Record Rates Don’t Drop After Today’s Weakest Jobs Report of 2010 (CHARTS)

Rates have dropped to new record lows twice in the last month, with the most recent record rate lows coming between June 23 and July 1. And despite the June jobs report today showing the biggest monthly job losses in 2010, rates couldn’t break any lower. The Bureau of Labor Statistics non-farm payroll report showed that the economy lost 125,000 jobs in June which includes a 225,000 reduction in the Census workforce (which count as full-time jobs on BLS rolls despite their temporary status). But 83,000 new private sector jobs were created, and this somewhat positive figure is a big reason rates didn’t drop further today—the other big reason is that mortgage bonds are trading at overpriced levels and it seems improbably they’d rally any higher (which would bring rates lower). The net job loss toll since the recession began in December 2007 at 7.48 million, but 2010 shows a net job gain of 882,000. BLS also reported that 14.6 million people are unemployed. This is a 9.5% unemployment rate, up 4.6% since the recession began in December 2007. See charts and additional commentary on the U.S.’s 8.6m involuntary part-timer workers below.

Additionally there are now 8.6 million people who would like to work full time but are working part time because their hours have been cut or they can’t find full-time jobs. This forced-into-part-time-work category is up 3.7m million since January 2008, and while it has improved in the last two months, it’s a volatile number. It decreased 900k in January (at the time, it was the first decrease in nine months), then increased by 800k in the two months before April, was flat in April, and decreased by 525k in May and June. This is the fine print of the jobs report—the headline job loss and unemployment statistics show that these 8.6 million people are employed and therefore not in the job loss category, but because of their job status these 8.6 million workers aren’t likely to be consuming at normal levels. This poor statistic in the jobs report is mostly unreported and trading decisions don’t seem to be made on this figure. But until there’s movement here, a sustained recovery seems hard to achieve.
CHART 1: MONTHLY JOB GAIN/LOSS DECEMBER 2007 TO JUNE 2010

CHART 2: JUNE 2010 JOBS BY SECTOR

CHART 3: JOB LEVELS JANUARY 2000 TO JUNE 2010