Friday, September 2, 2011

August BLS employment report

The Bureau of Labor Statistic released the monthly employment report for the month of August. Highlights:

Nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent. (...) Health care continued to add jobs, and a decline in information employment reflected a strike. Government employment continued to trend down, despite the return of workers from a partial government shutdown in Minnesota.

The change in total nonfarm payroll employment for June was revised from +46,000 to +20,000, and the change for July was revised from +117,000 to +85,000.

Both the civilian labor force participation rate, at 64.0 percent, and the employment-population ratio, at 58.2 percent, were little changed.

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour over the month to 34.2 hours.

In August, average hourly earnings for all employees on private nonfarm payrolls decreased by 3 cents, or 0.1 percent, to $23.09. This decline followed an 11-cent gain in July.

There is nothing positive in this employment report. Granted, it could have been worse: the participation rate could have decreased, the change in payrolls could have been negative. Some will dismiss the news as temporary: a result of the extreme negative sentiment during the first half of August, and the Verizon strike. But the payrolls number for both June and July were revised down as well, and both are now well below 100k.


Private employers added 17k jobs, whereas the government cut 17k jobs. The ADP survey yesterday showed a 91k increase in private payrolls. Payrolls changes were minuscule across industries, so it is hard to highlight anything. The largest gain was for healthcare and social assistance (35.5k). Professional and business services added 28k, and information subtracted 48k, no doubt influenced by the strike of Verizon's employees.

Average hours and average hourly earnings were both down, which is not a good omen for future months. The declines were too small to be alarmed yet, however. And, as always, a month does not make a trend.

From the household survey, the number of people working part-time for economic reasons (i.e., they could not find a full-time job) increased 430k. The number of jobless who were unemployed because they re-entered the labor force increased 122k. I consider this a good thing: more people entering the workforce means confidence that they can find a job. But that was pretty much the only crumb of good news I could find in this report.

Overall, as I wrote before, a very negative employment report.

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