The Employment Situation by the Bureau of Labor Statistics (BLS)
By Edward Harrison
The Employment Situation Summary for July was released today by the Bureau of Labor Statistics (BLS), showing a 9.4% unemployment rate and 247,000 jobs lost in July. These numbers were better than anticipated, with the unemployment rate actually falling from 9.5%.
In its release, the BLS emphasized the fact that employment figures are improving. While the language is neutral, it should be clear to anyone that the BLS is trying to intimate that the economy is improving:
Nonfarm payroll employment continued to decline in July (-247,000), and the unemployment rate was little changed at 9.4 percent, the U.S. Bureau of Labor Statistics reported today. The average monthly job loss for May through July (-331,000) was about half the average decline for November through April (-645,000). In July, job losses continued in many of the major industry sectors.
Manufacturing lost 52,000 jobs, retail 44,000 and business services 38,000. Transportation lost 22,000 jobs, information 16,000, while financial services shed 13,000. On the other hand, health care added 20,000 jobs, while the workweek increased to 33.1 hours from an all-time low of 33.0 hours in June. Workers earned 3 cents more per hour on average as well.most industries are still losing workers, but at a slower pace. Employment is still a weak link in the recovery chain.
Overall, this is a decent report given expectations. The glass half-full view would be that it shows we are well on our way to recovery. The glass half-empty view would be it shows employment is still a problem and could prevent a sustainable recovery.
As I have not had time to parse the data, I may have more to say later, time permitting. I know that Trim Tabs had expected some heavy revisions but the headline number was much better than they had anticipated and more in line with Goldman’s revised more bullish outlook.
As New Labor Department numbers show that employers cut just 247,000 jobs in July, “the fewest in a year, and the unemployment rate dipped to 9.4 percent. It was a better than expected showing that offered a strong signal that the recession is finally ending.”
A report card on the stimulus plan offered by economists suggests “increased government spending has helped the economy begin to bottom out faster than it would have otherwise.” “Government — federal, state and local — is helping take the economy from recession to recovery, said Allen L. Sinai, chief economist at Decision Economics. “I think it’s the primary contributor.”
Senate Finance Committee Chairman Max Baucus (D-MT) said he discussed with President Obama yesterday the possibility of “going it alone” on health care reform “with a Democrats-only bill if the current bipartisan process doesn’t work.” “If Republicans aren’t there, it could get to the point where sometime after the recess … Democrats may have to go in a different direction,” Baucus said.
Senior White House officials have counseled Democrats “on coping with disruptions at public events on health care this summer” and “promised the party and allies would respond with twice the force if any individual lawmaker is criticized in television advertising.” The officials noted that polls show the American public supporting many of their positions on reforming the health care system.The average monthly job loss for May through July (-331,000) was about half the average decline for November through April (-645,000). In July, job losses continued in many of the major industry sectors.
Household Survey Data In July, the number of unemployed persons was 14.5 million. The unemployment rate was 9.4 percent, little changed for the second consecutive month. (See table A-1.) Among the major worker groups, unemployment rates for adult men (9.8 percent), adult women (7.5 percent), teenagers (23.8 percent), whites (8.6 percent), blacks (14.5 percent), and Hispanics (12.3 percent) were little changed in July. The unemployment rate for Asians was 8.3 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.) The number of long-term unemployed (those jobless for 27 weeks or more) rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemploy- ed persons were jobless for 27 weeks or more. (See table A-9.)
The civilian labor force participation rate declined by 0.2 percentage point in July to 65.5 percent. The employment-population ratio, at 59.4 percent, was little changed over the month but has declined by 3.3 per- centage points since the recession began in December 2007. (See table A-1.) The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in July at 8.8 million. The number of such workers rose sharply in the fall and winter but has been little changed for 4 consecutive months. (See table A-5.) About 2.3 million persons were marginally attached to the labor force in July, 709,000 more than a year earlier. (The data are not seasonally adjusted.) These individuals, who were not in the labor force, wanted and were available for work and had looked for a job sometime in the prior 12 months.
They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-13.) Among the marginally attached, there were 796,000 discouraged workers in July, up by 335,000 over the past 12 months. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.5 million persons marginally attached to the labor force in July had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. Establishment Survey Data Total nonfarm payroll employment declined by 247,000 in July.
From May to July, job losses averaged 331,000 per month, compared with losses averaging 645,000 per month from November to April. Since December 2007, payroll employment has fallen by 6.7 million. (See table B-1.) Employment in construction declined by 76,000 in July, about in line with the average for the past 3 months (-73,000). Employment had de- creased by 117,000 a month on average from November to April.
Manufacturing employment fell by 52,000 in July and has declined by 2.0 million since the recession began. In motor vehicles and parts, fewer workers than usual were laid off in July for seasonal retool- ing.
As a result, the estimate of employment for the industry rose by 28,000 after seasonal adjustment.
In large part, July’s seasonally- adjusted increase reflects the fact that previous job cuts had been so extensive that there were fewer workers to lay off during the sea- sonal shutdown. Elsewhere in manufacturing, several industries con- tinued to lose jobs in July, including machinery (-15,000) and fabri- cated metal products (-14,000).
In July, retail trade employment declined by 44,000. Job losses in the industry had averaged 27,000 per month over the prior 3 months.
Em- ployment in wholesale trade fell by 19,000 in July, with the majority of the decline occurring among durable goods wholesalers.
Employment in professional and business services continued to trend down in July (-38,000); the industry has shed 1.5 million jobs since the start of the recession.
Within professional and business services, employment in the temporary help industry edged down in July.
While temporary help has lost 844,000 jobs since the recession began, the declines have lessened substantially over the past 3 months.
Transportation and warehousing lost 22,000 jobs in July. Since May, the average monthly job loss was half the average monthly decline for November through April (-17,000 versus -34,000).
Financial activities employment continued to trend down in July (-13,000).
The average monthly decline for this industry was 23,000 over the past 3 months compared with 46,000 per month from November through April. Since the start of the recession, the financial acti- vities industry has lost 501,000 jobs.
Employment in information de- clined by 16,000 in July, including losses in publishing and telecom- munications.
Health care employment increased by 20,000 in July, about in line with the average monthly gain for the first half of this year but down from an average monthly increase of 30,000 during 2008. Employ- ment in lei-sure and hospitality has been little changed over the past 3 months. In July, the average workweek of production and nonsupervisory work- ers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours. The manufacturing workweek increased by 0.3 hour to 39.8 hours. Fac- tory overtime was unchanged at 2.9 hours.
In July, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls rose by 3 cents, or 0.2 percent, to $18.56. Over the past 12 months, average hourly earnings have increased by 2.5 percent, while average weekly earnings have risen by only 1.0 percent due to declines in the average workweek.