consistent with the hot ISM number reported Wednesday. Both the BLS (details below) and ADP have a decline in manufacturing employment while ISM had a rise.
Please see Rosenberg says "ISM Flunks Sniff Test;" Cashin calls ISM "an Outlier;" ADP, Other Data Does Not Confirm for more details that suggest the ISM number is nonsense.
Part-Time Employment
The number of involuntary part-time workers increased by 331,000 over the month to 8.9 million. In January, the number of employees working "part-time for economic reasons" was 8.6 million.
Now for this month's report ....
July 2010 Report
Please consider the Bureau of Labor Statistics' July 2010 Employment Report.
Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6%, the US Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial Census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).
Unemployment Rate -- Seasonally Adjusted
Nonfarm Payroll Employment -- Seasonally Adjusted
Since September 2009, temporary help services employment has risen by 362,000.
Establishment Data
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