Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of LaborStatistics reported today. Government employment fell, as 114,000 temporaryworkers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000)
Let's start with the household survey.
The civilian, non-institutional population increased by 209,000. This is the denominator of several important macro statistics.
The civilian labor force increased 550,0000, for an increase in the labor force participation rate of .1%, increasing from 64.6% to 64.7%.
The number of unemployed increased 261,000, leading to an increase in the unemployment rate of .1%, increasing the level from 9.5% to 9.6%.
The number of employed increased by 290,000, for an increase of the employment to population ration of .1% or a rise from 58.4% to 58.5%.
The increase in the labor force tells us the more people moved back into the labor force. There are far too many reasons for this to ascribe a good or bad label to it.
It is important to remember that with the workforce getting older, we will start to see a decrease in the employment to population ratio and the labor force participation rate.
Let's move onto the establishment survey.
Total private hiring increased 61,000, 107,000 and 67,000 over the last three months. This is not an inspiring series of numbers and indicates that employers are extremely cautious about something.
Goods producing job gains stood at 0 as increases in mining and construction were offset by decreases in manufacturing. The decreases in manufacturing are consistent with the lower numbers we have been seeing in various regional manufacturing surveys over the last few months.
The service sector was responsible for all of the gains in the work force, accounting for 67,000 jobs. The bulk of these jobs came in the professional service category (+20,000) and education and health care services (+45,000). This number has printed at 60,000 and 70,000 for the preceding two months -- again, a very uninspiring series of numbers.
Government employees are responsible for the bulk of all the job losses for the last three months, as this category of employment has decreased by 236,000, 161,000 and 121,000 for the last three months, respectively.
On a scale of 1-10, I'd give this about 3.5. The private sector is hiring, but just barely. Manufacturing -- which led us out of the recovery -- is slowing and the service sector is having difficulty picking up the slack.
6 comments:
As a point of perspective....last months stated private payrolls was
107,737,000...with revision and
August increase...this number is now to 107,870,000.....up 143,000
from last month's stated number...
also we had a nice increase in aggregate weekly payrolls which
feeds into personal income numbers
Yes, its only 67k but this number should be a big relief to the markets. I'd give it a 7 out of 10 for importance. Since April the economic data has weakened considerably. The weakness seemed to be further weakening business/investor and consumer confidence. The risks of this triggering a double dip was increasing. This weeks ISM and payrolls threatened to both contract. But after a couple of months of negative surprises this weeks data turned the tide and surprised positively and is no longer deteriorating.
I'd argue that the main reason behind the economic weakness since April was the stimulus roll off (tax credit, state support over, and the others are declining). The important investment takeaway is that if the economic data (and obviously we need more evidence before we can really conclude this) is stabilizing then the economy may have survived the first round of fiscal roll off and survived a legitimate double dip test. Which were two of the biggest overhangs for the market. Too early to make this conclusion but the case looks possible now.
Are we finally done with census layoffs? Anyone keeping track of that, who knows whether all the layoffs have been completed? Given a lot of the horrible data(particularly jobless claims hitting 500k) and double dip talk in August, this doesnt strike me as a bad report at all. It seemed like the latter part of the month saw some better data, including better than expected drops in jobless claims, so maybe that will be reflected in the September report. Assuming that trend continues, of course.
Anon at 10:32:
Yes, as of the week that August's payroll data was collected, only 80,000 census workers remained. It will continue to have an effect, but only a small one, on payrolls for the next couple of months.
the Household survey showed 200+k of job gains for August. But the results of July were -159, June -301k, and May -35, so August only made up a little of the lost ground. What's bad news, however, is it appears that most of the net job growth has been in health care, of which roughly half of the spending in that category is from government (all deficit spending).
The Establishment report added 115k jobs from the birth/death adjustment before seasonal adjustments. With seasonal adjustments that number should have added about 80k jobs to the total. As we know, there is no evidence whatsoever that these jobs exist. The ADP report which does a large percentage of the payrolls for small business reported outright declines in the small business sector and other data released today showed self-employment was down to its lowest level in eight years. All in all it still appears that the wealth creating sector of the US economy is dying and the economy is being held up temporarily by federal govt transfers, deficit spending, and money printing.
1.) What's bad news, however, is it appears that most of the net job growth has been in health care, of which roughly half of the spending in that category is from government (all deficit spending).
First, with an aging population, a continual increase in medical professionals is to be expected. This is hardly news.
Secondly, your statements on health care area (again) unsubstantiated and wrong. According to the CBO's historical budget data, total medicaid spending accounts for 3.2% of US GDP and medicare accounts for 1.4%.
As I have previously demonstrated, the health care portion of PCEs is only 16%, meaning "consumer spending on health care is all that is driving the economy" is wrong.
2.) The Establishment report added 115k jobs from the birth/death adjustment before seasonal adjustments. With seasonal adjustments that number should have added about 80k jobs to the total. As we know, there is no evidence whatsoever that these jobs exist.
Please provide substantiation for this comment. One of the most pernicious internet conspiracy theories is the birth/death model is wrong. Yet, there is no proof of this statement; it mere conjecture. The BLS is staffed with statisticians; you are a ere anonymous poster with no credentials.
As I have repeatedly asked you to do, please provide a link to a paper by someone with a Ph.D in statistics or economics to prove this claim. As it stands, you are continuing to parrot the rantings of Mish, who's prior job as a professional photographer did not give him the intellectual skills to successfully refute anything except what lens speed to use.
2.) The ADP report which does a large percentage of the payrolls for small business reported outright declines in the small business sector and other data released today showed self-employment was down to its lowest level in eight years.
The ADP report shows decreases of 21,000 in goods producing small business and 15,000 of increases in small service business. In other words, small business saw a total decline of 6,000.
3.) "other data released today showed self-employment was down to its lowest level in eight years."
Please provide a link for this statement. As it stands, it is pure conjecture.
4.) "All in all it still appears that the wealth creating sector of the US economy is dying and the economy is being held up temporarily by federal govt transfers, deficit spending, and money printing."
According to the CBO and BEA, the highest percentage government spending has been of GDP over the last 40 years is around 23% which occurred over the last few years. That means that the lowest percentage the private sector has accounted for is 77% of GDP -- hardly a takeover.
You continue to work on the assumption that mere statements in cyberspace make a statement true. You also assume that the more you make the same dis-proven statement, the truer is becomes. This may work on Mish's site, but not here. Any statement you make must be substantiated.
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