Crunching July's Numbers: Unemployment Up, But New Jobs Created
Before or after you read today's jobs report, you might want to read Beware the Jobs Report of July by Binyamin Appelbaum. And you might want to read this by me from last August on this date: Some advice on reading the numbers. A sample from the latter: "The problem with whatever numbers will be reported in the headlines—and that most expert analysts and pundits alike will respond to—is that they are not real." Instead, they are a product of seasonal adjustments and other formulas applied against raw numbers acquired by means of surveys.
The Bureau of Labor Statistics reported Friday morning that, seasonally adjusted, the economy created 172,000 new private jobs in July. Government jobs fell by 9,000, making the net gain 163,000. That was well over the consensus of experts surveyed ahead of time. The official unemployment rate climbed to 8.3 percent.
Revisions changed previously reported growth in payroll employment in May from 77,000 to 87,000 and in June from 80,000 to 64,000. Three years after the official end of the Great Recession, 12.8 million Americans are officially out of work.
An alternative measure of unemployment labeled U6, which counts part-time workers who want full-time jobs (but can't find any) and some but not all of the millions of people who have become too discouraged to look for work—rose from 14.9 percent to 15.0 percent.
The number of Americans unemployed for six months or more is 5.2 million, 40.7 percent of the total officially counted as out of work.
For the nine months just ended, the average monthly job growth has been 169,000. But for the three months just completed, the monthly average fell to 105,000.
The civilian labor force participation fell to 63.7 percent; the employment-population ratio fell to 58.4 percent.
The BLS jobs report is the product of a pair of surveys, one of business establishments and one called the Current Population Survey, which asks questions of 60,000 householders. The establishment survey determines how many new jobs were added, calculated on a seasonally adjusted basis. The CPS provides data that determine the official "headline" unemployment rate, also known as "U3." That's the number which is now 8.3 percent.
The CPS report for July showed 150,000 fewer workers in the civilian labor force.
When you add together the 12.8 million people who are out of work, the 8.2 million people who want full time jobs but are stuck working part time because their hours were cut or they could only find a part-time job to start and the 6.6 million not in the labor force but who say they want a job, the total unemployed and underemployed population is 27.6 million Americans.
Here's what the job growth numbers have looked like for July in the most recent 10 years:
July 2003: + 25,000
July 2004: + 46,000
July 2005: +374,000
July 2006: +209,000
July 2007: - 40,000
July 2008: -210,000
July 2009: -339,000
July 2010: - 58,000 (worsened by Census layoffs)
July 2011: + 96,000
July 2012: +163,000
Among other changes detailed in today's job report:
• Health care: +12,000
• Manufacturing: +25,000
• Professional and business services: +49,000
• Temporary Help Services: +14,000
• Leisure and Hospitality: +29,000
• Government: - 9,000
• The average workweek (for production and non-supervisory workers) held steady at 34.5 hours.
• Average manufacturing hours remained unchanged at 40.7 hours
• The average hourly earnings for all employees on private nonfarm payrolls rose by 2 cents to $23.52. Over the past year such earnings have risen 1.7 percent, compared with an inflation rate now also running at 1.7 percent.