weekend commentary - US gains 96,000 jobs but loses 581,000 from work force
from
(snip)"Household Survey: Number of Employed Declines by 119,000 as Those Not in Labor Force Rises by Spectacular 581,000; Yes, Virginia, It's a Recession
last month the the household survey had a decline of 195,000 jobs and this month the decline is 119,000. Thus, in the last two months, there are 314,000 fewer employed.
At turns, the household survey leads. I strongly suggest the economy has turned.
Jobs Report at a Glance
Here is an overview of today's release.
•US Payrolls +96,000 - Establishment Survey
•June revised lower from +64,000 to +45,000.
•July revised lower from +163,000 to +145,000.
•Three-month average is a weak +95,000 - Establishment Survey
•US Employment -119,000 - Household Survey
•US Unemployment Rate -.02 at 8.1% - Household Survey
•The Civilian Labor Force fell by 368,000. Otherwise the unemployment rate would have risen.
•Average workweek for all employees on private nonfarm payrolls steady at 34.4 hours
•The average workweek for production and nonsupervisory employees on private nonfarm payrolls steady at 33.7 hours.
•Average hourly earnings for all employees in the private nonfarm workers sector fell by 1 cent.
Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.
Quick Notes About the Unemployment Rate
•US Unemployment Rate -.2 to 8.1%
•This month the number of people employed fell by 119,000.
•In the last two months, the number of people employed fell by 314,000!
• In the last year, the civilian population rose by 3,695,000. Yet the labor force only rose by 971,000.
•This month the Civilian Labor Force fell by 368,000.
•Last month, those "not" in the labor force increased by 348,000 to 88,340,000, another record high.
•This month we set another record high with a whopping 581,000 dropping out of the labor force. If you are not in the labor force, you are not counted as unemployed.
•In the last year, those "not" in the labor force rose by 2,723,000
•Over the course of the last year, the number of people employed rose by 2,347,000.
•Participation Rate fell .02 to 63.5%;
•There are 8,031,000 workers who are working part-time but want full-time work, a decrease of 215,00. This one the only bright spot in the report.
•Long-Term unemployment (27 weeks and over) was 5.033 million a decline of 152,000 (likely an artifact of the decline in the labor force).
•Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.
Over the past several years people have dropped out of the labor force at an astounding, almost unbelievable rate, holding the unemployment rate artificially low. Some of this was due to major revisions last month on account of the 2010 census finally factored in. However, most of it is simply economic weakness"(snip)
(snip)"
Since the employment low in February 2010, nonfarm payrolls have expanded by about 4.4 million jobs. Of the 8.8 million jobs lost between January 2008 and February 2010, approximately 50% percent have been recovered (not accounting for normal demographics growth)
Statistically, 125,000+- jobs a month is enough to keep the unemployment rate flat. For a discussion, please see Question on Jobs: How Many Does It Take to Keep Up With Demographics?
Since the beginning of the year, job growth has averaged 139,000 per month, compared with an average monthly gain of 153,000 in 2011.
The average employment gain over the last 30 is barely enough (statistically speaking) to make a dent in the unemployment rate.
Yet, the civilian unemployment rate has fallen from 9.8% to 8.1%."(snip)